Incentivized by the economic policies of the Abe administration, the weaker yen and a sharp increase in the number of inbound tourists, investment in the Japanese real estate market is on the rise. A marked increase in investment in the Japanese real estate market first became apparent in the months following the election of Abe Shinzo as prime minister in December 2012. The Bank of Japan’s large-scale monetary easing in April 2013 arrested the steep rise of the previous months, as did the hike in the consumption tax in April 2014, but the general rising trend has continued through further monetary easing in October 2014 and the ruling coalition’s victory in the Lower House election of December last year. According to one private company, the turnover value of office building transactions by listed corporations and the Tokyo Stock Exchange (TSE) listed J-REITs (Japan Real ... ... [Read more]

< Key Points > * Deflation and long-term stagnation continued in Japan for almost two decades. * QQE will reach its quantitative limit in the middle of 2017 at the earliest. * A structure based on negative interest rates that does not cause a flight to cash is proposed. The Bank of Japan (BOJ) decided to put off additional easing at a meeting held at the end of October 2015 for setting a monetary policy. In my opinion, whether or not the BOJ takes such a step depends on whether market participants’ inflation expectations fall sharply. The important thing here is the natural rate of interest. It is an equilibrium real interest rate that is neither stimulative nor tightening for the economy (in other words, neutral for the economy). According to analysis by the Financial Research Team of the Japan Center for Economic Research ... ... [Read more]

“Creating a society in which all women shine” is one of the defining policies of Abenomics. Thanks to the measures introduced under the policy since the Abe administration’s establishment in December 2012, some one million women have newly entered the labor market and the number of female corporate board members has increased by approximately 30%.   Women’s social advancement is one of the most important challenges facing Japan today. Traditionally Japanese society has held the view that mothers should stay at home and take care of the family’s children rather than continue or seek employment, and even today about 60% of women quit their jobs when they get married or give birth to their first child. Women tend only to return to the labor market once their children have grown up and left home, a tendency revealed in the downward portion of the so-called ... ... [Read more]

--- The Bank of Japan (BOJ), which had maintained that it would “do anything possible” to achieve the target year-on-year consumer price index increase rate of 2%, decided to adopt a negative interest rate policy.
Ikeo: As BOJ Governor Kuroda Haruhiko said, there are still things the BOJ can do in the area of monetary policies. But that does not mean there are “effective measures” remaining. When I say “effective measures,” I am referring to policy measures that produce results which surpass adverse reactions in their own way and change the economy for the better. Whether the negative interest rate policy falls under this category is open to question. I think the latest BOJ decision actually revealed the limits of monetary policies]]> ... [Read more]

--- The parties to the United Nations Framework Convention on Climate Change adopted a new international framework for measures against global warming called the Paris Agreement at their 21st meeting (COP21) held in Paris, France in December 2015. Why is global warming a problem in the first place?
ARIMA Jun: The greenhouse gas (GHG) emissions are continuously increasing, which is causing gradual increase of global average temperature. While there are still some skepticism about global warming, the majority of scientists gathering at the Intergovernmental Panel on Climate Change (IPCC) are of the view that anthropogenic GHG emissions are the cause of global warming.]]> ... [Read more]

<Key points> The real economy’s limited response to monetary policy Views also exist that quantitative easing has limited room for further expansion Agony deepens among central banks as unstable market conditions continue The Bank of Japan blindsided most forecasts and decided to adopt a negative interest rate policy (a policy that sets the interest rate at below zero on current account deposits that banks keep with the BOJ) at its Monetary Policy Meeting on January 29. The context that can be suspected here is the concern, among others, that the economy would struggle further as a result of the great market volatility that has been occurring since the beginning of the year, as the inflation rate did not rise as intended despite the unprecedented quantitative and qualitative monetary easings that were implemented over a period of three years. In fact, expectations of inflation that ... ... [Read more]

Mr. Kuroda, it was 20 March 2013 when you were appointed as the 31st Governor of the Bank of Japan (BOJ). Almost three whole years have passed since then. Today I’d like to have you reflect back over your time as governor since your appointment, and to hear about your outlook for the future. Firstly, could you please tell us about the way in which Prime Minister Abe Shinzo approached you with regard to your appointment to the role of Governor? Kuroda: At the time, I was working as president of the Asian Development Bank (ADB). I received a direct call from Prime Minister Abe at the ADB headquarters in Manila, in the Philippines. I’d prefer not to elaborate on the details of exactly what was said to me; but if I tell you my own feelings, it’s a fact that I was extremely ... ... [Read more]

There are products made in Japan that win in the field of global competition, are recognized as international brands, and are praised by consumers around the world. How are hit products from Japan created? And why are they loved by people in other countries? We have visited six companies that are constantly devoted to creating products that make the most of Japan’s good quality.   Juki Corporation is a leading manufacturer of industrial sewing machines and holds a 30% global market share. With sales offices in eighty locations around the world, it began a full-fledged overseas expansion in 1970. “High quality and after-sale services are important since industrial sewing machines are production machinery. This is a weakness of Western companies. We stock other companies’ products and also provide consulting services. If we can establish connections through replacement parts and repair, chances are they’ll buy ... ... [Read more]

Launched in April 2000, the Long-Term Care Insurance System is the newest social insurance system in Japan. The hardship faced by people giving family care began to be known widely to the public due to an older, full-length novel by Ariyoshi Sawako, which is titled Koukotsu no Hito (The Twilight Years). Since the late 1980s, the government has been addressing this issue by taking various measures, such as formulating the Gold Plan and the New Gold Plan to promote the establishment of facilities, the provision of welfare services at home, among other measures. However, it was difficult to address the issue fully with the welfare for the aged that was associated with the welfare placement system, or with the medical ]]> ... [Read more]

According to Sano Kyuuichirou, Director, Information Economy Division, Commerce and Information Policy Bureau, the Ministry of Economy, Trade and Industry (METI), “We share a critical feeling that Japan will lose its competitive advantage in every industry if no action is taken immediately to address the country’s status of falling behind its foreign counterparts in the field of artificial intelligence.” METI announced an interim report entitled “Changes in the response to the arrival of a data-driven society using CPS” on May 21, 2015. (Please refer to the Figure 2.) CPS stands for Cyber Physical System, meaning a system that analyzes data related to real-world problems with artificial intelligence (AI) technology and sends the analytical results back to the real world. In the field characterized by the theme of a data-driven society using CPS, Google is on its way to becoming a market leader. In this ... ... [Read more]