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]

As the search engine giant, Google has a dominant market presence in Internet advertising by a significant margin. But Google doesn’t have a monopoly in every market. In Asia, in particular, local competitors have a great deal of importance within their own markets: Baidu in China; Naver in South Korea; and Yahoo with a stronghold over Japan. Please take a look at the figure on the lower right, which shows the search engine usage statistics for Japan. According to the statistical survey, Yahoo Japan (in red) has opened up a slight lead over Google (in blue) in terms of market share in Japan. It is true that Yahoo played a significant role in the early days of Internet services when they were first introduced to Japan in around 2000, and the company still maintains a strong brand image among search engine users in the ... ... [Read more]

Yamamoto Kozo, a member of the House of Representatives, of the Liberal Democratic Party, has been involved with the drafting of Abenomics initiatives, advocating, if nothing else, large-scale monetary easing since before the second Abe Shinzo administration was formed. Yamamoto, who is also the chairman of the “group that makes Abenomics a success,” a Diet member caucus, was reportedly surprised and could not keep himself from displaying anger when he heard the announcement of the second stage of Abenomics on September 24. The content of the second stage caught him by surprise like a thunderbolt, as he did not recognize any term such as “financial measures” in the list of policies. The Nagatacho sources consider that a significant change has taken place in the part of the brain of the Abe administration that drives financial measures. People who had advocated reflation were excluded from ... ... [Read more]

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The Dichotomy of Global and Local Economies As the premise for understanding my unique prescription for what should be done to revive the regions, I would like to point out that the Japanese economy is divided into a global (G) sphere and a local (L) sphere. The players in the global economic sphere are the big corporations centered on the manufacturing industry and the IT industry. They compete with the rest of the world; to use a sporting metaphor, they compete at the Olympic level. On the other hand, the actors in the local economic sphere are community-based small and medium-sized companies in retail and wholesale, transportation, distribution, social welfare, day care, nursing and medical care. The focus is on customer-facing services, but since the locality imposes limitations on location, the sporting metaphor would be a prefectural tournament. In the global sphere, perfect competition ... ... [Read more]

Dubbed a “rock star” economist as he emerged from France, Paris School of Economics Professor Thomas Piketty has also caused a major sensation in Japan. The Japanese translation of his stand-out publication, Capital in the Twenty-First Century, sold more than 100,000 copies within the first few weeks of its release. In the publishing industry, which is suffering from a structural publishing slump, publishers of the Japanese editions of foreign books have become an object of envy. The theme of the book is inequality, and in Japan, where widening inequality has long been a source of lively debate, “inequality” has become a point of contention which has even found its way into economic policy debates in the National Diet. Capital that doesn’t earn money and the decline of entrepreneurship However, isn’t the reality in Japan something unique and quite different from Professor Piketty’s argument? If ... ... [Read more]

< Key Points > The international finance system has reached a key turning point The lack of a Board of Directors in AIIB, as well as China possibly using AIIB for political purposes, are still major concerns Given these concerns, it was the right decision for Japan not to join as a charter member in order to negotiate the MOU It was a surprise that the UK decided to join in the AIIB, followed by Germany, France and Italy Japan should maintain the option of joining the AIIB depending on the AIIB’s reform proposals At the time of the IMF and World Bank Spring meeting in Washington in April, there was much media attention over the Asian Infrastructure Investment Bank (AIIB) proposed by China. Both the IMF and the World Bank have publicly welcomed the AIIB as a sign of increase in funding for ... ... [Read more]