Japan's premier tough talks 'an alarm signal' - China Daily

BEIJING - Japanese Prime Minister Yoshihiko Noda said on Wednesday he was concerned about China's military development, urging his neighbor to act as a "responsible member of the international community".

"I am concerned about their reinforcement of national defense power, which lacks transparency, and their acceleration of maritime activities," Noda told the Japanese parliament.

This is not the first time Noda, labeled as hawkish toward China, has made such statements in public.

In an article published in the latest edition of the Japanese magazine Bungei Shunju, he said China's "high-handed foreign posture ... backed by its military capabilities ... is stoking fears that China will disrupt the order within the region".

"Noda's accusation that China lacks transparency in its military development is invalid as the definition of 'transparency' is ambiguous," said Liu Jiangyong, a professor of Japanese studies at Tsinghua University in Beijing.

"Nations' armed forces are by nature highly confidential."

Yang Bojiang, a professor of Japanese studies at the Beijing-based University of International Relations, said Noda's remarks were partly catering to domestic public opinion, as he got elected at a tough time for Japan.

Yang added that, as a realist, Noda would adopt policies that would protect both national interests and his own leadership, as the ability to successfully manage relations with China has become a yardstick for Japan's leader.

This was evident in Noda's speech to the parliament. Though voicing his concern about China's military development, he also said Japan wants to deepen relations with China in the run-up to next year's 40th anniversary of the restoration of diplomatic ties, adding that he planned to visit China at a convenient time for both sides.

He also altered his stance toward historical problems by pledging he would not visit the Yasukuni Shrine during his premiership.

Before taking office, he said he did not believe Japan's Class A war criminals of World War II were guilty of war crimes.

Yasuo Ichikawa, Japan's new defense minister, has also tried recently to soothe relations.

He said that while the alliance with the United States remains the core of Tokyo's security policy, he wants to improve ties between the armed forces of China and Japan.

"Any mishandling of relations with China will result in criticism by opposition lawmakers, and perhaps from those in his own party as well," Michael Auslin, director of Japan studies at the American Enterprise Institute, said in an article published in the Wall Street Journal.

"Noda cannot afford to isolate Japan any further," Auslin said.

But Noda's reassuring words can hardly offset his remarks on China's military, which will deepen Beijing's distrust about his China policy, said Yang.

Yang said these remarks "send an alarm signal" ahead of his China visit, which could take place as early as next month.

"It added a dimension to Chinese leaders' expectations of their upcoming talks," said Yang.

Gao Yuan contributed to the story.

China Daily

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Japan to transfer North Korean defectors to S. Korea - Mainichi Daily News

Japan Coast Guard members tend to the small boat found on Sept. 13 off the coast of Ishikawa Prefecture carrying nine North Korean refugees, in Kanazawa on Sept. 14. (Mainichi)

TOKYO (Kyodo) -- The Japanese government plans to transfer nine North Korean defectors currently in Japan to South Korea in accordance with their wishes, government officials said Wednesday.

Tokyo will enter talks with Seoul as early as later this week on the transfer, the officials said. A South Korean government official has already said the country would welcome the nine if they wish to go to the South.

"We have heard from the North Korean defectors what they desire," Chief Cabinet Secretary Osamu Fujimura told a press conference. "We would like to appropriately engage in talks with the South Korean government after obtaining details."

After being found adrift aboard a wooden boat off the Noto Peninsula in Ishikawa Prefecture on Tuesday, the nine people were identified as North Korean defectors according to documents carried by them and were allowed to land in Japan earlier Wednesday.

The nine, including three children, were in good health after spending the night on a Japan Coast Guard patrol vessel at a port in Kanazawa, Ishikawa Prefecture, on the Sea of Japan coast in central Japan.

On Wednesday morning, the nine applied for temporary refuge as they met with officials from the Nagoya Regional Immigration Bureau and the 9th Regional Coast Guard Headquarters aboard the patrol vessel.

The immigration bureau granted provisional landing permission, allowing them to be airlifted from Kanazawa to an immigration facility in Nagasaki Prefecture, southwestern Japan, in the afternoon to complete the procedures for temporary refuge.

A man who presented himself as the leader of the nine told immigration officials that he used to make a living by octopus fishing in North Korea, according to the officials.

But living conditions became more difficult every year due to the considerable amount of money he had to pay to the North's Korean People's Army, the man was quoted as telling the officials.

A Japan Coast Guard ship is seen guiding the unidentified boat, presumed to be carrying North Korean defectors, to the nearest port along the Noto Peninsula of Ishikawa Prefecture in this photograph taken from a Mainichi helicopter at 1:20 p.m. on Sept. 13. (Mainichi)

The man also said that after hearing about people's lives in South Korea he began to think that they would be better off living there, according to the officials.

The immigration authorities have found no criminal records for any of the defectors and will grant them formal landing permits and carry forward embarkation procedures to send them to South Korea.

The authorities will further investigate how the man, whom they believe to be a fisherman, was able to obtain such information about South Korea.

In June 2007, the last time North Korean defectors arrived in Japan by boat, a family of four people who landed in Aomori Prefecture on the northern tip of Honshu were transferred to an immigration facility in Ibaraki Prefecture.

It took two weeks before they left for South Korea as one of them was in possession of stimulant drugs and had to wait for prosecutors to suspend an indictment.

"The ongoing case is different from the past one as no crime has been found," a senior government official said, indicating that the nine could be transferred to South Korea without much delay.

Dealing with North Korean defectors is a delicate issue in Japan due to an array of unresolved tensions, including those related to Pyongyang's abduction of Japanese nationals as well as the North's missile threats and nuclear ambitions.

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Typhoon dumps record rain on Japan, killing 25 (Daily Caller)

TOKYO (AP) — Rescuers in Japan dug through mud-caked debris and searched the banks of swollen rivers Monday for those missing in a powerful typhoon that left at least 25 people dead, the latest disaster for a country still recovering from a calamitous tsunami six months ago.

Typhoon Talas, which was later downgraded to a tropical storm, lashed coastal areas with destructive winds and record-setting rains over the weekend. In addition to the dead and missing, thousands more were stranded as the typhoon washed out bridges, railways and roads.

“We will do everything we can to rescue people and search for the missing,” said new Prime Minister Yoshihiko Noda, who took office just one day before the typhoon hit and whose government is still struggling to deal with the tsunami recovery and the ensuing nuclear crisis.

The typhoon was believed to be the worst to hit Japan since 2004, when 98 people were killed or reported missing. It caused most of its damage on the Kii Peninsula, in central Japan southwest of Tokyo and hundreds of miles (kilometers) from the country’s tsunami-ravaged northeastern coast.

Public broadcaster NHK said that as of Monday, 25 people had been confirmed dead in the typhoon, while the Kyodo news agency put the toll at 27. Most of the dead were in Wakayama prefecture. Wakayama official Seiji Yamamoto said 17 were killed there and another 28 missing.

“There are so many roads out that it is hard to count them all,” he said.

Rains and wind were recorded across wide swaths of Japan’s main island, but no significant damage was reported in the northeast, which is still recovering from the tsunami and earthquake that left nearly 21,000 dead or unaccounted for.

As the typhoon approached, evacuation orders or advisories were issued to 460,000 people. At least 3,600 people were stranded by flooded rivers, landslides and collapsed bridges that were hampering rescue efforts, Kyodo reported.

The center of the season’s 12th typhoon crossed the southern island of Shikoku and the central part of the main island of Honshu overnight Saturday. It then moved slowly north across the Sea of Japan off the country’s west coast, the Japan Meteorological Agency said.

It was still offshore in the Sea of Japan on Monday.

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Japan's industrial output up for 4th straight month - Mainichi Daily News

Nissan Motor Co.'s Oppama factory in Yokosuka, Kanagawa Prefecture, is seen on July 2. (Mainichi)

TOKYO (Kyodo) -- Japan's industrial production rose 0.6 percent in July from the previous month for the fourth straight monthly rise, in a fresh sign of recovery from the aftermath of the massive March 11 earthquake and tsunami, government data showed Wednesday.

Growth, however, decelerated from the 3.8 percent rise in June, and manufacturers anticipated that output will grow 2.8 percent in August but fall 2.4 percent in September, the Ministry of Economy, Trade and Industry said in a preliminary report.

The ministry maintained its basic assessment, saying that output is "on a recovery trend."

Japan's production has been recovering from a deep slump caused by the March natural calamities, which largely affected major auto and high-tech makers by disrupting the nationwide supply chain of industrial products.

But increasing concerns over the outlook of overseas economies and the yen's strength, coming close to postwar record highs, cast a cloud over the Japanese economy, with these factors believed to be major reasons behind the somber production outlook for September, Takahide Kiuchi, chief economist at Nomura Securities Co., said.

"The environment for exports is deteriorating," he said, adding that there is a growing risk Japan's industrial output will not regain pre-disaster levels until next year.

For July, the index of output at factories and mines stood at 93.2 against the base of 100 for 2005, the ministry said. Figures are adjusted for seasonal factors.

By sector, output by transport equipment makers, including automakers, rose 5.3 percent, marking the third consecutive month of growth.

Output of electronic information and communications equipment, such as mobile phones and personal computers, shot up 15.7 percent and that of general machinery makers gained 0.6 percent.

On the other hand, output of electronic parts and devices fell 3.4 percent in reaction to a recent surge in demand for parts used in liquid crystal display TVs ahead of Japan's switch to terrestrial digital broadcasting in late July.

Power shortage concerns, stemming from the Fukushima nuclear crisis, triggered by the March disaster, were not extensively cited as a reason behind the decelerated output growth for July by surveyed manufacturers, a ministry official said in briefing the data.

The index of industrial shipments grew 0.2 percent to 94.5 and that of industrial inventories was down 0.2 percent to 100.6.

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Kenya sweeps marathon / Akaba leads Japan with 5th-place finish - The Daily Yomiuri

Ken Marantz / Daily Yomiuri Sportswriter

DAEGU, South Korea--Even a tumble late in the race couldn't slow down Edna Kiplagat. Even if it had, a gold medal for Kenya was all but a sure thing.

Kiplagat led Priscah Jeptoo and Sharon Cherop in a Kenyan sweep of the women's marathon, the opening event of the IAAF world championships here on a humid Saturday morning.

In a disappointing day, Japan's highest finisher, Yukiko Akaba, placed fifth.

Kiplagat, the 2010 New York City Marathon champion, led a team spurt that broke open a large pack at 33 kilometers, then pulled away from her compatriots with three kilometers to go on to win in 2 hours 28 minutes 43 seconds.

"At 33 kilometers, I tried to run at the front of the group and when I looked back two times, I found the group was not following me," Kiplagat said.

"I had in mind that if I pushed more and run as fast as I can, I might win the race."

Jeptoo finished second in 2:29:00, with Cherop holding off a late charge by Ethiopia's Bezunesh Bekele to take the bronze by seven seconds in 2:29.14 and complete the first ever marathon sweep at a world championships.

Akaba led Japan's contingent with a time of 2:29:35.

"A little bit more and I would have won a medal," said Akaba, who has the consolation of earning 10,000 dollars in prize money. "I was aiming for a medal, so it's disappointing.

"The spurt at 33 kilometers was much faster than I expected and I couldn't keep up."

Yoshimi Ozaki, the silver medalist at the 2009 world championships in Berlin, slogged home in 18th in 2:32:31.

"In Berlin, at 35 kilometers I still had plenty left, but this time I didn't have it," Ozaki said.

Azusa Nojiri, Ozaki's Daichi Seimei teammate who early on took over the pace-setting duties in the race, finished one place behind her in 2:33:42.

Remi Nakazato placed 10th in 2:30:52, while Mai Ito was 22nd in 2:35:16.

With plenty in reserve after a slow pace took the lead group through the halfway point in a pedestrian 1:16:46, the Kenyans turned the race into a three-woman showdown soon after the 35-kilometer mark.

All that needed to be decided was who got which medal--although an incident at the 38-kilometer water station nearly changed the dynamics.

Kiplagat, cutting in front of Cherop to get a water bottle, clipped her foot and tumbled hard to the ground.

"I didn't know if I was going to get up and pick it up again," said Kiplagat, a mother of two who is married to her coach. "I felt I was running good again. This was a surprise."

In an impressive act of team solidarity, Cherop turned back to make sure Kiplagat was alright.

"I was so annoyed because it was not my fault, but after seeing that my friend has fallen down, I had to slow down and wait for her," she said.

Meanwhile, in first-day action on the track, pole vaulter Daichi Sawano barely squeezed through qualifying, while two other Japan record-holders and national champions failed to make the cut in their events.

Sawano was one of five vaulters to tie for 12th place by clearing 5.50 meters on their first attempt--if just one had cleared the next height of 5.60, none of the others would have advanced.

Minori Hayakari failed to advance in the women's 3,000-meter steeplechase after placing eighth in her heat in 10:05.34, while Masato Yokota's sixth-place finish in 1:47.60 in the first round of the men's 800 left him short of a semifinal berth.

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Evacuees want PM with vision - The Daily Yomiuri

The Yomiuri Shimbun

Victims in the disaster-hit region are eagerly awaiting the election of Prime Minister Naoto Kan's successor in the hope that the new prime minister will show leadership and a future vision for the region.

Five members of the Democratic Party of Japan kicked off their election campaigns Saturday after announcing their candidacies.

The disaster victims are placing high hopes on Kan's successor, as the current prime minister is generally considered to have failed to take proper measures in response to the March 11 Great East Japan Earthquake and the nuclear crisis at the Fukushima No. 1 nuclear power plant.

"I don't want [the next prime minister] to seek immediate benefits. He should look 10 years, 100 years and 1,000 years into the future," said Hiromichi Shishido, 52.

Shishido is now taking refuge in rented accommodations in Motomiya, Fukushima Prefecture, as he had to evacuate from his house, located within a 20-kilometer-radius from the nuclear power plant. He complained about the measures taken by the Kan administration to deal with the nuclear crisis, saying, "[The administration] was too slow in making decisions."

Some victims complained about the current administration's failure to convey information to the public.

"I want the new administration to refrain from hiding the truth and convey accurate information," said Mihoko Oda, 44, from Okumamachi, Fukushima Prefecture.

She is taking refuge in Aizu-Wakamatsu in the prefecture with her 17-year-old son, a high school student, and 8-year-old son, a third-grader at a primary school. Her 48-year-old husband is living in Fukushima.

"If we can't return to our house, I want the government to say so explicitly. We could then move forward with our lives," she said.

Meanwhile, some people see few clear-cut differences in the policies of the candidates.

"They put aside policy debates, and just snuggle up to [former DPJ President Ichiro] Ozawa to win the votes [from Ozawa's group]," said Ikuro Okuda, 64, a shipbuilder in Ishinomaki, Miyagi Prefecture. He is staying at a primary school gymnasium in Ishinomaki.

On Friday, a job-hunting seminar for people who hope to work in Fukushima was held in Minato Ward, Tokyo, under the sponsorship of the Fukushima prefectural government.

"As the number of tourists [visiting Aizu-Wakamatsu] has decreased, the city has become less vibrant. I want to work at a company in my hometown [Aizu-Wakamatsu], so I want the new prime minister to put a great deal of effort in the rehabilitation program," a 21-year-old student of Komazawa University said.

A 36-year-old man who is trying to find a better job through a Hello Work job-placement office in Kamaishi, Iwate Prefecture, said the new prime minister must show strong leadership and ability to act.

Before the disaster, the man worked as a nonregular employee at a local office of Japan Post Service Co. in Otsuchicho, a town neighboring Kamaishi, but lost his job as the office was swept away by the tsunami. He currently is a part-time factory worker.

He thinks the Kan administration's reconstruction steps and its economic measures came too late. "I want [the new government] to introduce a system that increases employment," he said.

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Moody's lowers Japanese government debt rating - The Citizen Daily

Tokyo. Moody's Investors Service yesterday downgraded the government of Japan's rating to Aa3 from Aa2, citing large budget deficits and the build-up in the Japanese government debt since the 2009 global recession.

"Over the past five years, frequent changes in administrations have prevented the government from implementing long-term economic and fiscal strategies into effective and durable policies," the ratings agency said.

It also said the twin disasters in March and the ongoing crisis at the Fukushima Daiichi Nuclear Power plant have delayed recovery from the 2009 global recession and added to deflationary conditions.

The cut in government debt rating came at a time when Japan is preparing its sixth prime minister in five years. Prime Minister Naoto Kan said on Tuesday that he expected to see the next leader on August 30.

Earlier this month, the Japanese government downgraded its economic growth forecast for fiscal 2011 to 0.5 per cent, one percentage point less than its previous forecast, due to the adverse affects of the March 11 double disasters.

The Cabinet Office had originally predicted the economy would grow 1.5 per cent in actual terms for the current fiscal year ending next March.

However, Moody's said the outlook for the country is stable. "Support for the stable outlook comes from the undiminished home bias of Japanese investors and their preference for government bonds, which allows the government's fiscal deficits to be funded at the lowest nominal rates globally," it said.

The dollar quickly came off an intraday high of 76.88 yen hit after Moody's cut its rating on Japan's debt and as its crosses came under broad pressure after S&P futures SPc1 fell 0.8 per cent and gold gained 0.9 per cent on renewed risk aversion.

"The scheme treats the symptoms not the underlying cause," said Todd Elmer, currency strategist at Citi in Singapore.

"So it's not going to have any impact whatsoever in supporting dollar/yen, and given that there have been some expectations for stronger measures ... I wouldn't be surprised if dollar/yen traded lower on the day," he said.
Japan also said it would ask major financial firms to report on FX positions held by dealers for the period to the end of September. The potential impact from this is hard to gauge at this point, however, since it is unclear what action Japanese authorities would take with such information, traders said.

Moody's downgraded Japan by one notch to Aa3, blaming a build-up of debt since the 2009 global recession and revolving-door political leadership that has hampered effective economic strategies. Still, such cuts have had scant effect on yields as the vast bulk of Japanese debt is owned by the Japanese themselves. (Xinhua) 

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Chinese patrol boats enter Japanese waters off Senkaku islands - Mainichi Daily News

In this photo released by Japan Maritime Safety Agency, a Japan Coast Guard patrol boat, foreground, sails by a Chinese vessel in waters off disputed islands known as Senkaku in Japan and Diaoyu in China, in the East China Sea on Wednesday, Aug. 24, 2011. (AP Photo/Japan Maritime Safety Agency)

NAHA (Kyodo) -- Two Chinese fishery patrol boats briefly entered waters near the Japan-administered Senkaku Islands on Wednesday morning, the Japan Coast Guard said, triggering an immediate protest from Tokyo over the incident that could rekindle tension between the two countries.

Following the Chinese patrol boats' entry into the Japan-controlled waters, Vice Foreign Minister Kenichiro Sasae lodged a protest with China's Ambassador to Japan Cheng Yonghua, Chief Cabinet Secretary Yukio Edano said at a news conference.

The Japanese government also set up a liaison office to gather more information on the incident and filed a protest with the Chinese Foreign Ministry through the Japanese Embassy in Beijing, according to Japanese officials.

Edano said Sasae summoned the Chinese envoy to "strongly protest" over the incident and stated Japan's basic position that "there is no doubt that the Senkaku Islands, historically and based on international law, are an integral part of Japanese territory."

Cheng told Sasae that he will relay the Japanese protest to Beijing but reiterated China's territorial claim to the disputed islands.

The Japanese vice foreign minister expressed deep regret over the incident, saying Tokyo cannot overlook the Chinese boats' entry into Japanese territorial waters as an innocent passage and requested that China prevent a recurrence, according to the Japanese Foreign Ministry.

The top government spokesman called on China to exercise restraint, saying, "I would like to ask the Chinese side to take appropriate measures from a broad standpoint of (relations between) Japan and China."

Foreign Press Secretary Satoru Sato also urged Beijing to handle the matter appropriately in view of recent efforts to improve bilateral ties, such as China's aid to Japan after the March 11 earthquake and tsunami, and the two governments' preparations for next year's 40th anniversary of the normalization of diplomatic ties.

A Japanese patrol vessel from the regional coast guard headquarters in Naha, Okinawa Prefecture, found the Chinese boats around 6:15 a.m., 30 to 33 kilometers north-northeast of Kuba Island in the Senkaku islet group.

When the Japanese patrol vessel issued a warning to the Chinese crew, they radioed back, saying, "Diaoyu (the Chinese name for the Senkakus) and its neighboring islands are China's indigenous territories. We are discharging our legitimate duties in Chinese waters," according to the coast guard.

The Chinese patrol boats remained in the territorial waters from 6:36 a.m. to 7:13 a.m. and then moved away before one of them reentered for seven minutes from 7:41 a.m.

They then traveled in the contiguous zone, defined by Japan in line with international law as an area where Japanese laws are applicable just outside its territorial waters, according to the coast guard.

It was the first time since December 2008 that Chinese government-related vessels have entered Japanese waters near the Senkaku Islands. At the time, two Chinese survey ships remained in the territorial waters for nine hours.

On Wednesday afternoon, Edano said the Chinese patrol boats were continuing to navigate in the contiguous zone on a clockwise course and that Tokyo will deal with the vessels based on the U.N. Convention on the Law of the Sea.

The coast guard's regional headquarters later said the patrol boats had left the zone by around 5 p.m. and headed toward China.

Even though the Chinese vessels' presence in the contiguous zone was not illegal, Tokyo will consider taking some action depending on their movements, including a protest by Foreign Minister Takeaki Matsumoto, Japanese officials said.

The U.N. convention stipulates that the passage of foreign vessels in territorial waters cannot be considered innocent if they engage in activities that threaten the sovereignty of the coastal state or acts of propaganda aimed at affecting the defense or security of that state.

In September last year, tensions flared up between Japan and China over the disputed islands when a private Chinese fishing boat collided with Japanese patrol vessels near the uninhabited islands in the East China Sea.

Edano said since that incident, Chinese vessels have approached the Senkaku Islands on 11 occasions, but without entering Japan's territorial waters.

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Kan too preoccupied to stem yen's relentless rise - The Daily Yomiuri

The Yomiuri Shimbun

Even as the yen charged to a fresh postwar record high Friday and piled more pressure on the Japanese economy, the silence from outgoing Prime Minister Naoto Kan and his close aides was deafening.

Kan, who has admitted economic policies are not his forte, has left the task of dealing with the yen's appreciation since the March 11 earthquake-tsunami disaster almost entirely with the Finance Ministry.

Even after the yen marked a record high of 75.95 yen in New York late Friday, topping the previous high of 76.25 yen posted March 17, the prime minister's official residence remained remarkably silent. Instead, the focus inside seemed to be more on the process of finding a successor to Kan as the nation's political leader.

Aides quoted the prime minister as saying he intends to "keep watching the situation" for the time being before deciding whether the government and the Bank of Japan should intervene in the markets again or launch further quantitative monetary easing.

Chief Cabinet Secretary Yukio Edano, when asked at a press conference Friday about the response to the strengthening yen, said only the government will "watch the foreign exchange situation even more carefully."

Many officials close to Kan believe there is little Japan can do to rein in the yen, other than a market intervention and quantitative easing, because the yen's climb has been fueled by financial unrest in the United States and Europe, sources said.

However, even some of Kan's aides have wondered aloud whether the prime minister has lacked urgency when dealing with currency moves that are battering Japanese exporters.

"The prime minister can't afford to worry about that" because he is tied up with his pending resignation, one aide said. "The fact that investors are gobbling up the yen despite the political situation here shows just what bad shape the economies of the United States and Europe are in."

After the credit rating of long-term Japanese government bonds was downgraded in January, Kan caused an uproar when he admitted he was "out of touch with such things."

A source close to Kan said the prime minister's awareness of his ineptitude in handling economic policies had made him "less interested in currency woes than the nuclear crisis and energy policies."

Government inaction also reflects the fact that the administration of the lame-duck prime minister can hardly respond flexibly to fast-changing currency markets, according to analysts.

Discussions on the details of a third supplementary budget for fiscal 2011 likely will make no progress before a successor to Kan as prime minister is selected, they said.

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Strong yen threatens to force Japanese firms to shift production overseas - Mainichi Daily News

Nissan Motor Co.'s Oppama factory in Yokosuka, Kanagawa Prefecture, is seen on July 2. (Mainichi)

Japanese companies including Toyota Motor Corp. could have no option but to shift production overseas if the yen, which recently hit a post-war record high against the U.S. dollar, remains strong for a long time.

"The strong yen will affect a wide range of businesses. I'm worried that Japan's entire industrial sector could experience a downturn," a top executive at a major electronics company told the Mainichi on Aug. 19. An official of a heavy-equipment manufacturing firm said, "Our international competitiveness will steadily decline."

According to a survey of 119 major Japanese companies conducted by the Mainichi from mid-July to early August, the average exchange rate the companies assumed against the dollar for the current business year (ending at the end of March 2012) was the 82 yen level. Currently, the yen is 6 yen higher than that against the dollar.

As for the auto industry, for every one-yen increase against the dollar Toyota's operating profits are projected to drop by 30 billion yen and Nissan Motor Co.'s by 20 billion yen. Toyota fell into the red in the April-June quarter, and calculates that the strong yen cut profits then by 50 billion yen. Toyota is trying to keep its production lines in Japan, but a senior company official said, "We have no option but to have more parts produced abroad."

Mitsubishi Electric Corp. set its assumed exchange rate at 85 yen to the dollar for the business year ending March 2012. If the rate against the dollar is 1 yen stronger than that, profits will drop by 4 billion yen.

"We have to take conventional measures such as cost-cutting and increasing imports of raw materials, but if the yen continues to be strong for a long time, there are limits to what one company can do to deal with it," said a Mitsubishi Electric official.

Takashi Miyoshi, Executive Vice President of Hitachi Ltd., said, "We have to do more business overseas. Otherwise, we will lose cost competitiveness."

The strong yen has merits: people can travel abroad from Japan and companies in Japan can import raw materials from abroad at lower prices. But most economists believe that the adverse effects of the strong yen on the economy caused by poor business performances will outstrip the merits of the strong yen.

The government and the Bank of Japan intervened in the foreign exchange market to sell the yen on Aug. 4, but the effects of such efforts were limited and business managers have become more frustrated. Prime Minister Naoto Kan has said his government would decide on whether to join the Trans-Pacific Partnership (TPP) free trade pact, but that decision has yet to be made. While the government has failed to implement measures to help boost corporate competitiveness, the yen has strengthened.

"Under these circumstances, production bases could be moved overseas," said a top official of a steel company.

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Dollar sinks to record low against Japanese yen in NY - Mainichi Daily News

NEW YORK (Kyodo) -- The U.S. dollar briefly lost ground against the Japanese currency in New York on Friday to mark a postwar record low of 75.95 yen, breaching the previous record of 76.25 yen set five months ago, on concern over the U.S. and European economies.

The sharp rise in the yen is expected to prompt Japan's monetary authorities to consider taking measures such as intervening in the market to sell the yen as they did Aug. 4 and additional monetary easing measures in an effort to weaken the Japanese currency.

There is also concern the strong yen will deal a blow to Japan's exporters as the country struggles to recover from the March 11 earthquake and tsunami.

On Friday in New York, the dollar later recouped losses. At 5 p.m., it fetched 76.49-59 yen, compared with 76.47-49 yen at 5 p.m. Friday in Tokyo.

Remarks by Japan's top financial diplomat Takehiko Nakao that were taken to mean Japanese monetary authorities were hesitant to step into the market appeared to be behind the dollar's temporary plunge.

The vice finance minister for international affairs suggested in an interview with The Wall Street Journal on Friday that while the Japanese government would take appropriate actions when necessary, it has no plan to intervene frequently.

The dollar skidded after his remarks were quoted by Reuters news agency, which said the interview encouraged yen buying.

The credibility of the dollar has been challenged since the Aug. 5 historic downgrading of the United States' triple-A U.S. credit rating.

The Group of Seven (G-7) industrial economies subsequently issued a joint statement calling for a stable market but its impact was limited as it contained no specific steps such as possible concerted market intervention.

The U.S. currency has also come under pressures since the U.S. central bank on Aug. 9 announced it would maintain its effectively zero interest rate policy over an extended period. Some data released recently also pointed to a deteriorating U.S. economy.

The fiscal woes of the euroland, triggered by the Greek debt fiasco, that have been generating concern about Europe's financial systems and economies have also prompting a fund shift to the Japanese yen, market players said.

Recent gyrations of global stock markets are also seen as encouraging buying of the yen, regarded as a relatively safe currency.

"Amid speculation that the Federal Reserve Board may convene an urgent meeting shortly, investors, factoring in the possibility of another monetary easing step, sold the dollar," a dealer said.

New York stocks lost ground sharply Friday, sending the Dow Jones index down 1.57 percent, or 172.93 points, to finish at 10,817.65, on the heels of weak share prices in Asia. The tech-heavy Nasdaq Composit Index finished 1.62 percent or 38.59 points lower at 2,341.84.

The previous low of the dollar at 76.25 yen was posted March 17 in Sydney, just days after the March 11 earthquake and tsunami disaster hit Japan. The G-7 at that time took rarely seen concerted action to step into the market to weaken the yen.

On Aug. 4, the Japanese government intervened in the currency market on its own, while the Japanese central bank moved to further ease credit, pushing the dollar temporarily higher.

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President strikes a sharp tone on Japan - JoongAng Daily

President Lee Myung-bak and the first lady, Kim Yoon-ok, along with other national leaders, wave Korean flags at a nationally televised ceremony commemorating Liberation Day, marking the end of Japan??s colonial rule of the Korean Peninsula, yesterday at the Sejong Center for the Performing Arts in central Seoul. [YONHAP]
Japan must acknowledge its past and teach ??correct?? history to its youth, President Lee Myung-bak demanded yesterday, in a departure from his Liberation Day address last year when he emphasized reconciliation, reflecting the lowest point in Korea-Japan relations thus far in Lee??s presidency.

Lee??s remarks were part of a wide-ranging speech at a ceremony televised nationwide to mark the nation??s independence from Japanese rule, amid growing public resentment toward its neighbor??s intensifying territorial claims over the Dokdo islets.

??Japan has a responsibility to teach its young generation the truth about what happened in the past,?? Lee said. ??By doing so, we can then allow young people in Korea and Japan to forge ahead into the new era with a correct recognition and understanding of history. This kind of cooperation will greatly contribute to the peace and prosperity of the world as well as Northeast Asia.??

The pain and suffering inflicted by the Japanese, Lee added, would be something that Koreans would never forget.

??For the sake of the future relationship, Korea will not be bound by the unfortunate past. But at the same time, the Korean people can never forget the history of the recent past altogether,?? Lee said.

Lee??s comments on Japan were brief but notable for their strong - and deliberate - language, a senior Blue House official said.

??You have to pay attention to how he arranged his words, particularly the part that Koreans can never forget the history,?? the official said on the condition of anonymity.

The president came into office in 2008 vowing to shift the national conversation toward a future-oriented relationship with its former colonial ruler. Last year, Lee renewed his calls for reconciliation ??to develop a new kind of future.??

But relations between the two nations have soured dramatically in recent months, with Japan??s approval of new textbooks as well as its annual defense white paper that repeated its claims over the Dokdo islets. A day before Japan issued its latest white paper, three Japanese lawmakers protesting Korean control of Dokdo attempted to visit a nearby island but were barred from entry.

Lee, despite his sharper words for Japan yesterday, did not mention Dokdo directly, which the Blue House official said was not necessary to do ??because what Lee said ... included his message on Dokdo.??

The aide added that the president had made his position clear on the disputed territory in an April press conference: ??Even if heaven and earth upheaval happens twice, that won??t change the fact that Dokdo is our land.??

Yet the Democratic Party criticized the president for not being sterner on Japan in his speech yesterday.

??Lee??s position was nothing more than a lecture from an ethics teacher,?? DP spokesman Lee Yong-sup said. ??Maybe it is too much to ask of him to face the people??s requests that the time has come for the president to show the Korean people??s self-esteem over Japan??s distortion of history.??

In contrast to media speculation before his address, Lee only briefly touched on North Korea in his speech yesterday, despite expectations that the president would use the opportunity to send a message to the regime.

??Nothing can be accomplished through provocations,?? Lee said, stressing the importance of building mutual trust. He also said that South Korea would continue humanitarian assistance for children and natural disaster victims in the North.

By Ser Myo-ja [myoja@joongang.co.kr]

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