It was $1.00=Yen 125 on June 8 for first time in 12 and a half years. Yen dropped 5 yen from $1.00=Yen 120 on May 20 for about 2 weeks. Rapid weak yen again! In the meantime, the aggregate market value of the first section of the Tokyo Stock Exchange recorded 591,300. 7 billion yen on May 22, which exceeded 590,908.7 billion yen in the bubble economy period (Dec. 1989). The Nikkei Stock Average started on June 9 was 30,313 yen which is equal to 52% of the highest price of 38,915 yen at the end of 1989 in the bubble economy period. However, there is no upsurge like the bubble economy period. The settlement of accounts of 2014 of Japanese companies are worthy of notice. 61 out of the listed companies recorded the net profit of over 100 billion yen. One of 3 listed companies in the first section of the Tokyo Stock Exchange exceeded more than 10% of Return on Equity (ROE). Japanese companies have been gaining strength. The capital investment of overall industry in the first quarter was 13,129.4 billion yen, which is 7.3% up compared with the same period of the last year. (8 consecutive quarters).
The capital investment of 2015 rises 10.5% up against 2014. It increases for 6th year in a row.
Assets in foreign currencies risen by weak yen and the direct investment of M&A of overseas companies have pushed up the net balance of foreign assets. It is 366,856 billion yen at the end of 2014. It increased 12.6% up comparing with the end of 2013. It reached a record high for 3 year in a row.
In Japan stock market speculators such as the hedge funds who aim at short-term profit but lost the places to go in the world have been investing in Japanese companies who have potential in growth and change to the profit oriented companies. A weak yen has proved to raise the stock price. The stockholding ratio of foreigners is 35.5% in all. It has come to the highest. Japanese companies have become attractive to speculators in the world.
Japan economy has also been recovering steadily. GDP of 1st quarter increased 1.0% up. It comes to 3.9% when annualized. The positive growth continues for 2 quarter. The current surplus of International Balance of Trade is 1,326.4 billion yen. The 10 months consecutive black. The real wages index of April rose 0.1% up from a year earlier. It recorded its highest increase in the last 2 years. All industrial mean allowance of the summer bonus in 2015 is 1.70% up in comparison with 2014. The unemployment rate of April is 3.3%. 0.1% dropped compared with the month before. The lowest since April 1997.
Weak Yen will bring a large number of tourists to Japan. It will contribute to domestic consumption. They are full of curiosity about local places of scenic beauty and historical interest and Japanese culture so that it is one of strong factors to activate the local area.
According to Nikkei negotiations between big shippers and shipping lines seemed to have been concluded $1900~2900 per 40f for Asia/USWC trade, which increased 10% compared with previous year and the trade for Asia /USEC seemed $3300~4000 per 40f, 10% up as well. Asia/Europe trade in surplus of ships seemed $1100~1700 per 20f as same as the last year level. Profit line of business for Asia/USWC seems to be $2200 per 40f, Asia/Europe trade seems $1400~1500 per 20f. However, reality is very severe. It is said that the price competition would start even right after the freight rates were agreed to raise. The loss of Europe freight rate should be compensated by North America trade. It appears physical strength game.
Therefore, shipping companies who have a service between Asia and Europe will continuously come to introduce more Mega containerships and try to reduce their operation costs. Maersk Line announced on June 2 to order 11×19,630teu Triple-E type + option 6. Delivery will be from April 2017 to May 2018. MSC, alliance partner with Maersk ordered 2×19,224teu + option 2 totaling 4 delivering in 2017. Hapag-Lloyd plans to order 3~9×18,000~ 20,000teu this year.
New container price in China is $1700 per 20f. There are 1.1 million teu in China factories at this moment. It is getting weak in price because of overcapacity of production, excess of steel stock and a slowdown in the Chinese economy. Leasing companies takes a wait and see attitude in ordering new containers while shipping lines increase their order of new containers. Therefore, according to the current new container stock in factories the present surplus would continue for a while.
On June 2 one of my friends in Singapore took his 14 years old son to Yokohama. We invited them for dinner with our staff to Japanese“ Izakaya” restaurant on that night. He is a Singaporean of the Japan enthusiast. In addition he could understand Japanese character like “Hiragana”, “Katakana” and “Chinese character”. We played 18 holes at Ashinoko Country Club in Hakone with 3 of us on June 3. He made a reservation for the golf club from Singapore because the golf club he belongs in Singapore ties up with the golf course. Unfortunately as for the weather forecast it was expected the heavy rain only June 3 but the weather forecast indicated a fine day on the previous and following day. However, it was a heavy rain since early morning in Yokohama as the weather report on that day. I could imagine Hakone area was worse. However, the rain was getting weak when we arrived at the golf course. The heavy rain seemed beyond a peak on the way to Hakone through the Tomei Expressway. However, a thick hog covered all over the golf course. All players including 30 people’ competition gave up playing by 9:30 except us who were the last starter because of heavy rain and fog. In consideration of visitor from Singapore and he know the manager of the golf course a bit. They allowed us to start at 10 am with a caddie in the rainy, fogy day. It was the first time for me to play in the famous golf course reserved for ourselves. Our bodies were in dripping wet and getting cold while playing with umbrella. Mt. Fuji appeared noon time for a while so that they must be satisfied in seeing it. I lost interest in playing golf quite a while ago but I thought I should not cause any trouble to them during play so that I practiced privately a week before. I could be relax in playing due to rain and fog. As a result no lost ball and hit the ball to the direction a caddie indicated. I gained confidence a bit after play. His son scored 96 even with OB, lost balls. He is taking golf lesson in Singapore. Golf is booming in China and South East Asia as Japan used to be excited. I offered them to experience Japanese food, sleep in the Japanese inn in Hakone Yumoto on that day. Of course, we enjoyed an outdoor bath together, which made our friendship stronger in the naked body.
I think it is necessary for more foreigners to come to Japan and see Japan as is and let them know about nature in Japan, hot spring, real Japanese food, compassion and concern to others, culture of the unique hospitality. I felt it is inevitable for Japanese to aggressively dispatch more information about Japan to overseas.