Mr. Kuroda, the governor of Bank of Japan (BOJ) decided to implement additional monetary easing on Oct. 31. It was a surprising policy since quantitative qualitative monetary easing policy was introduced in last April. BOJ will increase the annual amount of long-term national bond purchase by 30 trillion yen to about 80 trillion yen. It was aimed at putting an end on deflation in Japan as well as acting as a shot in the arm to Abenomics. On the other hand it has resulted in quick and more devaluation of yen right after the Federal Reserve board (FRB) officially ended their bond purchase program by the end of Oct. in the New York Money Market Japanese Yen recorded $1.00=114 yen the cheapest since Dec. 2007. It may be just a matter of time that its momentum could break through the wall of $1.00=115 yen.
It may aim at a good spiral that monetary easing causes rising stock, increasing personal consumption, promotion of corporate spending which would accompany high prices of commodities and rising wage to bring robust personal consumption. Rising stock would temporarily make stock investors happy but 2nd surprise by Governor Kuroda would not last long? Its surprise effect would be squashed by the wave of the significant increase in the import prices.
Like a proverb of “The more haste, the less speed” what the Abe administration should do is steadily to implement the Growth Strategy and to give people hope and job creation especially for the retired people who could have a chance to challenge to the second life. A big city is not only place to find the job. Local restoration would ensure employment to create local originality. Weak yen would be a good chance to encourage special local products to export and to promote large-scale farming and to change Japan’s agriculture.
“Keiki” (=Business condition) is literarily subject to how people feel about it, good or bad. It would lead the economic policy made by the government of that time to success or failure. The Abe administration will have to decide within this year at the latest if the consumption tax will be raised to 10% from next Oct. Of course, it is not appropriate for a tax boost to be applied under the current economic situation. However, it should not be avoided in view of the national debt of over 1,000 trillion yen and aging society?
It is a long time since productivity of Japan has been low and 20th ranked among 34 countries of OECD and in the last place for 19 years out of 7 advanced countries. Therefore, politicians should carry out deregulation. If they show their seriousness to cut the number of the House of Representatives and Councilors by half respectively and if they try to execute fiscal consolidation and to attain primary balance Japanese people would dare to accept pension reduction and the medical insurance burden.
In early stage of containerization Japanese shipping lines have been competing under globalization of free trade. They are small numbers and exceptional talent. Therefore, their productivity is quite high. They have been suffering from rough wave of the global economy. It is not easy to make profit under such severe competition in the world. However, it is a harsh reality. Therefore, I wish Japanese lines to grow up vigorously in severe reality.
Liner Dept. Result of Japanese 3 Lines
Shipping lines, container leasing companies and container makers have been active in the midst of competition. 20f new production price seems to fall down to $1,900 per 20f. It would be hard to expect 20f price falling down such a low price for the past one month. On the other hand CIMC, the largest container maker in the world published the 3rd quarter (July ? Sep) of business result of this year. The net profit is 586,650,000 RMB (about US$ 95.88 million) by 38.1% up compared with the same period of the last year. The sales amount from Jan to Sep this year is 18.99 billion RMB by 13.7% up, comparison with the same period a year earlier.
Total new production in China is slightly over 400,000 teu. Major leasing companies could not stop ordering. They have kept buying certain volume of new containers in order to operate the procurement funds and to lease them to shipping lines. As a result long term lease rates have been falling down under keen competition. Some leasing companies have taken in the attitude of wait and see these days. It may need the attitude of wait and see without useless competition.
EF International Ltd increased capital of 5 million yen to 15 million yen in Oct because transaction amount has been increasing and settlement site is getting longer under severe competition. Therefore, it is inevitable to increase capital. On the one hand we asked “Hello Work” (the public Employment Security Office) to introduce staff for the first time. We could not request a man or woman and aging. Therefore, we set conditions for sales staff with English capability and engaging in shipping business. However, it was so surprised to see Hello Work to introduce foreigners who are living in Japan like a 36 years old Pakistani who could speak and write Japanese, native American and Japanese who have TOEIC 890 but has to commute to Yokohama via Tokyo from Saitama Pre. There were many capable people who could start the new business right away by themselves. We are happy to find the right person among them to add to our staff in Nov. On the other hand we are also looking for staff capable in desk work. However we stopped to recruit immediately because we received over 25 applications only for one week. They are all capable and skilled people from young to senior. I hopefully expect we could also find a right person who could share hardship with us.