Japan's Seven & i Brushes Off Quake Impact - Wall Street Journal

TOKYO—Reflecting a broad recovery in Japanese consumer sentiment since the March 11 earthquake, the nation's largest retailer by revenue on Tuesday reported a 4.1% increase in net profit for the June-August quarter and raised its earnings outlook for the full fiscal year.

Seven & i Holdings Co., which runs 7-Eleven convenience stores in Japan and the U.S. as well as Seibu and Sogo department stores and big-box Ito-Yokado stores, reported a net profit of ¥39.69 billion ($517.8 million) during the period, compared with a year-earlier profit of ¥38.13 billion.

The company said the ...

TOKYO—Reflecting a broad recovery in Japanese consumer sentiment since the March 11 earthquake, the nation's largest retailer by revenue on Tuesday reported a 4.1% increase in net profit for the June-August quarter and raised its earnings outlook for the full fiscal year.

Seven & i Holdings Co., which runs 7-Eleven convenience stores in Japan and the U.S. as well as Seibu and Sogo department stores and big-box Ito-Yokado stores, reported a net profit of ¥39.69 billion ($517.8 million) during the period, compared with a year-earlier profit of ¥38.13 billion.

The company said the ...

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Japan's Bonds Gain as Stocks Slump, Demand Rises at Auction - BusinessWeek

October 04, 2011, 3:13 AM EDT By Mariko Ishikawa

Oct. 4 (Bloomberg) -- Japan’s bonds rose, driving down 30- year yields for the first time in seven days, as stocks fell, boosting demand for the relative safety of government debt.

Benchmark 10-year yields dropped from near a one-month high on concern Greece will default and Europe’s debt crisis will worsen. Bonds also advanced after today’s auction of 10-year debt drew the highest demand in three months and as Goldman Sachs Group Inc. cut its forecasts for Japan’s economic growth and yields for the securities.

“The bond market is reflecting risk aversion,” said Toru Suehiro, a market analyst in Tokyo at Mizuho Securities Co., one of the 25 primary dealers obliged to bid at government debt sales. “Because there isn’t a fundamental resolution to the European problem, we may see a cycle of optimism and pessimism continue which will disappoint investors. I think pessimism will prevail in the end.”

Thirty-year yields fell 1.5 basis points to 1.905 percent at 3:26 p.m. in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The 2 percent securities maturing in September 2041 rose 0.29 yen to 101.811 yen. Benchmark 10-year rates fell 2.5 basis points to 0.99 percent after touching 1.025 percent on Sept. 30, a four-week high.

Ten-year bond futures for December delivery advanced 0.27 to 142.54 at the 3 p.m. close of the Tokyo Stock Exchange. The Nikkei 225 Stock Average sank 1.1 percent.

Today’s sale of 10-year bonds drew bids valued at 6.3 trillion yen ($82.2 billion), or 3.15 times the amount sold. That was the highest ratio since July even after the coupon was set at 1 percent, the least since November 2010.

‘Slightly Stronger’

“The results for the 10-year auction were slightly stronger than expected,” said Reiko Tokukatsu, a senior fixed- income strategist at Barclays Capital Japan Ltd. “Bonds tend to find more buyers on dips because sentiment in financial markets has deteriorated” amid the worsening situation in Greece.

Goldman Sachs halved its forecast for Japan’s growth to 0.1 percent during the fiscal year ending March 2012 owing to a slowdown in the global economy. The company also cut its forecast for Japan’s 10-year yields to 1.1 percent in three months from 1.25 percent.

European finance ministers meeting in Luxembourg pushed back a decision on the release of Greece’s next loan installment until after Oct. 13. It was the second postponement of a decision originally slated for this meeting.

--With reporting by Masaki Kondo in Tokyo. Editors: Nate Hosoda, Rocky Swift

To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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Japan's Industrial Output Rises Less Than Expected, Weighed by Strong Yen - Bloomberg

Enlarge image Commuters crowd a train station in Tokyo. Employers cut payrolls by 160,000 and a further 200,000 workers retired or abandoned efforts to find a job, leaving the seasonally adjusted number of employed at 59.4 million.

Commuters crowd a train station in Tokyo. Employers cut payrolls by 160,000 and a further 200,000 workers retired or abandoned efforts to find a job, leaving the seasonally adjusted number of employed at 59.4 million. Photographer: Toshiyuki Aizawa/Bloomberg

Sept. 30 (Bloomberg) -- Curtis Freeze, founder of Honolulu-based Prospect Asset Management Inc., talks about Japan's economy, financial markets, and government. Freeze speaks from Tokyo with John Dawson on Bloomberg Television's "First Up." (Source: Bloomberg)

Japan’s labor force shrank last month to its smallest size since October 1987, when the nation’s stock-market benchmark was 185 percent higher and land prices were 85 percent greater than today.

Employers cut payrolls by 160,000 and a further 200,000 workers retired or abandoned efforts to find a job, leaving the seasonally adjusted number of employed at 59.4 million, the statistics bureau said today in Tokyo. Separate figures showed industrial production rose 0.8 percent from the previous month, less than all but three of 28 forecasts in a Bloomberg survey.

The data deepen concern that Japan’s recovery from the March earthquake will be stunted by manufacturers shifting operations abroad because of gains in the yen, a deterioration in consumer confidence and prospects for higher taxes at home. The challenges add to the burden of an economy already beset by a shrinking and aging population.

“We’ve seen an acceleration in the hollowing out of industry this year with the yen’s surge and the earthquake,” said Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co. in Tokyo. “The government doesn’t have a sense of crisis about the yen and emerging economies are luring Japanese companies away.”

The yen traded at 76.74 as of 9:12 a.m. in London, about 1 percent from the post-World War II record high of 75.95 on Aug. 19. The Nikkei 225 Stock Average finished little changed at 8,700.29, compared with the peak of 38,915.87 when it closed out 1989, capping a four-year run when it soared almost 200 percent.

Prime Minister Yoshihiko Noda’s government on Sept. 27 said it will start implementing measures to cope with the yen’s gains, including subsidies for companies struggling to retain workers. Finance Minister Jun Azumi said today that Japan plans to bolster funds needed to intervene and lengthen monitoring of foreign-exchange market positions until the end of the year, from an initial plan to end the review this month.

“The yen staying around the high-70s could throw cold water on the Japanese economy’s recovery trend,” Azumi said at a press conference in Tokyo. “We will take bold actions when needed and we don’t rule out taking any necessary measures while closely monitoring speculative trading.”

Manufacturers including Panasonic Corp. have announced plans to shift operations overseas. Panasonic, one of the world’s largest consumer electronics companies, is moving the headquarters of its $57 billion procurement operation to Singapore from Osaka in the year starting April 2012, Masaaki Fujita, an executive in charge of the business, said this month.

Exports and retail sales data released this month also missed analysts forecasts, casting doubt on whether gross domestic product will rebound as much as forecast this quarter. GDP is expected to grow at a 4.6 percent annual pace in the three months through September, ending three quarters of decline, according to the average forecast of 42 economists surveyed by Japan’s government-affiliated Economic Planning Association.

The jobless rate fell to 4.3 percent in August from 4.7 percent as people left the workforce, today’s report showed. Household spending decreased 4.1 percent from a year earlier, compared with the median estimate in a Bloomberg News survey for a 2.8 percent drop.

A stagnating economy has also depressed consumer sentiment, with the nation’s Economy Watchers survey showing confidence among merchants and others who deal with consumers slipping to 47.3 in August, the first drop since March.

“I’m worried where things will go after this year, when we’ll start to see more of an impact from the strong yen and slowing growth in the U.S.,” said Noriaki Matsuoka, an economist at Daiwa Asset Management Co. in Tokyo. Reconstruction won’t be enough to fuel a “V-shaped rebound,” he said.

Japan plans to spend a total of 19 trillion yen ($247 billion) over five years for rebuilding after the magnitude-9 temblor and tsunami that devastated the northeast coast. The nation’s ruling Democratic Party of Japan this week proposed a 9.2 trillion yen temporary tax increase and selling of state assets to help pay for the effort.

In a sign that weaker global demand is affecting other Asian markets, South Korea’s industrial production also rose less than economist estimates in August, gaining 4.8 percent from a year earlier, Statistics Korea said today. Meanwhile, a gauge of Chinese manufacturing shrank for a third month in September, the longest contraction since 2009, according to the purchasing managers’ index released by HSBC Holdings Plc and Markit Economics today.

“Continuing yen strength will prompt companies to factor in a stronger yen in their business planning,” said Takahiro Sekido, a former analyst at the Bank of Japan and now a chief economist at Credit Agricole SA in Tokyo. “The biggest concern is the European debt crisis and the U.S. economy. With uncertain overseas demand,” Japan’s recovery may weaken, he said.

The International Monetary Fund predicted “severe” repercussions if Europe fails to contain its debt crisis or U.S. policy makers deadlock over a fiscal overhaul. Deepening debt woes in Europe have also put pressure on the yen’s exchange rate against its European counterpart, threatening to depress earnings at companies including Sony Corp.

To contact the reporter on this story: Aki Ito in Tokyo at aito16@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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Japan's answer to next tsunami: mini-ark - Ninemsn

Cosmo Power Co. President Shoji Tanaka crawls out from 'Noah'. (AAP)

A small Japanese company has developed a modern, miniature version of Noah's Ark in case Japan is hit by another massive earthquake and tsunami: a floating capsule that looks like a huge tennis ball.

Japan's Cosmo Power says its "Noah" shelter is made of enhanced fibreglass that can save users from disasters like the one on March 11 that devasted Japan's northern coast, leaving nearly 20,000 people dead or missing.

Company president Shoji Tanaka says the 300,000 yen ($A4000) capsule can hold four adults, and has survived many crash tests. It has a small lookout window and breathing holes on top. It can also be used as a toy house for children.

The company has already delivered two capsules and has orders for 600 more.

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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's Sharp to stop sales of Galapagos tablets - AFP

Japan's Sharp to stop sales of Galapagos tablets(AFP) – 11 hours ago 

TOKYO — Japan's Sharp Corp. said Thursday it will stop production and sales of the original editions of its "Galapagos" tablet computer, just nine months after it was launched.

The Osaka-based electronics maker said it will no longer produce its 5.5-inch and 10.8-inch screens, as Apple's iPhone and iPad continue to dominate the Japanese market.

It will, however, continue to make the 7-inch model that was launched last month for Internet and mobile phone firm eAccess, a Sharp spokeswoman said.

"This is a new and expanding market. Many new products and services have been launched. We believe (the older editions) have fulfilled the purposes that they were designed for," she said.

The company declined to discuss sales figures or performance of the products, only saying the Galapagos business will continue with the eAccess model.

"We believe the market for electronic books will continue to expand. We are continuing our business in the segment" with the 7-inch model, the Sharp spokeswoman said.

Local media said Sharp was effectively pulling out of the market, with Galapagos' sales suffering as consumers opted instead for iPhones and iPads.

Sharp launched the original editions of "Galapagos" in December in a shift, the company said, from conventional one-off sales of stand-alone products to devices that will continue to "evolve" through software updates.

The 5.5-inch screen model with a trackball allowed one-handed operation and was intended for commuters on crowded trains, while the 10.8-inch screen version accommodated a two-page magazine spread for home users.

Sharp sold the products only via mail or Internet-based orders.

But Apple's iPhone with a 3.5-inch screen and iPad with a 9.7-inch screen have dominated the Japanese market, despite aggressive efforts by Japanese and foreign manufacturers to expand their influence.

Copyright © 2011 AFP. All rights reserved. More »

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Japan's PM, toothless tiger or apex predator? - Xinhua

TOKYO, Sept. 14 (Xinhua) -- Japanese Prime Minister Yoshihiko Noda faces a tough road ahead as he battles to rescue the nation from financial turmoil and swiftly set about reconstruction initiatives in areas leveled by the March disasters.

But Noda, the third prime minister since the Democratic Party of Japan (DPJ) took power two years ago, is already coming under fire from local media and political analysts Wednesday, two weeks after he was sworn in.

The backlash has been sparked primarily for the new prime minister's largely indeterminate keynote policy speech on Tuesday - - the first he's made in the Diet -- given against a backdrop of mounting public debt and concerns as to whether his government can effectively raise enough funds to comprehensively deal with the post-March disaster devastation still conspicuously evident in regions along the Pacific coast.

VAGUE

The Japanese public, primarily, and those in political and media circles were hoping for Noda to convey his precise vision for dealing with a multitude of problems facing the nation, including those of rising social welfare costs and potential tax increases, as well as cross and intra party relationships inside and outside of the ruling DPJ.

But instead of sticking to his heartfelt "loach" analogies, which endeared him to the public and his party's legislators, Noda struck a cautious tone, perhaps to distance himself from his predecessors' overly rhetorical trumpeting of lofty policy ideals in similar instances in recent years, but whatever the reason the DPJ conservative will now have to prove he has some bite and isn't all bark.

Within Japan's bicameral system of parliament, the main opposition Liberal Democratic Party-led bloc controls the House of Councillors and Noda needs their support to pass key bills and the legislation necessary to enact them.

None more pressing than the 130 billion U.S. dollars reconstruction bill expected to be submitted to parliament in October, which according to recent editorial on the matter, has yet to be drafted to a point that it details a clear direction of how the funds will be raised, let alone put to use.

"Regarding a third supplementary budget draft to finance disaster recovery measures, he (Noda) only briefly mentioned subsidies and the planned designation of special districts where legal regulations would be eased to facilitate restoration efforts, " the Mainichi Daily News said Wednesday in an editorial on the subject.

"However, he hardly showed the direction to achieve both disaster prevention and restoration of local communities or whether his administration will promote the mass relocation of tsunami-ravaged neighborhoods to safer areas," said the Mainichi Daily News.

The editorial went on to highlight he fact that six months have already passed since the March 11 disasters and as such Noda's mantra of taking pride in and governing with a "correct mind and sincerity" must be called into question.

Although prior to the DPJ presidential election Noda eased his stance on raising taxes, it is widely known that the former finance minister is a keen proponent of hiking taxes to deal with the nation's burgeoning social welfare costs as the population continues to shrink and is becoming increasingly grey.

But yet again, Noda's most important audience, the Japanese public, were left wanting, as the prime minister's keenly awaited policy on tax and social security reforms have only been mentioned in terms of a general timeline and the specifics remain unclear. Political pundits maintain that it is this very kind of hazy politics that led to the demise of Noda's two unpopular predecessors, who both failed to convince the public they had the leadership skills to bring key policies though to fruition.

"As to a plan to reform the tax and social security systems as a package, the prime minister only showed the schedule for the government's submission of relevant bills to the next regular Diet session. He should have gone into more detail in an effort to convince the public," said the Mainichi.

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Edano Picked as Japan's New Industry Minister - Wall Street Journal

TOKYO—Japanese Prime Minister Yoshihiko Noda on Monday attempted to draw a line under a scandal that has rocked his fledgling administration, appointing popular lawmaker and former government spokesman Yukio Edano as the new industry minister after his predecessor made embarrassing remarks about the country's nuclear crisis.

Mr. Edano, 47, will succeed Yoshio Hachiro, who quit on Saturday only eight days into the job after he referred to the evacuated areas around the stricken Fukushima Daiichi nuclear plant as "a town of death" and allegedly joked about radiation with reporters.

The remarks were sharply criticized by opposition parties and were an unwelcome distraction for Mr. Noda as he attempts to focus on repairing the government's finances and moving ahead with the reconstruction of the quake-hit northeast.

Acting swiftly to try to contain the damage, Mr. Noda immediately accepted Mr. Hachiro's resignation and made a public apology on Sunday, the six-month anniversary of the devastating earthquake and tsunami that triggered the nation's worst-ever nuclear accident.

Moving on from the scandal is seen as crucial for the Noda government as ministers are set to face on Tuesday their first parliamentary session since the change of administration to discuss a supplementary budget for quake reconstruction.

Any lingering whiff of scandal could allow opposition parties to renew their criticism that the ruling Democratic Party of Japan is inexperienced and incompetent—a line they pursued against Mr. Noda's predecessor Naoto Kan—at a time when the new premier is looking to build consensus and clear legislative gridlock.

Support from the opposition-controlled upper house is seen as necessary for the government to smoothly pass the budget bill as well as legislation to fix Japan's social security system and proposed tax increases.

Mr. Hachiro's resignation seems like deja-vu for the ruling Democratic Party of Japan. Two months ago, reconstruction minister Ryu Matsumoto quit after remarks about the disaster-hit areas that were deemed offensive.

Former Chief Cabinet Secretary Edano was the public face of the government in the aftermath of the March 11 disasters and enjoyed broad public approval for his apparently tireless approach to holding regular briefings on live television. In recent public opinion polls, he was frequently mentioned as one of the most desirable candidates for the country's next prime minister.

The choice of Mr. Edano as industry minister—a portfolio that includes the country's nuclear power industry—also reflects the need for an experienced hand to deal with the task of rebuilding public trust in the government's energy policy after the Fukushima Daiichi disaster.

The government must tread a course between widespread public concern about the safety of nuclear power following the disaster and the need to restart idled reactors to prevent power shortages next year.

Write to Mitsuru Obe at mitsuru.obe@dowjones.com

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Japan's Azumi Says PM Not Responsible For Trade Min Resignation - Wall Street Journal

SEPTEMBER 10, 2011, 9:53 A.M. ET

MARSEILLE, France (Dow Jones)--Japan's finance minister came to the defense of Prime Minister Yoshihiko Noda Saturday, saying he should not be held accountable for the abrupt resignation earlier in the day of the nation's trade and industry minister over gaffes about nuclear issues.

The comment from new Finance Minister Jun Azumi followed media reports that Economy, Trade and Industry Minister Yoshio Hachiro stepped down to take responsibility ...

MARSEILLE, France (Dow Jones)--Japan's finance minister came to the defense of Prime Minister Yoshihiko Noda Saturday, saying he should not be held accountable for the abrupt resignation earlier in the day of the nation's trade and industry minister over gaffes about nuclear issues.

The comment from new Finance Minister Jun Azumi followed media reports that Economy, Trade and Industry Minister Yoshio Hachiro stepped down to take responsibility ...

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Ex-PM feared for Japan's survival in nuke crisis - The Associated Press

Ex-PM feared for Japan's survival in nuke crisis(AP) – 3 hours ago 

TOKYO (AP) — Japan's former prime minister says he feared early in the March nuclear crisis that it might become many times worse than the Chernobyl disaster and threaten the nation's survival.

Naoto Kan says he imagined "deserted scenes of Tokyo without a single man" and the need to evacuate tens of millions of people.

"It was truly a spine-chilling thought," Kan said in an interview with the Tokyo Shimbun daily published Tuesday.

Kan said those images flashed in his mind during the first week of the crisis, when information coming from the radiation-leaking Fukushima Dai-ichi plant was sketchy and he was told that its operator, Tokyo Electric Power Co., was considering pulling out its staff. TEPCO has since said that it never planned to withdraw from the plant.

Kan, who resigned last week amid criticism over his administration's handling of the disaster, said when he heard that cooling systems had failed at the nuclear plant soon after it was damaged by a March 11 tsunami, he understood the gravity of the situation.

"The power was totally lost and there was no cooling capacity. I knew what that meant. So I thought, 'This is going to be a disaster.'"

Kan said crisis management at the plant failed because the emergency plans included no scenario for a total power failure.

Authorities have since said that the cores of three of the six reactors melted down — much worse than they said initially — spewing about one-sixth the radiation emitted by the accident at Chernobyl.

After a series of hydrogen explosions, Kan said he heard from then-Trade Minister Banri Kaieda that TEPCO was considering pulling out staff from the nuclear plant.

Without staff to cool the overheated reactors, Kan said he knew the reactors and spent nuclear fuel stored in pools would "rapidly melt down and release massive amounts of radiation."

He said he summoned then-TEPCO President Masataka Shimizu for an explanation, but he "never told me anything clearly."

"Withdrawing from the plant was out of the question. If that had happened, Tokyo would have been deserted by now. It was a critical moment for Japan's survival. It could have been a disaster leaking dozens of times more radiation than Chernobyl," he said.

"Japan was facing the possibility of a collapse" at that time, he said in a separate interview published Wednesday by the Mainichi newspaper. "I was under an enormous sense of crisis."

The Fukushima complex is about 140 miles (225 kilometers) northeast of Tokyo. The greater Tokyo area has more than 30 million people.

Some 100,000 people from around the plant have been evacuated. While the amount of radiation leaking from the plant has dropped significantly, authorities say accumulated radiation in the soil and vegetation may make it difficult for residents to return to their homes for some time, perhaps years.

Copyright © 2011 The Associated Press. All rights reserved.

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Japan's Cabinet Expanded, Ex-PMs Named Ruling Party's Supreme Advisers - RTT News

(RTTNews) - Japan's new Prime Minister Yoshihiko Noda on Monday expanded his cabinet and appointed two former prime ministers as the ruling Democratic Party of Japan's (DPJ) supreme advisers as part of efforts by the current leadership to boost party unity.

Noda formed his Cabinet last Friday, installing his allies in key Cabinet posts to achieve policy goals of reconstructing a nation hit hard by twin disasters, and saving it from a protracted economic slump.

Many of the 22 Diet members, whom he appointed as senior vice ministers on Monday, belong to the other party group that did not back Noda in the party's presidential election last week, reports say.

They include lower house member Tenzo Okumura, an ally of party power broker Ichiro Ozawa, who was named as Senior Vice Minister of Education, Culture, Sports, Science and Technology.

New Senior Vice Minister of the Cabinet Office, Ikko Nakatsuka also belongs to Ozawa camp.

In another development on Monday, former premiers Yukio Hatoyama and Naoto Kan were named as DPJ's supreme advisers, Japanese media reported quoting party members.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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Japan's New Finance Minister Seeks Lower Corporate Tax -Kyodo - Wall Street Journal

SEPTEMBER 5, 2011, 8:36 A.M. ET

DOW JONES NEWSWIRES

Japan's new finance minister, Jun Azumi, said Monday he wants to carry out a corporate tax cut as earlier proposed by the government and give incentives for Japanese firms to keep operating in the country despite the recent sharp rise of the yen, Kyodo News reports.

But Azumi, who took office Friday under new Prime Minister Yoshihiko Noda, suggested the government might need to raise the tax among others provisionally in order to secure funds for reconstruction work following the earthquake and tsunami that struck in March, for which the government is set to create a third ...

DOW JONES NEWSWIRES

Japan's new finance minister, Jun Azumi, said Monday he wants to carry out a corporate tax cut as earlier proposed by the government and give incentives for Japanese firms to keep operating in the country despite the recent sharp rise of the yen, Kyodo News reports.

But Azumi, who took office Friday under new Prime Minister Yoshihiko Noda, suggested the government might need to raise the tax among others provisionally in order to secure funds for reconstruction work following the earthquake and tsunami that struck in March, for which the government is set to create a third ...

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Japan's Domestic Auto Sales Down 26% - Wall Street Journal

AUTOSSEPTEMBER 1, 2011, 6:25 A.M. ET

TOKYO—Japan's auto sales dropped 26% in August from a year earlier, as production disruptions after the massive earthquake in March were still holding up the supply of vehicles five months later.

But the industry is hoping to see a sales recovery from October as companies begin to ramp up output to make up for lost time.

The result in August, which marked the 12th consecutive monthly decline, also reflected a high basis of comparison in the year-earlier month, when ...

TOKYO—Japan's auto sales dropped 26% in August from a year earlier, as production disruptions after the massive earthquake in March were still holding up the supply of vehicles five months later.

But the industry is hoping to see a sales recovery from October as companies begin to ramp up output to make up for lost time.

The result in August, which marked the 12th consecutive monthly decline, also reflected a high basis of comparison in the year-earlier month, when ...

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Japan's lower house elects Noda new prime minister - BusinessWeek

TOKYO

Japan's lower house has elected former Finance Minister Yoshihiko Noda as the country's new prime minister.

The less powerful upper house, controlled by the opposition, still needs to vote. If it rejects Noda, the lower house will vote again, where Noda is virtually assured of winning again. The vote took place Tuesday.

Noda, seen as a fiscal conservative, will face a host of daunting problems, including the post-tsunami recovery, nuclear crisis, sluggish economy and yen's surge.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

TOKYO (AP) -- Japan's prime minister and his Cabinet resigned en masse on Tuesday ahead of a vote in parliament to install former Finance Minister Yoshihiko Noda as the country's new leader.

Noda, seen as a fiscal conservative, will face a host of daunting problems, including how to fund the recovery from Japan's devastating March 11 earthquake and tsunami, the ongoing nuclear crisis touched off by the disaster, and the rapid strengthening of the nation's currency on international markets.

Noda was elected Monday to head the ruling Democratic Party of Japan, virtually insuring that he would be named prime minister in the parliament vote expected later Tuesday. He succeeds the unpopular Naoto Kan, who quit after 15 months in office.

He must seek to unify the fractious ruling party and restore public confidence in politics amid widespread disgust over squabbling in parliament and perceived lack of leadership in the wake of the triple disaster.

Noda is a "moderate voice" in the ruling party, Sheila Smith, a senior fellow at the Council on Foreign Relations in Washington, wrote in a comment. "He has a steady temperament and a reputation for fairness in a party where loyalties have been severely tested of late."

On Monday, Noda defeated Trade Minister Banri Kaieda -- who was backed by an influential party powerbroker -- in a run-off election 215-177 among ruling party members of parliament after none of the initial five candidates won a majority in the first round.

After the vote Noda, 54, called for party members to put aside differences and "sweat together for the sake of the people."

He will become Japan's sixth prime minister in five years. The last five have each lasted about a year.

Noda supports free trade and building a stronger partnership with the United States, but given the pressing needs at home, "diplomacy is not likely to be at the top of his priority lists," Smith wrote.

Noda has angered China and South Korea for comments about convicted wartime leaders revered at the Yasukuni Shrine in Tokyo, where the souls of all Japan's war dead are enshrined. Earlier this month, he reiterated his claim that the wartime leaders had paid their debts and should no longer be seen as war criminals. He made similar comments in 2005.

Yasukuni visits by postwar politicians have often enraged Japan's neighbors, who bore the brunt of Japan's colonial aggression and are sensitive to any efforts by Japan to whitewash its past. Noda made his comments in response to a reporter's question on the Aug. 15 anniversary of Japan's World War II surrender. He and the rest of Prime Minister Naoto Kan's Cabinet chose not to visit the shrine this year.

China's official news agency warned Noda on Monday to not to ignore Beijing's "core interests" or seek to portray it as a threat to regional peace and stability. In a harshly worded editorial, Xinhua demanded Noda not visit Yasukuni and said Tokyo must recognize China's claim over Japanese-controlled islands known as Senkaku, or Diaoyutai in Chinese.

The two countries got into a spat last year when a Chinese fishing boat captain was arrested -- and later released -- by Japan after his boat sailed close to the islands.

Noda will likely be preoccupied with tackling the huge tasks at home. Nearly six months after the quake-spawned tsunami devastated Japan's northeastern coast, dozens of towns are still cleaning up and struggling to come up with reconstruction plans. The nuclear plant in Fukushima has displaced about 100,000 people, and the quake-prone country is also striving to hammer out a clear stance on the future of nuclear power generation.

Japan's economy, the world's third-largest, has been sluggish for the last 20 years and its population is aging, putting a greater tax burden on the younger generation.

As finance minister, Noda has been battling the yen's recent rise to record highs against the dollar, which hurts Japan's exporters. Earlier this month, he authorized Japan's intervention in global currency markets to try to weaken the yen.

Noda has also said Japan must rein in its huge deficit -- twice the country's gross domestic product -- and has voiced support in the past for raising the country's 5 percent sales tax, but has toned that down lately.

------

Associated Press writer Eric Talmadge contributed to this report.

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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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Japan's new leader Yoshihiko Noda to tackle post-tsunami crisis - The Independent

REUTERS

Finance Minister Noda will become Japan's next prime minister after defeating Trade Minister Banri Kaieda in the ruling party leadership run-off vote

A hawkish fiscal and foreign policy conservative who supports nuclear power will be sworn in today as Japan's sixth prime minister in five years.

Finance Minister Yoshihiko Noda, 54, faces the huge task of clearing up after the March quake and tsunami, ending the nuclear crisis in Fukushima and tackling the country’s enormous public debt.

He was elected head of the ruling Democrats (DPJ) yesterday after beating Trade Minister Banri Kaieda, in a poll that exposed the party’s growing divisions. Mr Noda will replace Naoto Kan, who resigned last week following withering criticism for his government’s response to the March 11 disaster.

The new leader yesterday he urged the party and the disaster-hit nation to “sweat together” with him as he works to bail Japan out of its worst crisis in decades.

Mr Noda became the latest Japanese politician to rile Asia this month when he denied that Japan’s wartime leaders were criminals. Quizzed by reporters on August 15, the anniversary of Japan’s surrender in World War Two, Mr Noda refused to rule out a prime ministerial visit to Yasukuni Shrine, which honours the nation’s war dead, including 14 executed Class-A war criminals.

The statements were condemned in China and South Korea, where one newspaper called them reminiscent of “ultra-rightist and militaristic elements.

Mr Noda has warned about China’s growing military clout and strongly defended Japan’s half-century military alliance with the US, which he calls “essential for Japan’s security and prosperity.” His position marks a clear break with his DPJ predecessor Yukio Hatoyama, who favoured closer links with China and a more independent defence policy.

Yesterday’s election effectively terminates the DPJ’s left-leaning programme, which began two years ago after Mr Hatoyama ended over half a century of virtual one-party rule by the conservative Liberal Democratic Party (LDP). Mr Noda opposes large-scale welfare spending and wants to raise the consumption tax to pay for reconstruction. His foreign policy pronouncements put him closer to the old LDP.

Japanese voters are hoping for stable leadership after a string of short-lived prime ministers since 2006. Mr Noda’s predecessor Naoto Kan was the first leader in five years to last more than 12 months. The bickering and infighting that characterised his last months in office recalled for many the worst moments of the discredited LDP.

The prime minister’s first task will be uniting the divided ruling party, long dominated by a faction loyal to kingpin Ichiro Ozawa, one of its key architects. Mr Ozawa backed Mr Noda’s rival Banri Kaieda, who lost 177 to 215 votes, raising the long-threatened specter of the DPJ’s disintegration. He must also tackle the record-high strength of the yen, which is forcing many manufacturers to consider moving abroad.

Mr Noda has not backed Naoto Kan’s call for a rethink of nuclear power and says the nation’s reactors must be restarted. Yesterday Greenpeace called on the new leader to delay the opening of schools in Fukushima City this week after testing found high radiation levels from the crippled Fukushima nuclear plant in a pre-school, secondary school and child care centre.

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Investors Need Clarity, Changes in Japan's Renewable-Energy Law - Bloomberg

Enlarge image The Shinjuku district skyline rises behind solar panels at the solar power station on the rooftop of the Itochu Corp. headquarters in Tokyo, Japan.

The Shinjuku district skyline rises behind solar panels at the solar power station on the rooftop of the Itochu Corp. headquarters in Tokyo, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Japanese companies may wait to invest in clean energy technology until the government determines renewable energy tariffs and a framework for deregulating the nation’s power industry, long monopolized by regional utilities.

The country’s parliament on Aug. 26 passed a clean energy bill that guarantees above-market rates for wind, solar and geothermal energy and will take effect in 10 months. The so- called feed-in tariff created a race to install solar panels when implemented in Germany and Spain.

“Though symbolically ground-breaking, there remain some unanswered questions regarding cost, surrounding infrastructure and regulation,” Naomi Fink, a Japan strategist at Jefferies Japan Ltd., said in a report on Aug. 25. on the bill.

The nuclear disaster at Tokyo Electric Power Co.’s Fukushima plant has turned public opinion against atomic energy, according to newspaper polls. The passage of the bill is one of the first steps by Japan to expand its renewable energy industry into a 10 trillion yen ($130 billion) market by 2020 from 1 trillion yen in 2009.

Under the law, the trade and industry minister will set preferential rates and periods each year for renewable energy purchases. The bill that passed doesn’t include what the rate will be when the law comes into force on July 1, 2012.

The rate for solar energy could be higher in light of a plan introduced in 2009 to buy excess power generated from sunlight. Currently, the tariff for surplus solar power generated by homes is 42 yen per kilowatt-hour, while electricity produced by businesses is 40 yen.

Even without price clarity, the industry expected to benefit is solar power.

“This law will help strengthen the competitiveness of the Japanese solar power industry and jump-start regional industries and job creation,” Sharp Corp. President Mikio Katayama said on Aug. 26 at a press conference by the Japan Photovoltaic Energy Association. He is also chairman of the association.

Analysts said one provision in the law allows regional power monopolies to skirt a requirement they buy electricity from renewable suppliers by citing concerns over smooth transmission.

The issue of access to power grids also needs to be addressed, Ali Izadi-Najafabadi, an analyst for Bloomberg New Energy Finance, said. The law doesn’t say who would bear the cost of building new transmission and distribution lines or increasing grid capacity, he said.

Passage of the legislation was a victory for Naoto Kan, Japan’s departing prime minister. He campaigned for less dependency on nuclear energy after the March 11 earthquake and tsunami crippled Tokyo Electric’s Fukushima Dai-Ichi nuclear power plant.

Japan gets about 9 percent of its electricity from low- carbon sources. Kan has called for that level to increase. Before the crisis, atomic plants supplied about 30 percent of the country’s electricity.

Sharp and another solar cell maker Kyocera Corp. (6971) are near- term beneficiaries of feed-in tariffs, said Pranab Kumar Sarmah, an analyst with Daiwa Capital Markets. Asian solar companies may start penetrating the Japanese market from 2013, he said in a report on Aug. 12.

“Unlike individual roof-top system buyers, who rely on brand awareness and after-sales service, solar-farm operators rely on performance at lowest cost,” Sarmah wrote, adding that China’s Suntech Power Holdings Co. may expand its business in Japan.

Analysts and industry officials are calling for deregulation to loosen the controls that the 10 regional power companies enjoy in each region they cover, including setting how much electricity from wind turbines is used.

“Japan’s utilities limit how much wind they allow onto the grid in order to maintain stability of power supply,” Yugo Nakamura, an analyst for New Energy Finance said. “By the time cumulative capacity of solar and wind reaches 10-13 gigawatts, the government will have to decide whether to change existing connection rules to accommodate additional clean power generation,” he said in a report Aug. 29.

Japan’s current capacity for solar and wind generation is 3.5 gigawatts and 2.4 gigawatts, respectively.

The volume of power exchange between regions is low, said Yoko Monoe, a research analyst for the Daiwa Institute of Research. She said power grids need to be upgraded so produced power can have multiple destinations.

Fink of Jefferies said Japan should ease factory site guidelines that concern solar power producers. Under the current law, 50 percent or less of factory sites may be used for production facilities and that could “push up the acquisition or lease-cost of the land,” she wrote.

As for geothermal, Japan limits the land use in national parks where about 80 percent of the nation’s geothermal resources are concentrated. The Geothermal Research Society of Japan said a thorough review of regulations is needed so that the country can develop projects of a size that is on par with other countries.

There are also concerns how much of the current push for renewable energy will last after Kan stepped down.

Yoshihiko Noda was elected head of Japan’s ruling party yesterday, paving the way for the 54-year-old finance minister to replace Kan. The DPJ used its majority in the lower house to appoint him as premier today.

“This direction won’t change” after Kan steps down, DPJ lawmaker Nobumori Otani said. “Japan has clearly shifted gears to promoting renewable energy.”

A total of 68 percent of respondents to an Asahi newspaper poll published Aug. 8 said they want Kan’s successor to continue his policy of phasing out atomic energy.

Softbank Corp. (9984) Chief Executive Officer Masayoshi Son plans to invest about 80 billion yen to build 10 solar farms. Son’s plans have conditions: he needs access to transmission networks and agreement from the 10 regional utilities to buy his electricity.

Japan’s power industry plans to develop and implement transmission management systems so utility companies can accommodate the volume of power generated from renewable sources, the Federation of Electric Power Companies of Japan said in a statement on Aug. 26 after the bill was approved.

The country is also pinning hopes on clean energy to help the recovery in the devastated areas in northern Japan after the quake and tsunami ravaged many farming and fishing towns.

It is important to combine reconstruction efforts with regional energy management, according to Kazuhiro Ueta, a professor of environmental economics at Kyoto University. “Renewable energy utilizes regional resources. The more you use it, the less you need to buy fossil fuel,” Ueta said.

The feed-in tariffs will need tuning along the way and Japan should learn lessons from other countries, Nakamura said. “The purpose of the law is not to fix tariffs at a high level and produce expensive power,” he said. “The goal is to bring down the total costs of clean energy.”

To contact the reporter on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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ANZ in Talks to Acquire Japan's Aozora Bank - Wall Street Journal

Seeking to take another step in its Asian expansion, Australia and New Zealand Banking Group is in early talks with Aozora Bank Ltd. about a possible acquisition of the midsize Japanese lender, said people familiar with the matter.

Aozora, majority-owned by U.S. investment firm Cerberus Capital Management LP, has a market value of about US$4 billion, according to data provider Capital IQ.

Melbourne-based ANZ is looking to grow in Asia at a time when the Australian economy is starting to show signs of strain and its banks are contending with subdued credit growth at home. ANZ aims to get 25% ...

Seeking to take another step in its Asian expansion, Australia and New Zealand Banking Group is in early talks with Aozora Bank Ltd. about a possible acquisition of the midsize Japanese lender, said people familiar with the matter.

Aozora, majority-owned by U.S. investment firm Cerberus Capital Management LP, has a market value of about US$4 billion, according to data provider Capital IQ.

Melbourne-based ANZ is looking to grow in Asia at a time when the Australian economy is starting to show signs of strain and its banks are contending with subdued credit growth at home. ANZ aims to get 25% ...

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Japan's new leader Noda sparks wariness in China - Houston Chronicle

TOKYO (AP) — Yoshihiko Noda was elected Tuesday as Japan's sixth prime minister in five years, facing such a staggering array of domestic problems that the last thing he needs is a sour relationship with China, his country's biggest trading partner.

Yet Noda is being viewed warily in China, whose media are playing up his comments supporting a controversial Tokyo shrine honoring World War II dead, including war criminals, and that Beijing's military buildup is creating regional unease.

"'Hawk' to become Japan's new prime minister," said the nationalistic Global Times.

Regarded at home as a smart but bland fiscal conservative from humble roots, Noda replaces the unpopular Naoto Kan, who quit amid widespread criticism over his administration's handling of the tsunami and nuclear disasters. A former finance minister, Noda will likely focus on those immense challenges, as well as reviving the stagnant economy and reducing Japan's massive national debt.

But in China, the media is portraying Noda as a right-wing nationalist and has predicted a rocky period for China-Japan relations. Even more liberal newspapers highlighted his comments, first made in 2005 and reiterated earlier this month, that convicted Japanese wartime leaders enshrined at Tokyo's Yasukuni Shrine should no longer be seen as criminals.

Yasukuni visits by postwar politicians have often enraged Japan's neighbors, who bore the brunt of Japan's colonial aggression and see the shrine as a glorification of militarism and a symbol of Tokyo's failure to fully atone for its past imperialism. When former Prime Minister Junichiro Koizumi used to visit the shrine it triggered rage and a five-year chill in relations with China and South Korea.

Japan, long used to being the region's dominant power, has been unsettled by China's fast-accelerating power over the past decade, even as the countries — now the world's second- and third-largest economies — built thriving commercial relations. In this rivalry, Beijing has often appeared to test Tokyo's mettle, at times taking advantage of political transitions in Japan.

On Monday, after Noda was elected head of the ruling Democratic party, setting up Tuesday's parliamentary vote, China's official news agency warned him not to ignore Beijing's "core interests." In a harshly worded editorial, Xinhua demanded Noda not visit Yasukuni and said Tokyo must recognize China's claim over Japanese-controlled islands in the East China Sea known as Senkaku, or Diaoyutai in Chinese.

Ties between the countries deteriorated sharply last year when a Chinese fishing boat captain was arrested — and later released — by Japan after his boat collided with a Japanese patrol boat in disputed waters near the islands.

The territorial dispute could flare again. Last week, two Chinese fisheries patrol boats sailed into contested waters near the islands, drawing a rebuke from Tokyo.

Noda, 54, and the rest of Kan's Cabinet chose not to visit Yasukuni this year, and analysts in Japan believe Noda is unlikely to do so as prime minister, or make any strident statements about war criminals or Japan's wartime past.

"There's no way he is going to take some action on this," said Naoto Nonaka, a political science professor at Gakushuin University in Tokyo. "There's too much else to do."

Koichi Nakano, political science professor at Sophia University in Tokyo, said Noda is likely to play down his past comments.

"A lot of people learned a lesson from the Koizumi 'ice age,'" Nakano said. "He has no interest in complicating his situation by creating an acrimonious atomsphere when he needs to cooperate with Asian nations to get out of Japan's economic quagmire."

China has overtaken the U.S. as Japan's biggest trading partner, doing $176 billion worth of trade for the first half of the year. As China's middle class grows, the country's burgeoning market holds vast potential for Japanese exporters. Japan also is striving to draw more Chinese tourists.

Liang Yunxiang, a Japan expert at Peking University, said historical and territorial issues have been perennial sore spots, and so personalities and attitudes of leaders matter in whether these problems affect the broader relationship.

"Yoshihiko Noda has not been friendly to China, so it's not a good start," he said.

As is standard practice, Chinese Premier Wen Jiabao sent a formal telegram congratulating Noda and urging that both sides work together to promote cooperation.

The mass circulation Asashi newspaper in Japan noted Tuesday that his past comments "that the A-class war criminals are not legally guilty of war crimes is causing some waves as he is taking the helm."

As prime minister, "Noda has to be more careful in how he addresses Japan shared history with Asia," said Jeff Kingston, director of Asian studies at Temple University's Tokyo campus.

"I don't think that this is a huge blunder that's going to undermine ties but I think that he needs to be very careful from now on," he said. "Clearly Japan's economic future is closely tied to China's rise and it's not helpful for the positive economic relationship to held hostage to history."

___

Associated Press writers Eric Talmadge in Tokyo and Charles Hutzler in Beijing contributed to this report.

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Australia's ANZ in early talks to buy Japan's Aozora Bank-sources - Reuters

SYDNEY | Tue Aug 30, 2011 4:10am EDT

SYDNEY Aug 30 (Reuters) - Australia and New Zealand Banking Group is in early stage talks to buy Japan's Aozora Bank which has a market value of $4.2 billion, two sources familiar with the deal said on Tuesday, as it seeks to expand in Asia.

ANZ is eyeing Aozora for its deposit base and also to use it as a springboard to tap trade flows in Japan, which is Australia's second-largest trading partner after China.

"The talks are at an embryonic stage," one source said, adding the deal should satisfy all the main parameters such as pricing and potential for return on investments.

An ANZ spokesman declined comment on any deal but said the bank was always looking at opportunities to advance its Asian strategy, which calls for its Asian businesses to account for up to 30 percent of group profit by 2017.

On Monday the Australian Financial Review said ANZ was looking at buying either Japan's Tokyo Star Bank or Aozora Bank.

Aozora Bank is majority-owned by private equity firm Cerberus Capital Management .

Aozora shares have risen 14 percent over the past two days on expectations of an ANZ bid.

ANZ is looking at Asia for growth and has invested nearly $6 billion in capital in the region to grow its institutional, trading desks and wealth advisory arm.

It bought some Asian assets of RBS in 2009 for $550 million but its recent efforts to buy in Asia have been stymied. It lost out on a bid to gain control of Korea Exchange Bank for nearly $4 billion last year.

ANZ shares ended 0.15 percent lower at A$20.18 on Tuesday.

(Reporting by Narayanan Somasundaram; Editing by Mark Bendeich)

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