Foreign fast food and casual dining companies are ready to take a bite out of Japan’s food market, in spite of the country’s hampering tax hikes and reports about the struggles of major players like McDonald’s. In quick succession at the start of this year, a string of overseas companies, mainly American, announced that they would enter the Japanese market.
Local communities and governments hoping for an economic boost through a direct connection to Narita Airport’s newly-opened Terminal 3 might be in for a disappointment. The terminal currently hosts five low cost carriers (LCCs), companies that tend to operate only on highly profitable and popular routes.
The Nikkei, Japan’s most important stock index, hit a 15-year high last Friday with closing figures above the 19,000 mark. The advance of the stock market, which is largely owed to multinationals operating overseas profiting from Abenomics’ policy of monetary easing, along with a stable increase in demand from the United States, is a welcome success for Prime Minister Shinzo Abe, whose hesitance to implement or clearly define the crucial “third arrow” of his economic policy has been criticized by politicians and economists alike.
One of the major reasons for Prime Minister Shinzo Abe’s reelection last December, apart from a weakened and divided opposition, was the stability of economic policy. With a weakened yen, a stock index that is surging, and long-awaited inflation instead of deflation, Abe has been able to claim several successes.
The April 16 tragedy of the MV Sewol in the territorial waters of South Korea has been exercising an impact on the local economy of Tottori Prefecture. This has occurred mainly due to the fact that the accident, in which more than three hundred people appear to have lost their lives, has deeply undermined the South Korean public’s faith in the safety of ferry boats.
Japan is completing steps to launch a derivatives market for Liquefied Natural Gas (LNG). While oil has long been traded in both spot and future markets, LNG remains very much the province of long-term fixed-price contracts. Japan is one of the biggest consumers, accounting for some 40% of world imports.
“Joining the Trans-Pacific Partnership negotiations is a far-sighted policy,” declared Prime Minister Shinzo Abe to his Cabinet and journalists on Friday, “Japan should play a leading role toward a year-end deal.” The prime minister may be exactly right, but the fact is that very few independent observers have any firm basis for making a judgment. Not only are the TPP talks highly complex, they are also secret and moving very quickly.
The results of Sunday’s House of Councillors election are a foregone conclusion in light of the electoral district system and the number of candidates run by each party. The ruling coalition of the LDP and New Komeito will win a strong majority in the upper house but cannot possibly win on their own the 2/3 majority required for constitutional revision. What we will have when the Diet next opens will be the Abe government popular with the public and in firm control of the parliament.