Ex-Japan Official: Euro Pessimism Overdone - Wall Street Journal

TOKYO—The euro is undervalued against both the dollar and yen, said a former top Japanese currency official, arguing that speculation about a Greek default or German abandonment of the currency has become overly pessimistic, given European officials' determination to retain the euro zone.

"I believe the euro will recuperate its value as European officials muddle through the debt woes," said Makoto Utsumi, who was vice finance minister for international affairs between 1989 and 1991.

Jonathan Ernst/Reuters Former Japanese currency official Makoto Utsumi, right, with Bank of France Governor Christian Noyer in Washington last month

Known to be a close friend of Bank of France Governor Christian Noyer, a member of the European Central Bank's board of governors, Mr. Utsumi said in a recent interview that it was unlikely Germany or Greece would opt out of the common currency. "Staying on the team is in their national interest, and officials there are very much aware of that," he said.

Jean-Claude Juncker, head of the Eurogroup of regional finance ministers, on Tuesday said "everything will be done" to avoid a Greek default, though the group decided to postpone its decision regarding a bailout.

Mr. Utsumi, now president and chief executive officer of Japan Credit Rating Agency, estimated that if Germany were to return to its former currency, the mark, its value would rise by 30%, hitting the nation's exporters hard. Athens would have the opposite problem if it gave up the euro: The value of its currency would fall sharply, making it impossible to clear its debts, mostly denominated in euros.

The former official said Tokyo, seeking to help calm the region's debt storm, will likely buy more bonds issued by the European bailout fund. Japan has purchased 20% of the bonds issued in the European Financial Stability Facility's three offerings this year.

As of 0930GMT, the euro was at $1.3176 and ¥100.99, from $1.3175 and ¥100.96 in New York Monday. Mr. Utsumi declined to make specific currency forecasts, but suggested it may take some more time before the euro starts its recovery as he said "there is no clear-cut solutions to the debt problem."

Mr. Utsumi also said the yen is overvalued, but that because currency markets are driven mainly by factors in the U.S. and Europe there isn't much Japanese authorities can do to stem its rise. He said Japan should focus on maximizing the benefits of having a strong currency, such as by buying overseas resources.

Write to Takashi Mochizuki at takashi.mochizuki@dowjones.com

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It's Official: Fukushima Reactors 'Essentially Stable' (The Atlantic Wire)

September 11th not only marked the 10th anniversary of a devastating day for our country, but also the 6 month mark of the earthquake that hit Japan last March. The country has made a lot of progress in that half year. The nuclear reactors, which had a meltdown following the shake, are "essentially stable," according to the International Atomic Energy Agency, reports Reuters. "The situation at the site remained very serious for many months. The agency's assessment now is that the reactors are essentially stable," IAEA director Yukiya Amano said. The plant plans on using a cold-shutdown method to bring the fuel rod temperatures down.

Related: After Fukushima: Fossil Fuel Picks Up Slack in Japan

The development comes as the rest of the country has made significant progress. Today's In Focus gallery at The Atlantic details the clean-up with 12 before and after photos. While the change is inspiring, the photos show the extent of the damage, some of which will take longer to amend. 

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Official calls for better sentiments between Chinese, Japanese people - Xinhua

BEIJING, Aug. 21 (Xinhua) -- Wang Chen, director of China's State Council Information Office, on Sunday called for more efforts to improve the sentiments between the Chinese and Japanese people.

"People-to-people exchanges are heart-to-heart exchanges, which is playing an increasingly important role in the bilateral ties between China and Japan," said the official, adding that those are the best ways to deepening understanding, trust and good feelings between nations.

Wang made the remarks at the 7th annual Beijing-Tokyo Forum held in Beijing to promote understanding and strengthen ties between the two nations.

China and Japan have witnessed great leaps of people-to-people exchanges over the past decades since the normalization of diplomatic relations between the two countries in 1972, Wang said.

A total of 5.7 million Chinese and Japanese people visited each other's country in the year of 2010, compared to some 10,000 when the relationship was normalized, according to the official.

"We need to make more efforts to increase dialogue and exchange between the people of the two countries from all walks of life, to make more people become staunch supporters and enthusiastic participants in advancing the China-Japan relations," said the official.

Days before Sunday's forum, a public opinion poll on Chinese and Japanese's views of each other's country was released, showing that 28.6 percent of grassroots Chinese citizens have positive views on Japan, while 20.8 percent of Japanese have positive views on China.

The forum gathered some 300 participants from various circles in the two countries and they conducted dialogues on issues covering politics, economy, media and security.

The forum, held annually since 2005, is jointly organized by China's biggest English newspaper, China Daily, and Genron NPO, a Japanese think tank.

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Japanese Official: Yen Doesn't Reflect Economic Fundamentals - Wall Street Journal

MARKETSAUGUST 19, 2011, 9:11 A.M. ET

TOKYO —Japan's top currency-policy bureaucrat complained Friday about global investors treating the yen as a "flight-to-safety currency" during times of global economic distress.

"We don't think recent yen moves really reflect economic fundamentals," Takehiko Nakao, vice finance minister for international affairs, told Dow Jones Newswires in an interview Friday. There is an "element of speculation" behind it, he added.

Even so, the veteran finance official, who took over the powerful job steering Japan's global financial policies around two weeks ago, said the government has no plans to start a sustained intervention campaign to steer the yen to specific levels but ...

TOKYO —Japan's top currency-policy bureaucrat complained Friday about global investors treating the yen as a "flight-to-safety currency" during times of global economic distress.

"We don't think recent yen moves really reflect economic fundamentals," Takehiko Nakao, vice finance minister for international affairs, told Dow Jones Newswires in an interview Friday. There is an "element of speculation" behind it, he added.

Even so, the veteran finance official, who took over the powerful job steering Japan's global financial policies around two weeks ago, said the government has no plans to start a sustained intervention campaign to steer the yen to specific levels but ...

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Tomari reactor to get official nod to stay online

SAPPORO — Hokkaido Gov. Harumi Takahashi was expected to announce Tuesday night her approval for resuming commercial operations of the Tomari nuclear plant's reactor 3, which has been running full tilt since March 7 but technically only in test mode.

The move would clear the way for the Ministry of Economy, Trade and Industry to issue a certificate for the completion of the reactor's regular inspection, which has continued for an unusually long period of five months amid the nuclear crisis in Fukushima. Tomari's reactor 3 would be the first to resume commercial operations since the crisis erupted.

Reactor 3 is already generating at full capacity under what is known as an "adjustment operation" in the final phase of the check, so there will be effectively no difference in terms of electricity output when it shifts to commercial operations.

As for the government-mandated stress tests to be carried out on all reactors nationwide, the unit will only have to undergo the second part — a computer simulation.

The Hokkaido government has taken a cautious stance about giving the go-ahead to commercial operations, apparently because no other reactors in the country have restarted since the Fukushima plant's triple meltdowns after March 11, heightening public concerns about the safety of nuclear power.

The Tomari reactor 3 began undergoing a regular inspection in January and started the adjustment operation on March 7.

The checks were supposed to end early April, but Hokkaido Electric Power Co. only applied for the final test of the inspection process recently because it had to enhance its safety measures in response to the nuclear crisis.

The final test ended last Wednesday, with the Nuclear and Industrial Safety Agency, which is under the wing of the Ministry of Economy, Trade and Industry, confirming that there are no problems with the reactor.

But METI chief Banri Kaieda, prompted by complaints from Takahashi to consider local sentiment, delayed issuing the certificate for the completion of the regular inspection until she consulted with local governments.

The Fukushima meltdown crisis prompted the government to require that all reactors undergo the two-stage computer simulation stress tests to gauge their ability to survive a severe accident.

But the government said Tomari's reactor 3 only needs the second part of the test.

Utilities must ensure that reactors that have been halted for regular checks pass the first-stage of the stress test. The second-stage test will be later conducted on all reactors, including those now in operation.

Kaieda told Takahashi on Aug. 9 that reactor 3 only needed the second test.

Tokyo Electric Power Co. is close to attaining its goal set for the end of August of increasing supply capacity to 56.10 million kw by boosting thermal power generation to make up for shortages amid its nuclear crisis, officials said Tuesday.

But the utility, which serves the Kanto region, where power demand reached its highest level this summer at 48.91 million kw on Aug. 10, is keeping an eye out for any unexpected trouble in light of the turbine failure that caused Kansai Electric Power Co.'s 400,000-kw thermal plant to shut down Sunday, they said.

Tepco, which must cope without its two nuclear plants in Fukushima Prefecture, has meanwhile managed to restore its tsunami-crippled thermal plant in the same prefecture.

It has also installed two of five extra high-output gas turbine generators it plans to run by the end of August, and has reactivated two generators at a plant due to be decommissioned in Yokosuka, Kanagawa Prefecture.

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