Tokyo (CNN) - Imagine your paycheck gets slashed by 99.4%.
That would make me, and pretty much everyone I know, weep with sadness.
Well, that’s essentially what Toyota says has happened to its net income for the period between April and June this year - the first full quarter after the catastrophic earthquake and tsunami in Japan on March 11.
Tokyo (CNN) – A restaurant in Tokyo is crowded with customers, but on the menu isn’t raw fish, but raw meat – chicken, pork, beef and even horse meat.
About half the customers at “Niku Sushi” (Japanese for “raw meat”) are women like Aya Kanazawa, who comes three times a week and proudly calls herself “a carnivore girl.” It’s not just her culinary tastes she’s talking about. In an odd way, the battle between meat and fish parallels the battle of the sexes and Japan’s moribund economy.
Japan's so-called “carnivore girls” are young, aggressive women. They call the shots in love, act independently and – like Kanazawa – are proud of it.
Girls like Kanazawa are in contrast to Japan’s so-called "herbivore boys," the generation of Japanese youths who are less interested in sex. Borne out of 20 years of national economic stagnation, herbivore boys eschew traditional macho notions of masculinity and employment, choosing not to fulfill the salarimen role of their fathers.
For a country with one of the world’s lowest birthrates – and one of the fastest aging populations – the "herbivore boys" embody the nation’s societal fears.
I have a harsh symbol of Japan’s political cynicism on my desk. It’s a coffee cup, with the caricatures of the prime ministers on it. What makes it so cynical is that there’s a space to add four more faces.
When I bought it from the vendor, she explained that the space is there so the company can easily paint on the next prime minister’s face. “Because as we know,” she grimaced, “they never stick around that long.”
Her words bluntly state Japan’s problem with the revolving door at its top political job.
Naoto Kan became prime minister in June last year. If he stays on the job for another week, he’ll be the longest-serving leader of Japan in recent years.
It’s hardly an accomplishment, though, considering that his four predecessors were all on the job a year or less.
Tokyo, Japan (CNN) - Japan's economy, sputtering since the March 11 earthquake, tsunami and nuclear disaster, has fallen into recession, according to government figures released Thursday.
The country's gross domestic product fell by an annualized rate of 3.7% in the first quarter of the calendar year, according to the government, a much steeper fall than Japanese economists had predicted.
Comparing the first quarter to the previous year, according to Japan's cabinet office, the GDP fell 0.9%. In the fourth quarter of 2010, the GDP fell 0.8% as compared to the same quarter of the previous year. Thursday's GDP figures show a second consecutive quarterly drop, which fits the economic definition of a recession.
Industrial output in March was down 15.3%, the worst monthly drop in the country's history.
Businesses in the region affected by the tsunami were hit hard, with 10,000 of 24,000 businesses affected and 600 expected to close.
The figures, which did not include data from tourism or trade, underscore the fact that the natural disaster of March has become an economic disaster.
Tokyo, Japan (CNN) – It’s a tried and true method of gaining attention in the business world: try something visibly different. For Japanese mobile phone company Softbank, “different” is in the form of 33-year-old Dante Carver.
Carver is a member of the quirky Japanese family that fronts the ad campaign for Softbank. If you haven’t guessed by his name yet, he’s not Japanese. He’s an African-American from New York. Granted, he’s not the only non-Japanese member of the advertising campaign: there’s also the dog, who is the father of the family.
The ad campaign is certainly nonsensical. But it has been a popular and successful ad campaign, running for four years on Japanese television.
The ad propelled Carver into an unusual place in the heart of the Japanese public: a blend of fascination and adulation. CM Databank – a Japanese marketing research company who tracks the country’s top television actors – ranked Carver as Japan’s number one television commercial star. It’s a remarkable achievement in and of itself. That Carver is a black American propels it to “what-the?” status.
Carver never expected to find success in Japan as an actor. He followed a traditional US path: he graduated from Virginia Commonwealth University with an international business degree and went to work for an insurance company. But when his job ended, Carver saw a chance: pursue a childhood dream to try acting, a “now or never” moment. That he chose Japan to follow that dream drew criticism from friends and family who thought he was “crazy.”
“I had people around me that said you can’t do it in Japan because you can’t speak the language, you’re obviously not Japanese, it’s impossible. But my personality is very much the opposite. If someone says it can’t be done, I’m going to at least try it. So I tried it and I’ve been lucky, honestly,” says Carver.
Carver’s success is a mixture of luck and timing, says Billboard reporter Rob Schwartz in Tokyo. Schwartz says Jero, an African-American, quarter-Japanese singer, broke barriers for other black Americans in Japanese pop culture. Jero found success three years ago by singing a blend of traditional Japanese enka and modern hip hop.
“Even though it’s a very inward looking country, they are drawn to things from outside to spice up life, to add some variety. Even if it’s put into a little box as a foreign thing, they’re still drawn to that,” says Schwartz. “Does it signal that Japan is changing? I think it does. I think that Carver is an African American signals that Japan is changing. How much it’s changing is an open question. But I don’t think it would have been possible 15 years ago, much less 35 years ago.”
The cultural barriers have turned into a boon for Carver. “If you’re willing to stay open, the differences can become very useful, very positive, where at first, it can seem very harsh, very negative,” says Carver. “So it’s worked out pretty well just from me not being Japanese national.”
Not that being different hasn’t been without its challenges, says Carver, who believes being black in America is as similar as being black in Japan. “A stereotype I had here when I first came is, oh, you drink grape juice, play basketball and listen to rap music. It’s like, wow, it’s like I’m back in Alabama. Arigato.”
(CNN) – China can publicly deny that it has halted exports of rare earth. But Shigeo Nakamura knows what he is seeing: no rare earth has come into his company from his Chinese suppliers.
“Nothing, nothing at this moment. Nothing,” said Nakamura, president of Advanced Material Japan Corporation, a Tokyo-based rare earth and metal trading house.
Nakamura said his company has a year’s supply stockpiled, but he is worried.
“This,” he said, pointing to a tiny, two millimeter cylinder, “is a micro-motor from a mobile phone. If China stops supply of the raw material, you will not use the mobile phone. You will not see the TV. And you will not see any refrigerator.”
Rare earths are minerals used in small amounts on virtually every electronic item for sale around the world.
China has 30 percent of the world’s reserve of rare earths, but mines it cheaply and effectively. More than 90 percent of the world’s available supply is currently mined in China.
That control became clear last month to Japanese rare earth importers, exporters and the government.
In the wake of a collision at sea between a Chinese fishing vessel and the Japan coast guard in September, multiple Japanese rare earth importers tell CNN that China dramatically slowed exports of rare earth.
China denies it stopped exports in retaliation.
But Beijing has been curbing international exports for the last few years amid concerns about supply and growing demand.
Whatever the reason behind the slowdown in rare earth exports, Mizuho Research Institute senior economist Jun Inoue says it highlights what Japanese economists call “China risk.”
That risk involves the world relying too heavily on China, a country whose communist government can rapidly affect the global economy.
“The world is heavily relying on China not only in finance and trade, but also natural resources,” said Inoue. “In the market economy, each economic entity makes decisions by individual will. But under the controlled market economy (like China), the government has plans and targets. There is a risk that such national plans and targets influence the world economy.”
China on Wednesday denied that it has halted export of rare earth materials amid news reports that Beijing started blocking shipments of the crucial minerals to the United States and Europe following similar measures against Japan.
"China will continue to provide rare earth to the rest of the world," the ministry of commerce said in a statement faxed to CNN. "At the same time, to protect exhaustible resources and achieve sustainable development, China will also continue to implement restrictive measures on the mining, production and export of rare earth."
Nakamura said his company has a year of rare earth stockpile. He remains optimistic that Beijing will loosen exports, saying China stands to lose too much money if developed economies like Japan and the U.S. mine for rare earth elsewhere.
“Maybe two weeks” before Chinese exports resume, said Nakamura. “Two weeks, I hope.”
Tokyo, Japan – Akihisa Shirota has piles of manga in his office. He likes to take math drills with the students. And he dismisses the “ivory tower” types as living too “in the box.”
Not your average junior high school principal in any country, but especially in Japan, a country renowned for its rigorous and rudimentary educational system.
Look at Shirota’s resume and you notice what’s not there: the words "teacher" or "educator." It’s instead dotted with high tech and publishing companies he’s headed as the president or manager.
Shirota’s lack of experience in education is exactly what made him attractive to Wada Junior High School.
“Principals are people who became teachers right after graduating from college,” said Shirota. As a former Japan Inc. man, Shirota treats his students more like his employees. He knows the name and test score of every single student in the school, all 400 of them.
The day at Wada Junior High begins with a math drill known here as “brain training.” Stealing from the theory that puzzles may prevent dementia among the elderly, Shirota believes drilling with puzzles and problems everyday under time pressure will sharpen young minds.
Later in the day, the students head to a seminar headed by a company. The class teaches business manners, like how to politely greet clients and behave at a board meeting.
Then at 7pm, night school begins. Cram schools, as these evening classes are called, are common in private schools, but not in public ones. Shirota says the purpose is the same: to boost test scores for school entrance exams.
Critics have varied from calling Wada Jr. High too rigorous or too lax.
Koya Nakamura, 15, says he enjoys the school, even if his school day ends at 9pm. Other students call their principal “different” but “cool.”
Call him what you like, says Shirota, both good and bad. But his philosophy has paid off in higher test scores, he says. At the core of this principal’s beliefs is this: Japan’s companies must adapt to the times to compete in an ever-changing global environment. Schools should be no exception.
I never cared much about the currency markets before moving out of the U.S.
Euro, yen, dollar… those words zoomed by on the bottom of the business news tickers, the numbers behind them always fluctuating up and down, seemingly meaningless in my single currency world.
Then I moved to Japan, and like many American expatriates, I got a crash course on the impact of the currency market on my wallet.
When I moved here almost three years ago, the Japanese yen was hovering around 120, 110 versus the U.S. dollar. Now mid-August 2010, the yen is smack dab in the 80’s. The cost of living for me, and many people who are paid in dollars but live in a yen world, has gone up percentage wise double digits, through no fault of our own except for a weakening dollar.
Michigan native Paula Shioi remembers the days of the 300 yen versus the dollar, when she was in high school a few decades ago. Since then, the value of dollar has done nothing but go “down, down, down,” said Shioi. If the dollar strengthens versus the yen, “then I’d make a lot more money,” sighed Shioi.
But that’s not the way the markets are heading, said Professor Eisuke Sakakibara, at Aoyama Gakuin University.
Sakakibara has the unusual nickname of “Mr. Yen” in Japan, known for accurately predicting the trading level of the yen. But the public started calling him Mr. Yen in the late 90’s, when he worked at the Ministry of Finance, trying to influence the dollar-yen exchange rates through public comments.
Sakakibara continues to make public comments and forecasts where he feels the yen will head. Earlier this year, he predicted the yen would strengthen into the 80’s. I sat down with Professor Sakakibara recently, the yen 85 versus the dollar.
“I think it will head down to 80,” said Professor Sakakibara dispassionately, as I cringed at his words. “And I think by the end of the year, it will break the highest level of the yen in 1995, which is 79, 78.”
Really? Can it be? I asked, secretly hoping he’d take it back.
“Of course it’s possible,” said Sakakibara.
50? 60? Is that possible?
“No, I don’t think so,” he said, much to my relief. Then with the professorial kindness you’d expect from a wizened elder, Sakakibara explained the currency markets are not as important for the impact on American expatriates like me, but as a sign of the world’s changing economy order.
“It’s not necessarily the yen strength we should be talking about, but weakness of the dollar, weakness of the dollar and euro. The center of the gravity of the world economy is now shifting towards Asia. China, India, and East Asia, are gaining strength, relative to countries like the US and Europe. This is the trend.”
It’s why Sakakibara also doesn’t advocate currency intervention, absent sudden and large spikes or dips, because the currency reflects the changing world economy. Sakakibara talked on about his predictions of a common Asian currency, like the euro, for China-India-Japan. A currency that might one day take over the dollar as the world currency, as the U.S. economy loses its dominance in the next century.
Americans living overseas are just getting a front seat to the changing world economy. Personally painful at times, but a change that Mr. Yen says is coming, ready or not.
Tokyo, Japan (CNN) – Every international journalist covering Japan has been talking about the country’s revolving door of prime ministers this week. But believe it or not, having a series of prime ministers who have all served a year or less is not so unforgivable by Japan’s electorate.
A more dangerous problem in this latest political upheaval is expressed by Maya Sugiyama, a 20-year-old commuter we met this morning. Sugiyama was heading into work, one of the many young people trying to make ends meet in Tokyo, the world’s most expensive city.
Japan’s young have a disproportionate rate of unemployment compared to their elders. They also feel the shrinking of the world’s second largest economy and in public opinion polls say they lack a sense of hope in a country rapidly aging and racking up the world’s highest debt-to-GDP ratio - a debt they fully expect they’ll be saddled with.
“Because the prime minister changes so often, I can’t trust anybody,” said Sugiyama. “They’re all the same. I have no interest.”
Yukio Hatoyama and his Democratic Party of Japan roared into power eight months ago, promising a change in the way the political business is done in the country. The DPJ promised more power to the people and less power to the bureaucrats; less political corruption and more political action. Voters felt it was a new dawn in politics for Japan.
But Hatoyama stumbled early, unable to contain the problem of relocating the U.S. military base in Okinawa. Eight months later, his poll numbers, which started at 71%, had fallen to 17%.
Voter let-down and the resulting apathy from Hatoyama’s fast fall is a much bigger problem, says Doshisha University Professor Noriko Hama, than the seemingly big problem of Japan’s revolving door of prime ministers. Professor Hama believes this is a critical time for democracy in Japan. Voters could become “so exasperated and so disappointed that they actually turn their backs on politics and no one goes to vote anymore,” warned Hama. “I think that would be the really frightening situation.”
Prime Minister Kan spoke at length and multiple times in the early hours of his tenure about regaining the public’s trust, eyeing the upcoming parliamentary elections in July. He knows what’s at stake for his party —that is clear. Analysts warn there’s also the bigger issue of keeping the public engaged in the political system, that in the last four years has only expanded the rift between it and its people.
“Hectic and confused.”
That’s how trader Tsutomu Yamada at kabu.com Securities Co. describes the morning session in Tokyo. Traders were still trying to understand what exactly happened on Wall Street, explained Yamada. The confusion over Wall Street’s plunge and concerns over a weakening euro drove the Nikkei down nearly four percent, ending the morning session down 3.74%. Exporters took the hardest hits, beginning with Nintendo dropping 11 percent on news its profits would decline more than expected.
The sell off wasn’t limited to Japan: Look across the Asia Pacific region and the markets are down across the board.
Concerned, the Bank of Japan injected two trillion yen (US$20 billion) in short term lending Friday morning. A spokesperson with Japan’s central bank says “the aim is to increase a sense of security in the markets by providing ample funds.” Read here: Calm the market’s jittery nerves.
Yoshito Sengoku, Japan’s Minister in Charge of National Policy spoke to reporters Friday morning in Tokyo, saying that the Greece crisis will have a “limited impact on Asian economies.”
But Kirby Daley, senior strategist at Newedge Group in Hong Kong, believes that the market reaction to the Greece crisis is not a limited, knee-jerk reaction. “The drops will not likely be as violent as post-Lehman, but risk aversion is setting in for the long-term, as markets over-celebrated unsustainable stimulus. We may see some relief rallies, but the overall trend should now be firmly down for stocks,” said Daley.
Afternoon trading has begun again in Tokyo. Traders have had 90 minutes during the lunch break to catch their breaths here in Japan after the morning session. Fingers crossed, they say.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.