Japan

Credit Suisse reinforces Japan’s offshore anxiety

21 Mar 2023

Global bank jitters have investors looking for weak links. Japanese lenders, with staid depositor bases, are unlikely targets for bank runs, but they hold $2 trln of overseas bonds with thin profit margins. They may not dump US Treasuries in haste - but rebalance they will.

Bad news salvo gives Bank of Japan some cover

16 Mar 2023

The collapse of U.S. lender Silicon Valley Bank knocked down sovereign bond yields. Consumption remains soft, and while Japan Inc is hiking wages by 3% on average, that’s well below inflation. There’s nothing to cheer, but it takes pressure off the BOJ to adjust rates.

Seoul and Tokyo demonstrate chip war limits

16 Mar 2023

Japan may ease curbs put on high-tech materials exports to South Korea after a four-year diplomatic spat. The impact was minimal; companies like Samsung found easy workarounds. The United States and China face similar difficulties decoupling sophisticated supply chain links.

Kyocera chief’s China swipe is half-convincing

22 Feb 2023

Hideo Tanimoto, who leads the $19 bln Japanese chip supplier, said the country is not a “viable” export manufacturing base. That’s hyperbole, but a winnowing of foreign firms in China is likely. Politics is a factor, but financial and competitive realities are more important.

The big bet against Japan’s new central bank boss

16 Feb 2023

The world’s third largest economy picked Kazuo Ueda to be governor of the Bank of Japan. In this Viewsroom podcast, Breakingviews columnists discuss the challenges facing this outsider as international investors continue to bet against the BOJ keeping rates low.

Bank of Japan’s new governor starts on back foot

14 Feb 2023

Academic Kazuo Ueda will replace Haruhiko Kuroda atop the central bank after the first choice demurred. He’s respected but lacks factional support and faces an unpopular prime minister pushing an expensive agenda. His appointment augurs a rocky transition at a delicate time.

Japan’s next central bank chief may rue promotion

13 Feb 2023

Bank of Japan Governor Haruhiko Kuroda retires in April. His successor’s first task will be to tweak monetary policy without wrecking the $5 trln economy, upending markets or crippling the BOJ’s balance sheet. And that’s just the start of a long to-do list.

Japan activists seek smaller fish to fry

7 Feb 2023

With the Toshiba campaign stuck in the mud, some investors are eying easier prey. Elliott Management is angling for $6 bln Dai Nippon Printing; Oasis is after a $2 bln elevator maker. If these less ambitious campaigns don’t pay off, it’ll send gadflies back to the drawing board.

Rejigged Renault-Nissan alliance looks headless

30 Jan 2023

The French and Japanese automakers clinched a deal to save their 24-year partnership. Renault will only vote 15% of its stake in Nissan, which now has a similar say in its partner. It avoids a messy divorce, but the lack of a clear leader may make decision-making trickier.

Three carry trades for a new monetary policy era

27 Jan 2023

Central banks’ moves mean that investors borrowing money in yen and placing it in U.S. assets – a once-popular “carry trade” – are no longer onto a sure-fire winner. They can do better by shorting the euro and investing in Mexico, Brazil or Hungary.

Toshiba buyout heralds a big step back for Japan

20 Jan 2023

A deal for the $15 bln conglomerate is finally in sight. Foreign investors, who agitated for years, are likely to sell control back to local owners less inclined to shake up a national icon. Domestic policy shifts may also stifle local private equity before it can get rolling.

Bank of Japan has learnt danger of half-measures

18 Jan 2023

The central bank’s decision to stay put on interest rates saw the yen soften and hurt 10-year bond yields. Last month’s surprise tweak to bond trading bands failed to impress traders. Inaction may be painful and expensive, but muddled economic signals make it understandable.

Sumitomo Jefferies would be neat but no cigar

5 Jan 2023

Boss Jun Ohta wants to expand the Japanese bank’s pact with the Wall Street firm and boost its stake. That would add investment banking without much expense. Unlike the 37% of earnings MUFG logs from owning a fifth of Morgan Stanley, Jefferies is unlikely to make the same mark.

Weed’s next frontier is in Asia

23 Dec 2022

The cannabis market is estimated to be a $100 billion industry by 2026, but largely confined to the U.S., Canada and parts of Europe. While legalising ganja has been a slow burn in Asia, official attitudes are shifting. Demand from regional consumers will slowly light up.

Bank of Japan yields to bond market force

20 Dec 2022

Christmas came early for yen bulls after Governor Haruhiko Kuroda softened his policy of controlling 10-year sovereign bond prices. Though the shift is half-hearted, it’s nevertheless a surrender. As Japan moves on from the era of ultra-cheap money, greater volatility is assured.

Traders will anxiously watch the Bank of Japan

19 Dec 2022

Governor Haruhiko Kuroda’s retirement and rising inflation may prompt the central bank to revisit ultra-low interest rates. Gyrating bond yields could force domestic investors to dump some of their $6 trln in overseas assets. Though a panic looks unlikely, rebalancing is certain.

Chip dilemma will buy Beijing precious time

19 Dec 2022

America is pushing Asian and European allies to stifle semiconductor progress in China. But antagonising the $466 bln market will be costly for South Korea's Samsung and Dutch ASML as global demand slows. Their hesitancy to fully embrace the blockade will benefit Beijing.

Takeda’s bold skin care deal shows fresh M&A itch

14 Dec 2022

The Japanese pharma giant is paying at least $4 bln for a psoriasis treatment still in trial, its biggest transaction since splashing out $62 bln on Shire in 2019. There’s a risk the drug fails, but Takeda has cash and needs new money spinners. More deals may follow.

Betting against the Bank of Japan

13 Dec 2022

Investors are closely watching for signs that Tokyo might finally start winding down its ultra-low interest rates as inflation rises. In this Exchange episode, Pete Sweeney chats with Sayuri Shirai, former BOJ policy board member, about whether and how Japan might adjust.

Japan lives at the bleeding edge of good enough

11 Nov 2022

Energy costs are spiking, the currency plunging, the population aging. Growth is meh. Tokyo, afraid of being left behind, is trying to compete with Silicon Valley. Yet returns on innovation may be overestimated. The country’s biggest problems are a matter of will, not patents.