Countermeasures for yen revealed - The Japan Times

The government outlined a set of strategies Monday for responding to the soaring yen, including financial assistance for struggling exporters.

The measures, presented at a meeting of economic ministers and Bank of Japan officials, encourage Japanese companies to sell yen for dollars and other major currencies to accumulate enough funds to make external investments.

The measures also offer incentives to prevent them from shifting production and other facilities abroad, which would hollow out the export-dependent economy.

The yen's extended climb is hurting exporters, who have seen their competitiveness eroded by cheaper exports from rivals in South Korea and other emerging economies. This has sparked talk of a hollowing out of Japanese industry as firms move to countries with cheaper labor costs to offset damage from the strong yen.

"We will continue to closely watch (currency) market developments and take decisive steps when they prove necessary," the government document said, adding it expects the BOJ to collaborate with it and make "appropriate and decisive policy responses."

The move comes as Prime Minister Naoto Kan prepares to step down and after the Democratic Party of Japan elected Finance Minister Yoshihiko Noda as his successor. The policy priorities are likely to be reflected in the budgets to be formulated by the next administration.

Financing aid for small and medium-size exporters, as well as corporate incentives to keep research, development and production facilities in Japan, are the major goals of the plan. Another is promoting tourism, which has plunged since March 11.

In a related move, the Finance Ministry unveiled last week an unprecedented plan to provide $100 billion in cheap loans from foreign-exchange reserves and encourage Japanese firms to accelerate mergers and acquisitions abroad, as well as investments in securing overseas energy resources by making the best use of the yen's strength.

The BOJ has come under growing pressure from the government to ease monetary conditions further. The central bank is scheduled to start a two-day policy meeting Sept. 6.

BOJ Deputy Gov. Kiyohiko Nishimura, who attended Monday's economic ministers meeting, was quoted by economic and fiscal policy minister Kaoru Yosano as saying the BOJ will closely communicate with the government and make "decisive policy responses."

Earlier in August, the BOJ decided to expand its asset-purchasing fund by ¥5 trillion to ¥15 trillion and also boosted the supply of six-month funds to financial institutions under its fixed-rate operations by ¥5 trillion to ¥15 trillion, while keeping the provision of ¥20 trillion in three-month funds.

One option for the BOJ is to expand the fund for buying government bonds with longer maturities, which would be an attempt to lower long-term interest rates and effectively help Japan raise funds to finance post-March 11 reconstruction.

Yosano expressed his support for the position of the BOJ, which has warned that direct purchases of JGBs will only hurt confidence in Japan's fiscal and monetary policies and possibly lead to catastrophic inflation.

"The government should never make such a reckless request for the BOJ to underwrite its bonds," Yosano told reporters.

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Terrifying moments before tsunami revealed

The Yomiuri Shimbun

ISHINOMAKI, Miyagi--As the tsunami waters rose around him, one boy desperately stayed afloat by clinging to his evacuation helmet. A refrigerator with no door floated past so he climbed inside, and survived by staying in his "lifeboat" until the danger eventually passed.

This amazing tale of survival emerged during interviews with students and teachers of Okawa Primary School in Ishinomaki, which was battered by the March 11 tsunami. Seventy-four students, nearly 70 percent of the school roll, died in the tsunami or remain missing.

The interviews, which were conducted from March 25 to May 26, were compiled into a report that was released Monday.

The local board of education interviewed 28 people, including a senior male teacher and four students who survived being engulfed by the tsunami. The interviews revealed there was considerable confusion about where to evacuate in the minutes before the tsunami pounded the area.

According to the report, after the Great East Japan Earthquake occurred at 2:46 p.m. on March 11, students and teachers assembled in the school playground for about 40 minutes before evacuating along a route toward the Kitakamigawa river. They walked in lines, with sixth-grade students at the front followed by younger students.

As they walked to an area of higher ground called "sankaku chitai" at the foot of Shin-Kitakami Ohashi bridge that traverses the river, the tsunami suddenly surged toward them.

"When I saw the tsunami approaching, I immediately turned around and ran in the opposite direction toward the hills [behind the school]," a fifth-grade boy said during an interview.

Another fifth-grade boy said: "The younger students [at the back of the line] looked puzzled, and they didn't understand why the older students were running back past them."

As the water swamped the area, many students drowned or were swept away. The boy who managed to hold on to the helmet he was wearing was one of the lucky ones.

After he clambered into the refrigerator, the water pushed him toward the hill behind the school, where he saw a classmate who had become stuck in the ground as he tried to flee.

"I grabbed a branch with my right hand to support myself, and then used my left hand, which hurt because I had a broken bone, to scoop some of the dirt off my friend," he said. His classmate managed to dig himself out.

The board also spoke to 20 students who were picked up by relatives by car after the quake.

A fourth-grade student said when the car they were in was driving past sankaku chitai, a city employee there told them to flee to higher ground.

Some interviewees said teachers and locals were split over where the best evacuation site was.

"The vice principal said we'd better run up the hills," one recalled. Another said locals who had evacuated to the school "said the tsunami would never come this far, so they wanted to go to sankaku chitai."

One interviewee said the discussion on where to evacuate developed into a heated argument.

The male teacher told the board that the school and residents eventually decided to evacuate to sankaku chitai because it was on higher ground.

Meanwhile, it has been revealed that the board discarded handwritten notes of the interviews after compiling the report.

Notes of all the interviews were initially jotted down on paper, but after the content was included in the report, all the notes were thrown out, according to the board.

The two city employees who spoke with the teacher for 20 to 30 minutes recorded his comments on one or two A4 sheets.

"We included all the notes in the report, but thinking back now, perhaps we should've kept them," a board official said.

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The Cable: Biden's Asia itinerary revealed - Foreign Policy

Vice President Joe Biden heads to Northeast Asia today to meet with the man who could be the next president of China, take in some Mongolian culture, and then pay his respects to Japan, which is still recovering from the tsunami that hit the country in March.

Biden will spend four days in China, one day in Mongolia, and two days in Japan -- his first trip to Asia as vice president but his umpteenth visit as a U.S. political leader. He first traveled to China in 1979 as part of the first congressional delegation to visit after the United States and China normalized relations. The highlight of the visit will be his meeting with Chinese Vice President Xi Jinping, who is expected to replace Hu Jintao as president sometime next year.

"One of the primary purposes of the trip is to get to know China's future leadership, to build a relationship with Vice President Xi, and to discuss with him and other Chinese leaders the full breadth of issues in the U.S.-China relationship," said Tony Blinken, Biden's national security advisor, in a conference call with reporters. "Simply put, we're investing in the future of the U.S.-China relationship."

On Thursday, Biden will have two meetings with Xi in Beijing and a meeting with Chinese Premier Wen Jiabao, followed by a formal banquet hosted by Xi in the evening. On Friday, Biden will have a roundtable discussion with U.S. and Chinese business leaders, followed by another meeting with Wen and a meeting with Hu.

Saturday, Biden will visit the U.S. embassy in Beijing to meet with the staff and spend some time with the new U.S. Ambassador Gary Locke. He will then head off for the city of Chengdu, in Sichuan province, becoming the first U.S. political leader to visit the city. That night, Biden and Xi will visit a high school in Dujiangyan City that was rebuilt following the 2008 earthquake.

Sichuan province, which borders Tibet, is where two Tibetan monks set themselves on fire in recent days, to protest the Chinese government's policy of suppressing Tibetan culture and "reeducating" Tibetan spiritual leaders.

"I think the vice president can be expected to reinforce the message to the Chinese that there is great value in their renewing their dialogue with the representatives of the Dalai Lama, with the goal of peacefully resolving differences," said NSC Senior Director Danny Russel, who didn't comment directly on the recent protests.

One subject that Biden will be trying to avoid in China is the matter of U.S. arms sales to Taiwan. Reports yesterday said that a Pentagon team traveled to Taiwan to deliver the message that the United States will not be selling the Taipei the new F-16 C/D model fighter planes it wants, but would be willing to sell upgrades for its older A/B models.

"I think it's important to make clear that on the issue of Taiwan that the vice president has no plans to raise the Taiwan issue, certainly not arms sales during his trip.  He is not going to China to address that issue," Russel said.

Of course, it's extremely likely that the Chinese will raise it, and will want to know the details of Secretary of State Hillary Clinton's promise to Sen. John Cornyn (R-TX) that the administration would announce its decision on Taiwan arms sales by Oct. 1.

On Aug. 22, Biden goes to Mongolia, becoming the first No. 2 to visit there since Vice President Henry Wallace in 1944. Mongolian President Tsakhia Elbegdorj scored a visit to the Oval Office in June. Biden will meet with him, as well as Prime Minister Sukhbaatar Batbold. Then, the Mongolians will put on a cultural display that will include archery, wrestling, and horse racing.

Biden leaves for Tokyo that night and will spend two days in Japan, including a visit to the earthquake damaged city of Sendai. He will meet with the embattled Prime Minister Naoto Kan and visit with American troops.

The U.S. debt crisis will be one topic that will be on all Asian leaders' minds during Biden's trip. China and Japan are the top two holders of U.S. government debt, respectively. Lael Brainard, the Treasury Department's undersecretary for international affairs and the wife of Assistant Secretary of State for East Asia Kurt Campbell, outlined Biden's message to Asia on America's debt.

"The vice president will be in a good position to talk about the very strong deficit reduction package that we concluded here recently. Obviously, the United States has the capacity, the will, and the commitment to tackle our major fiscal and economic challenges," she said.

But Biden will also carry the message that China has to stop depending on its trade imbalance with the United States to feed its ever growing economy.

"I think as we move forward on addressing our fiscal challenges, Chinese policy makers know that they can no longer count on the U.S. consumer to provide that demand to the global economy," she said.

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