Depend on China at your peril

The Yomiuri Shimbun (Sep. 30, 2010)
Depend on China at your peril
対日経済圧力 中国リスク回避へ分散化図れ(9月29日付・読売社説)

China is piling economic pressure on Japan following the collision this month between a Chinese fishing boat and two Japan Coast Guard patrol vessels in Japanese waters near the Senkaku Islands.

China effectively has limited exports of rare earth minerals, which are vital for manufacturing hybrid cars, energy-efficient electrical appliances and other products. Some Chinese customhouses have reportedly cranked up inspections of other goods exported to and imported from Japan, resulting in delayed shipments between the two countries.

Officially, the Chinese government has denied ordering this crackdown. However, China is clearly attempting to unsettle Japan. China's actions make a mockery of international economic rules. We think China should immediately retract its retaliatory measures.

Japan imports 90 percent of its rare earths from China. Industries that depend on these minerals are increasingly anxious about the slowdown in customs clearance procedures.

Actions trump words

China has claimed that it has not banned exports of rare earths. However, officials at several Japanese trading houses said the issuance of customs documents needed to approve exports has been halted.

A China ban on exports of rare earths only to Japan would violate World Trade Organization rules. The Japanese government must immediately investigate this worrying situation and demand an explanation from China on why customs clearance procedures have been held up.

At the same time, the government must do more to secure other rare earths production centers to ensure this nation has a stable supply of the minerals, promote research and development of rare earths substitutes and find ways to recycle the minerals.

Many Japanese companies, mainly those in the textile, auto and electrical appliance industries, have shifted their manufacturing bases to China, where labor costs are a fraction of what they are in Japan.

China's 1.3 billion population has increasingly strong purchasing power; it is certainly an attractive market for Japanese companies suffering from lethargic domestic demand due to the declining birthrate and graying population.

Reconsider business model

Nevertheless, Beijing's hard-nosed response to the latest dispute has made it painfully obvious to many Japanese firms that they should not rely too much on China to protect their business and interests.

It is disturbing that allowing Japan's economy to become a "hostage" to China's whims could sway government decisions on foreign and security policies.

Japanese companies should take this opportunity to reconsider their business strategy of concentrating production centers and investment in China, and instead start exploring new markets as the first step to reducing business risks.

Japanese companies have helped China develop technologies in such fields as energy and the environment. Some Japanese supermarkets and convenience stores have opened their doors in China, bringing jobs and a wide range of goods to the Chinese public.

We hope the Chinese government will not overlook the contributions Japanese companies have made to that country.

(From The Yomiuri Shimbun, Sept. 29, 2010)
(2010年9月29日01時52分 読売新聞)


Falling rice prices

--The Asahi Shimbun, Sept. 27
EDITORIAL: Falling rice prices

Lower rice prices may spell serious trouble for farmers but are welcome news for consumers.

The government's first response to the prospect of a sharp decline, compared with usual years, in the prices of rice to be harvested this year should be based on the viewpoint and interest of consumers.

The decline in rice prices is a product of an oversupply of the staple food in this nation. In addition to a massive carry-over of unsold rice from last year, when rice prices also dropped, an expected bountiful crop this year is likely to result in a sizable glut.

Even if depressed rice prices cause losses for rice growers, the income support program for farming households introduced this year by the government led by the Democratic Party of Japan will guarantee them a minimum level of income.

But the Central Union of Agricultural Cooperatives (Zenchu), the national organization of local agricultural cooperatives, is lobbying the government to take steps to prevent rice prices from sinking.

Specifically, the organization is demanding that the government buy surplus rice by using, ahead of schedule, the new rice stockpiling system that the farm ministry plans to introduce next fiscal year.

But we find it difficult to support Zenchu's lobbying campaign.

The biggest factor behind declining rice consumption is the shrinking and aging of the nation's population. It is glaringly obvious that the government's policy to maintain rice prices by purchasing surplus rice will reach its limits sooner or later. This approach will not solve any of the structural problems within the Japanese agricultural sector that cause an oversupply of rice.

It should be remembered that the income support program for farming households was created on the assumption that rice prices would be allowed to decline.

For decades after the end of World War II, the government maintained rice prices through the so-called acreage-reduction policy to adjust supply. This system was designed to support the income of rice farmers by forcing consumers to buy rice at prices kept artificially high.

However well intended, this policy has had many undesirable side effects for the agricultural sector. Although the government spent a total of 7 trillion yen ($83 billion) over the years to finance the acreage-reduction policy, Japanese agriculture has remained in a steady decline.
The present serious shortage of young farmers who can become the future backbone of agriculture in this nation and the vast amount of abandoned farmland can be said to be a result of this policy.

Now the government should move in the direction of integrating efforts to aid the agricultural sector through a taxpayer-financed system that will allow rice prices to fall in the domestic market.

Such a move would enhance the international price competitiveness of Japanese rice and thereby make it easier to open Japan's farm market to imports.

This policy shift could bring huge benefits to the Japanese people as a whole by eliminating the biggest obstacle in Japan's trade negotiations with other countries for free trade agreements.

Lower rice prices at home would improve the prospects for Japanese rice exports. Reputed for its safety and taste, Japanese rice has the potential to gain popularity in markets in China and other rice-eating Asian nations.

The current system of propping up the income of farming households is seriously flawed, as it is still married to policies that trim rice production to maintain artificially high prices.

Since the program covers all farmers selling rice, including very small-scale growers, it is hampering consolidation of farmland into the hands of large-scale farmers.

The time has come for new policy efforts to solve these challenges and improve the competitive environment for domestic farmers, so that Japanese agriculture can develop, even if rice prices fall.


Don't overlook violence by younger students

The Yomiuri Shimbun (Sep. 28, 2010)
Don't overlook violence by younger students
「キレる」子ども 暴力の低年齢化にブレーキを(9月27日付・読売社説)

There seems to be no end to the violence being committed by younger students. This serious situation at school is clear from a fiscal 2009 survey conducted by the education ministry.

The number of violent acts by students both at and away from school jumped to a record 61,000 cases, marking an increase for the fourth straight year, according to the survey of primary, middle and high schools across the nation.

Violence by high school students is declining, but that by primary and middle school students has continued to rise. Primary school students in particular racked up a total of 7,100 violent incidents, nearly double the figure recorded three years before. The number of cases in which primary school teachers were treated at hospitals after suffering student violence topped 100.

In the past, specific groups tended to commit violence regularly. But in recent years, there have been conspicuous instances of usually calm students who are suddenly triggered by something to commit violence.


New measures necessary

The situation has thus worsened to the extent that the problem of student violence cannot be solved merely by giving corrective guidance to the leaders of violent student groups. New countermeasures need to be taken after analyzing the current situation.

A common characteristic of children who burst into fits of rage is limited ability to control their emotions and express their feelings in words.

To help such students develop better emotional awareness, one primary school, for example, gives lessons in first- and second-grade classes in which photos of an angry child's face are shown and students are asked, "How does this student feel?"

Many experts say the problem lies with student's families. They say that in some cases students are not well disciplined because their parents tend to neglect them. In other families, overly controlling and education-obsessed parents subject their children to too much stress.

School authorities must make efforts to improve the situation by learning about the family environments of individual students and using that knowledge as the basis for serious dialogue with parents.


Bullying persists

The number of bullying cases recognized by primary, middle and high schools came to 73,000 in fiscal 2009, a decrease of 12,000 from a year before. Compared with 125,000 cases registered in fiscal 2006, the figure for fiscal 2009 shows a drop of more than 40 percent.

But it is premature to conclude that bullying at school is in fact declining. This is because some schools answered there was "no bullying" at their schools without asking students in questionnaires or individual interviews about whether that was actually the case.

A third-year middle school student in Kawasaki who had been bullied by classmates killed himself in June. Such tragedies happen repeatedly. The "decrease in bullying" shown by statistics should not lull those in charge of education into relaxing their efforts.

Bullying could happen to any child. Schools must recognize this anew and take care not to overlook even the small signs of bullying.

(From The Yomiuri Shimbun, Sept. 27, 2010)
(2010年9月27日01時12分 読売新聞)


Ichiro's 200-hit milestone due to technique, training

The Yomiuri Shimbun (Sep. 27, 2010)
Ichiro's 200-hit milestone due to technique, training
イチロー 技と鍛錬が生んだ200安打(9月26日付・読売社説)

The Seattle Mariners' Ichiro Suzuki has reached yet another milestone in Major League Baseball history.

On Thursday, Suzuki notched 200 hits for an unprecedented 10th consecutive season, breaking his own major league record of nine straight 200-hit seasons. We'd like to extend our warmest congratulations on this remarkable feat.

Ten years have passed since Suzuki joined the Seattle Mariners after a nine-year stint with the Orix BlueWave (now the Orix Buffaloes) of Japan's Pacific League.

Suzuki has exceeded 200 hits every year since moving to the United States, using his masterful bat control and natural speed on the base paths.

Commenting on his achievement, Suzuki said, "I know better than anyone that it's not easy."

His feat is a great record that can only be achieved through continuous training and good physical conditioning.

The Seattle Mariners have performed poorly in recent seasons, and the team is in last place in the American League West this year. With his team running in low gear, it must be difficult for Suzuki to maintain his concentration.


Pete Rose mark within reach

Former Major League player Pete Rose, who also is widely known in Japan, also had at least 200 hits in 10 seasons but not consecutively.

If Suzuki reaches 200 hits for the 11th consecutive season next year, he also would top Rose for the most 200-hit seasons. We hope he will break this record, too.

On Sept. 18, Suzuki collected his 3,500th hit in his major league and Japanese careers combined. However, since this statistic includes the hits he had during his Japan playing days, it does not necessarily garner much praise in the United States.

For that reason, the significance of the 10 consecutive 200-hit seasons he achieved only in the United States stands out.

Major league players praised Suzuki's achievement as a record that will be unbreakable for the next 100 years. Despite reaching the mark while his team was on the road in Toronto, the fans in attendance gave him a standing ovation.

Suzuki will turn 37 next month. When he is in a slump, some people say his abilities have declined due to age.

However, Suzuki's extraordinary speed has hardly diminished, as this season he reached the 40-steal mark for the first time in two years.


NPB knock-on effect

Suzuki's marquee performances also stimulate Nippon Professional Baseball. Norichika Aoki of the Yakult Swallows and other players who admire Suzuki are studying his technique and banging out the hits.

Japan won the World Baseball Classic championship both times the tournament has been staged, in 2006 and 2009. Japanese baseball will rise to an even higher level if more players follow Suzuki's example and achieve excellence in all three facets of the game--running, hitting and fielding.

Above all, the growing number of children who pick up bats dreaming of becoming baseball players like Suzuki will help spread the game even further.

(From The Yomiuri Shimbun, Sept. 26, 2010)
(2010年9月26日01時11分 読売新聞)


Chinese skipper's release a political decision

The Yomiuri Shimbun (Sep. 26, 2010)
Chinese skipper's release a political decision
中国人船長釈放 関係修復を優先した政治決着(9月25日付・読売社説)

Prosecutors decided Friday to release a Chinese trawler captain, who was arrested following collisions between his ship and two Japan Coast Guard patrol vessels off the Senkaku Islands in the East China Sea, without taking further legal action against him for now.

The Naha District Public Prosecutors Office in Okinawa Prefecture, which was investigating the captain, said, "The impact on the people of this nation and the future of Japan-China relations were taken into consideration."

The decision came soon after it was learned that four Japanese nationals had been taken into custody by Chinese authorities for allegedly filming "military targets" in Hebei Province.

"The impact on the people" was mentioned apparently out of concern over the possibility that the detention of the Japanese might be prolonged.

Beijing ties given priority

The prosecutors office explained that authorities were unable to prove the captain's action had been deliberately planned and that the collisions did not result in injury or serious damage.

But this is inconsistent, as investigative authorities cited the malign nature of the incident to explain the arrest and detention of the skipper.

Chief Cabinet Secretary Yoshito Sengoku insisted that the prosecutors office made the decision on its own. But there is no doubt that the issue was settled in a political decision by Prime Minister Naoto Kan and other senior members of the government and the Democratic Party of Japan. It also is said that the decision came because the U.S. government called for an early settlement of the issue.

Since the Japanese government repeatedly said the incident would be handled in line with domestic laws, the decision gave the impression that the Japanese government had given in and failed to stick to its original stance. Many people in this nation likely share this critical view. The government needs to provide the public with a thorough and convincing explanation.

Needless to say, the Senkaku Islands are an inherent part of Japan. The government must assert this point repeatedly both at home and abroad.

Long-term effects

We also cannot disregard the repercussions the latest decision will likely bring about in the future.

It is possible that JCG patrols will no longer have a strong deterrent effect on Chinese trawlers that illegally fish in Japan's territorial waters off the Senkaku Islands. The organizational functions of the JCG and its cooperation with the Maritime Self-Defense Force should be strengthened.

Amid the dispute over the skipper's detention, China blocked exports to Japan of rare earths vital for the production of hybrid car parts and other items. This development serves as a strong reminder that China is a trade partner of unpredictable risk.

Regarding materials that are largely sourced from inside China, it is crucial to secure other sources of such materials.

China acted high-handedly apparently with anti-Japan hard-liners at home in mind. But the series of countermeasures successively taken by China over a short period of time--such as the suspension of youth exchange events and negotiations over a bilateral treaty on joint development of natural gas fields in the East China Sea--were obviously going too far.

Japan should not be simply lured to a "friendship" approach toward China. From the standpoint of seeking "strategic and mutually beneficial relations," Japan must pursue its national interests calmly and realistically regarding China.

(From The Yomiuri Shimbun, Sept. 25, 2010)
(2010年9月25日01時24分 読売新聞)


Strict action needed to reform prosecutors

The Yomiuri Shimbun (Sep. 25, 2010)
Strict action needed to reform prosecutors
大阪地検特捜部 組織的隠蔽の批判は免れない(9月24日付・読売社説)

The latest revelation concerning the alleged tampering of evidence by a prosecutor from the Osaka District Public Prosecutors Office may imply an organizationwide attempt to cover up a surefire scandal.

The case in question involves a head prosecutor from the Osaka office's special investigation squad who has been accused of altering potential evidence seized during investigations into a case of alleged postal fraud. It has become known that the investigative unit was informed that its lead prosecutor had possibly falsified data, and that this finding was reported to top officials at the district prosecutors office.

A task force from the Supreme Public Prosecutors Office set up to investigate this scandal has questioned two key figures who supervised the prosecutor in question: a high-ranking prosecutor who headed the investigation unit at the time, and another senior prosecutor who was the team's deputy chief.

It must be clarified why senior officials from the district prosecutors office failed to act when they received information about what may constitute the crime of destruction of evidence. The task force must thoroughly investigate the case to get to the bottom of the scandal, while determining who should take the blame if there was indeed a cover-up.

Sketchy conduct high to low

In February, some officials of the district prosecutors office, including the head of the investigation squad, received reports that the team's lead prosecutor might have rewritten data on a floppy disk confiscated from the home of a former section chief at the Health, Labor and Welfare Ministry.

At the time, the prosecutor in question reportedly told a colleague he had planted a "time bomb" on the disk.

However, after the prosecutor told the head of the investigation unit and other senior officials that his alteration of the data "was not deliberate," they seem to have done little to uncover the truth behind his conduct.

Questions also must be raised about how the head of the investigative team described the prosecutor's action when he reported on the alleged data alteration to the Osaka office's chief prosecutor. He reportedly said the prosecutor's conduct would pose "no problem."

We feel the prosecutor's description of his action as a "time bomb" should have been sufficient to arouse suspicion that the falsification was deliberate. If the investigative team leader swallowed the explanation that the alteration "was not deliberate," he should be brought to task for being too lenient with his subordinates and for his lack of skill in dealing with the matter.

It is also questionable why the Osaka office's chief prosecutor had no reservations about the investigation team's report on the affair. It seems to us that as the head of the prosecutors office, his actions lacked urgency. He should have instructed the special investigative unit to further look into the prosecutor's conduct.

Act firmly to restore trust

The Supreme Public Prosecutors Office should investigate the depth to which senior officials at the district prosecutors office were aware of the alleged data tampering. If their action--or inaction, for that matter--is found to violate any laws, the top prosecutors office should deal sternly with them, possibly even pursuing criminal charges.

The latest scandal has prompted some Democratic Party of Japan members to say the prosecutor general--the person in charge of all prosecutors in the country--should step down. They are also seeking to have all interrogations during criminal investigations videotaped.

The scandal could arouse questions about related matters, including the credibility of depositions taken from suspects in other cases handled by the Osaka special investigation squad.

Prosecutors must uncover the truth behind the data-tampering scandal, and fully present their findings to the public. They also must reexamine every aspect of their probe into the alleged abuse of the postal discount system.

Prosecutors must demonstrate they have what it takes to root out corruption among themselves to restore the trust they have lost. Doing so is the only way to resurrect the prosecution as an investigative organization.

(From The Yomiuri Shimbun, Sept. 24, 2010)
(2010年9月24日03時01分 読売新聞)


Govt should help push up land prices

The Yomiuri Shimbun (Sep. 24, 2010)
Govt should help push up land prices
基準地価 下げ止まりの兆しはあるが(9月23日付・読売社説)

At long last signs have emerged of an end to the fall in land prices that began with the collapse of Lehman Brothers Holdings Inc. two years ago, but it remains uncertain whether the recovery trend will continue.

Changes in land prices lead to fluctuations in people's assets, which can greatly affect personal consumption. Therefore, we think the government should indirectly support land prices through measures such as an extension of the economic stimulus eco-point program for houses.

The government needs to help boost the economy further by expanding tax cuts and tax exemptions for housing and real estate.

According to a survey of land prices in all 47 prefectures released recently by the Land, Infrastructure, Transport and Tourism Ministry, the average price of residential land fell 3.4 percent in the year to July 1, while that of commercial land dropped 4.6 percent. In the previous year's survey, the average price of residential land fell 4 percent and that of commercial land decreased 5.9 percent. The latest survey shows the pace of decline has slowed in both categories.

The ministry believes the slower decline has been partly due to factors such as rising demand for land on which to build condominiums in urban areas. Recently, condominiums have become more affordable as prices have fallen sharply. Condominium sales in major cities have been recovering rapidly, bringing a bit of brightness to future land price forecasts.

Metro areas doing better

Trends in land prices in metropolitan areas--a leading indicator of land prices throughout the nation--are worth noting: In the Tokyo metropolitan area, average residential land prices fell 3 percent, while commercial land prices decreased 4.1 percent. The drops in both categories are almost half the figures from a year earlier.

If we look at the trends in more detail, signs of an end to the fall in land prices become more apparent. Take, for instance, land price trends in the first half of the year that ended on July 1 and those in the second half of the year at 15 residential locations in eight wards in central Tokyo.

During the first half of the year, land prices in all locations dropped, but prices rose in two locations, were about the same at four spots and the rate of decline slowed at eight places in the second half of the year. It is apparent that land prices began to turn around this year. A similar development can be seen in major cities such as Osaka and Nagoya.

Land prices in major cities rose markedly about three years ago, during a "mini bubble" caused by factors that included competition for prime locations among brand-name stores. However, in the wake of the so-called Lehman shock, things took a sudden turn for the worse. The latest survey may indicate the tide is about to change for land prices.

Other regions still struggling

However, land price trends in other regions are still poor. The average price of residential land in these regions dropped at a greater rate than during the previous year, while commercial land declined at about the same rate. This was the 18th straight year of decline in residential land prices in these areas, while commercial land values fell for the 19th consecutive year.

Are there any ways to prop up land prices in these regions, which have seen the value of their land fall for so long?

In Hokkaido and Mie Prefecture, some districts have increased land prices by improving their appeal as tourist destinations. Needless to say, we believe it is essential to promote local redevelopment and to encourage businesses to expand into the less urbanized regions.

(From The Yomiuri Shimbun, Sept. 23, 2010)
(2010年9月23日01時02分 読売新聞)


Prosecutors' reputation totally ruined

The Yomiuri Shimbun (Sep. 23, 2010)
Prosecutors' reputation totally ruined
押収資料改ざん 地に落ちた特捜検察の威信(9月22日付・読売社説)

The alleged falsification of data by a senior prosecutor is a grave scandal that is shaking the very foundations of Japan's criminal justice system.

The Supreme Public Prosecutors Office arrested the lead prosecutor at the Osaka District Public Prosecutors Office's special investigation squad on suspicion of tampering with evidence in the postal abuse case involving Health, Labor and Welfare Ministry officials. The ministry's former bureau chief, Atsuko Muraki, was arrested and indicted for her alleged involvement in the case but was cleared by the Osaka District Court.

The chief prosecutor is suspected to have altered data on a floppy disk seized as possible evidence from one of Muraki's former subordinates, who was then a unit chief at the ministry's policy planning division, to make it better match the special investigation team's arguments.


Unprecedented scandal

If the allegation is true, it would be an unprecedented instance of a prosecutor, who holds supreme authority in investigations and indictments, being found to have illegally fabricated evidence against a defendant. The Supreme Public Prosecutors Office must bring to light the case's entire picture and strictly punish those involved.

The special investigation squad's probe was based on the scenario that Muraki had instructed the unit chief in early June 2004 to fabricate an official document to allow a group that falsely claimed itself as a body supporting the handicapped to abuse the postal discount system for the handicapped.

However, the supposedly false document, which was found on the seized floppy disk, was last updated at 1:20 a.m. on June 1, 2004.

The chief prosecutor allegedly changed the data to show that the document was last updated at 9:10 p.m. on June 8, 2004. The Supreme Public Prosecutors Office suspects that the prosecutor altered the data because it did not fit the special investigation squad's suppositions.

A lead prosecutor, who takes charge of investigations in a criminal case, is supposed to change the course of the investigation or give up on establishing a case altogether if investigators have found evidence contrary to their case.

Altering a seized document is an inexcusable act that ruins confidence in prosecutors' investigations and makes a mockery of the justice of criminal trials.


Terrifying abuse of power

The chief prosecutor eventually returned the floppy disk in question to the former unit chief without submitting it to the court as evidence. If it had been submitted to the court, it might have been used as material evidence to establish Muraki's guilt. We are terrified at the thought of such supreme authority spinning out of control.

In addition, the prosecutors had drawn up an investigation report with the correct update time on the floppy disk but did not submit it to the court. They disclosed the report upon the request of Muraki's attorneys before her trial started.

Prosecutors must uncover what had been discussed within the special investigation squad and the district public prosecutors office over the handling of evidence and whether any other individuals were involved in altering the data. The Osaka High Public Prosecutors Office and the Supreme Public Prosecutors Office must also be blamed for having failed to fulfill their responsibility to appropriately supervise the district public prosecutors office.

In the postal abuse case, the court refused to accept many depositions by Muraki's alleged accomplices and witnesses submitted by the prosecutors, saying that the prosecutors could have coerced them into making such statements. Given that, we must say that the quality of public prosecutors has seriously deteriorated.

The Supreme Public Prosecutors Office has the responsibility to drive out corruption within the organization by thoroughly investigating the case without being lenient on its colleagues.

(From The Yomiuri Shimbun, Sept. 22, 2010)
(2010年9月22日01時26分 読売新聞)


Japan-India accord should lead to more EPAs

The Yomiuri Shimbun (Sep. 22, 2010)
Japan-India accord should lead to more EPAs
日印EPA 出遅れ挽回の確かな一歩に(9月21日付・読売社説)

An economic partnership agreement with India likely will give Japanese businesses a boost in such industries as automobiles and home electronic appliances in the huge Indian market, which has been growing rapidly.

Japan and India broadly agreed earlier this month to sign an EPA. A formal agreement is expected to be made when Indian Prime Minister Manmohan Singh visits Japan in October.

The agreement is the first of its kind to be made under the Democratic Party of Japan-led government and will make India the 12th nation or region with which this country has an EPA. Coming as it did after four years of difficult negotiations, the broad agreement is of particular significance.

The key point in the agreement is that the two nations will gradually lower tariffs on goods that account for 94 percent of the value of their exports, and eliminate the tariffs in 10 years.

The tariffs imposed by India on Japan's major export items, such as auto parts and steel, range from 7.5 percent to 10 percent. Japan would benefit greatly from their elimination.

Japanese manufacturers with production bases in India also could reduce the procurement costs of parts from Japan and other items.

The EPA also includes an agreement to ease restrictions on investment in India. We hope Japanese companies seize this chance by carefully crafting strategies for the construction of local factories and expanded investment in plants and equipment.

Highly attractive market

The Indian market is particularly appealing. The nation has a population of 1.2 billion people and its economy continues to register 9 percent annual growth. The number of middle-income households who purchase such products as automobiles and home electronic appliances is rapidly growing, and there has been strong demand for social infrastructure such as railroads and electric power.

Prime Minister Naoto Kan's administration has expressed its intention to incorporate the vigor of Asia and other regions in its new growth strategy. In line with this policy, the EPA between Japan and India is expected to strengthen Japanese companies' competitiveness and expand infrastructure exports.

But South Korea, which has been aggressively promoting EPAs, already put one with India into effect in January. Under this bilateral agreement, tariffs on many items are set to be abolished in five to eight years, a faster pace for opening up the Indian market than the one established in the Japan-India pact.

The Japan-India EPA will alleviate some of the disadvantages Japanese companies face against their South Korean rivals. But we must keep an eye on the competitiveness of South Korean companies.

Compromise needed

India has asked Japan to accept Indian nurses and other workers, but Japan has resisted making a specific decision on this matter. To deepen economic partnerships between this country and India, Japan should make concessions.

Japan has fallen behind other nations in its EPA strategy. Negotiations with South Korea have been suspended, and talks with Australia have run into difficulty as Japan is resisting opening its agricultural market.

There are no prospects even for the start of negotiations with the United States and the European Union.

To help Japan catch up, the government aims to devise basic guidelines on the EPA by November. We urge the government to include measures to open the agriculture sector, which has always been the bottleneck in negotiations. Without this, there will be no progress.

(From The Yomiuri Shimbun, Sept. 21, 2010)
(2010年9月21日01時14分 読売新聞)


Japan must map out its own GPS strategy

The Yomiuri Shimbun (Sep. 21, 2010)
Japan must map out its own GPS strategy
衛星みちびき 日本版GPSの戦略作り急げ(9月20日付・読売社説)

Japan's first navigation satellite, Michibiki, aimed at improving the global positioning system's coverage of Japan, has been launched by the Japan Aerospace Exploration Agency.

The project--undertaken jointly by the industrial, public and academic sectors--calls for technology verification tests and is aimed at reducing the margin of error of GPS devices used in car navigation and other services from the current 10 meters or so to less than one meter.

The market for satellite-based GPS products and services has been expanding globally. We hope that the Michibiki project will bring about results that make Japan more competitive in this area.

Fifty-eight different tests are planned. The success or failure of the project depends on how its high positioning accuracy can be utilized.

One example is a proposed guidance system for unmanned snow removers and farm machinery. Neither snow removal from roads nor soil cultivation in fields can be done if the machines are allowed to drift as much as 10 meters off course. Both can be done only when the margin of error is held to less than one meter.


Diverse applications

GPS has been widely used in a diverse range of fields from rescue operations in alpine accidents to consumer products such as digital cameras. Such cameras are popular because locations where photos are shot are automatically stored for use as travel records.

Improvement of GPS accuracy will stimulate further growth in such existing fields.

A hallmark of Michibiki lies in the orbit it takes. Michibiki flies in an asymmetrical figure-eight course above the western Pacific, including Japan, every 24 hours.

Michibiki's flight above Japan accounts for about eight hours of each orbit. If three satellites like Michibiki were put into orbit, at least one would be above Japan at all times. Because GPS satellites rely on line-of-sight radio wave transmission, this would nearly eliminate the problem of signals being blocked by obstacles such as buildings and mountains.

The GPS currently uses about 30 U.S. satellites to cover the entire globe. Accurate results depend on devices on or near the Earth's surface being able to compare signals from four satellites in the visible sky. The system can fail in urban and mountainous areas where the lower portions of the sky are blocked by mountains or buildings.

Additional transmissions from Michibiki, which will often be nearly overhead in Japan, will enhance positioning accuracy.

The problem is how to secure funding for the satellites that are meant to follow Michibiki. It cost 40 billion yen to build Michibiki. The cost for similar following satellites is estimated at a hefty 35 billion yen each. At least three satellites are necessary to commercialize the enhanced Japanese version of the GPS system. Discussions have begun about how to divide costs between the public and private sectors.


A project team planned

The government says it will establish a project team comprising officials from the ministries and agencies concerned to study how to pay for the satellites that will follow Michibiki by the end of the current fiscal year. In that instance, the government must give due consideration to international trends and Japan's security interests.

The GPS was developed by the United States, originally for military purposes. It remains to be seen whether its use may be restricted in the future. Out of such concern, China, India and European countries are building their own positioning systems. Russia operates its own system for the purpose of ensuring security and defense.

The United States, China and Europe are moving toward cooperation with each other on positioning technology.

Against such a background, Japan must work out a GPS strategy that will take advantage of its technology while maintaining its international voice.

(From The Yomiuri Shimbun, Sept. 20, 2010)
(2010年9月20日01時20分 読売新聞)





Consumption tax debate must proceed

The Yomiuri Shimbun (Sep. 20, 2010)
Consumption tax debate must proceed
消費税論議 新体制で与野党協議進めよ(9月19日付・読売社説)

Fiscal reconstruction and economic recovery are the main themes that Prime Minister Naoto Kan's newly reshuffled Cabinet must address. It should prop up the economy and rehabilitate the nation's fiscal condition, which is the worst among advanced nations.

To that end, the Cabinet must put its back into tackling the consumption tax issue, which the prime minister began to treat cautiously after the Democratic Party of Japan's setback in the House of Councillors election in July.

The battle lines on this issue were drawn in the run-up to last week's DPJ presidential election. While Kan said he would consider drastic tax reforms, including of the consumption tax, his opponent, former DPJ leader Ichiro Ozawa, stressed the government should cut waste before raising taxes.


Increase is inevitable

It is a foregone conclusion that reducing waste, no matter how seriously the government tackles the problem, will not generate much in the way of financial resources.

Also, we cannot say that replacing central government subsidies to local governments with lump-sum grants to them with fewer strings attached, or securitizing state-owned assets, constitutes the kiss of life for an anemic economy.

It is likely that Kan's victory in the DPJ leadership race was due in part to the many DPJ lawmakers, party members and supporters who judged as unreasonable Ozawa's vow to fully implement the promises contained in the party's manifesto without clearly indicating the financial resources to fund them.

It is impermissible for the issue of financial resources to be left on the shelf any longer in this country, which is saddled with massive budget deficits. And it is clear that raising the consumption tax rate is unavoidable to secure funds to cover the nation's ballooning social security costs.

A Yomiuri Shimbun opinion survey conducted during the DPJ presidential election race found that 52 percent of respondents supported Kan's stance toward the consumption tax, greatly surpassing the 38 percent supporting Ozawa, who took a negative view toward a tax hike. The people apparently want thorough debate over the issue.

However, although Kan called for drastic tax reforms during the DPJ presidential election, he has yet to go further into their vital contents.


Start discussing details

Some DPJ members, such as Ozawa, are stubbornly cautious toward the consumption tax issue. Kan should lead intraparty debate in various settings, including a tax panel that the DPJ has resurrected, while again calling on opposition parties to join a wider discussion.

It is also urgent to lower the nation's corporate tax rate, which is relatively high by world standards. To rejuvenate the Japanese economy, it is essential to enhance corporate vitality and improve competitiveness. Lowering the corporate tax rate is indispensable for that.

With the Finance Ministry concerned about a possible decline in tax revenues, the government's Tax Commission is expected to face tough going. Kan should not simply leave matters to the commission but must exercise leadership and achieve the objective of lowering the corporate tax rate as part of tax system revision for fiscal 2011.

Kan's touchstone for the time being is the fiscal 2011 budget compilation. Budget requests hit record highs, but Japan is mired in an extraordinary fiscal situation in which the government is taking in less through taxes than it borrows through bonds. Therefore, the government can no longer afford to continue handout policies.

The government should compile a finely tuned budget in which, for example, such policies as the child-rearing allowance are boldly reviewed while spending that would help underpin the country's economy is increased.

(From The Yomiuri Shimbun, Sept. 19, 2010)
(2010年9月19日01時15分 読売新聞)


New Cabinet must tackle economy first

The Yomiuri Shimbun (Sep. 19, 2010)
New Cabinet must tackle economy first
菅改造内閣 まず景気回復に全力を挙げよ(9月18日付・読売社説)

Prime Minister Naoto Kan's reshuffled Cabinet was launched Friday.

Kan retained five Cabinet members, including Yoshito Sengoku in the central post of chief cabinet secretary and Yoshihiko Noda, who emphasizes fiscal reconstruction, as finance minister. However, the prime minister made new appointments for the 12 other posts, including those of health, labor and welfare minister and economy, trade and industry minister.

With this major shift in its lineup, the new Cabinet must boldly tackle a number of domestic and diplomatic issues.  内閣の陣容を大幅に入れ替えたのを機に、内政・外交の諸課題の解決に、果断に取り組まなければならない。

First and foremost should be measures to address the rising yen and the flagging economy.

As a result of monetary authorities recently making their first market intervention in 6-1/2 years, the sharp appreciation of the yen has been stemmed for the time being. But there should be no optimism about what is to come.

Finance Minister Noda must make the utmost effort, in close cooperation with the Bank of Japan, to prevent appreciation in the yen's value.


Put growth strategy on track

Kan intends to craft a supplementary budget for this fiscal year that includes additional stimulus measures. Given the uncertain economic outlook, this is a reasonable decision.

It also is essential to have a growth strategy to invigorate private companies and increase their international competitiveness. Cabinet ministers in charge of economic affairs must exercise leadership so the government-launched Council on the Realization of the New Growth Strategy can fully function.

Budget requests made by ministries for the next fiscal year total more than 96 trillion yen, far exceeding this fiscal year's budget. The state's finances are tight, so the budget requests must be reduced. But if that causes the economy to cool down further, the loss to the nation would be even greater.

Regional economies are in dire straits. Funding should be increased for projects that could stimulate the economy and create new jobs. It is important to employ a selective, focused strategy in budget compilation.

It is the handout policy measures included in the Democratic Party of Japan's manifesto for last year's House of Representatives election that must be drastically revised. Little economic benefit can be expected from such measures as child-rearing allowances and toll-free expressways.

To improve fiscal conditions and secure a stable revenue source for social security spending, raising the consumption tax rate is inevitable.

Kan has called for suprapartisan discussions on the consumption tax and social security. He needs to urge opposition parties to start such discussions soon.

In the extraordinary Diet session that is expected to be convened in October, it is vital to obtain cooperation from the Liberal Democratic Party and other opposition parties under the divided Diet, where the ruling camp has a majority in the lower house while the opposition camp controls the House of Councillors.

LDP Secretary General Nobuteru Ishihara has been receptive to the idea of suprapartisan talks. But he maintains they will not take place as long as the DPJ continues its handout measures, and has set revision or withdrawal of these pledges as a condition for beginning suprapartisan talks. This is only natural.

Kan should bring about suprapartisan talks by drastically reviewing the policy pledges. Doing so also would pave the way for the formation of policy-based partial alliances between ruling and opposition parties.

The post of foreign minister was given to Seiji Maehara, who previously served as land, infrastructure, transport and tourism minister. The previous foreign minister, Katsuya Okada, is now DPJ secretary general.


National interests key

Maehara, who is well versed in security affairs, has many personal connections with pro-Japan experts in the United States. He apparently was seen as a good choice to heal the bilateral relations damaged under the administration of former Prime Minister Yukio Hatoyama.

We expect Maehara to make every possible effort, together with Defense Minister Toshimi Kitazawa, to realize the relocation of the U.S. Marine Corps' Futenma Air Station within Okinawa Prefecture as agreed by the two governments in May.

China has acted in a high-handed manner following an incident in which a Chinese trawler collided with Japan Coast Guard patrol vessels in waters off the Senkaku Islands in the East China Sea earlier this month. Maehara has taken a tough stance on China's military buildup ever since his days as head of the DPJ, and we hope that in relations with China he will assert what needs to be asserted, based on careful consideration of this country's interests.

Furthermore, the relationship between the government and political parties must be rebuilt, as must that between politicians and bureaucrats.

The former Hatoyama Cabinet did not have sufficient communications with key members of the ruling party, and its decision-making process was chaotic as policies were approved and then reversed a number of times.

Koichiro Gemba, who doubles as state minister in charge of national policy and chairman of the DPJ's Policy Research Committee, must act as a bridge between the DPJ and the Cabinet.

Non-lawmaker Yoshihiro Katayama was appointed internal affairs and communications minister. Katayama, a former Home Affairs Ministry bureaucrat, worked to increase administrative transparency when he served as governor of Tottori Prefecture, and as a private-sector member of the Government Revitalization Unit, he has actively called for reform of the civil service.

Relations between politicians and bureaucrats under the DPJ-led government always have been awkward. If politicians fail to listen to bureaucrats' opinions and advice and discourage their enthusiasm by misconstruing the true meaning of politician-led government affairs, they will end up with a stagnant administration.

All the Cabinet members must be firmly committed to utilizing bureaucrats in ways that bring out the best of the bureaucrats' capabilities.


Intraparty struggle remains

The reshuffled Cabinet and DPJ leadership do not include anyone from the intraparty group led by former DPJ leader Ichiro Ozawa, who lost to Kan in the recent party presidential election.

Many in the Ozawa group are junior lawmakers. Kan intends to appoint a number of Ozawa group members as senior vice ministers and parliamentary secretaries to establish party unity.

But Ozawa refused to take the post of DPJ acting president offered by Kan. Ozawa apparently is determined to act as an intraparty opposition force, expecting Kan's administration to get bogged down soon or later.

As the seeds of intraparty conflict remain, Kan will have difficulty steering the administration.

(From The Yomiuri Shimbun, Sept. 18, 2010)
(2010年9月18日01時33分 読売新聞)



Recently, I’m making comments on the postings of President Obama in facebook. I’ve realized reaction on my comments is quicker than that one in Japan. (It is slower in Japan.) I’m satisfied with the reaction, as I think my posting in English is accepted. Around two years ago, my posting for an American discussion forum was hated and rejected, because of lack of vocabulary in English as well as lack of American and European thinking way. Now it seems to me that I’ve already got rid of the difficulty. It is only concerning about English, but English! I’ve got impressed with the reaction made by foreigners. Thank you very much.
(srachai from khonkaen, thailand)


photo by srachai from OCNフォトフレンド

Coexistence means fighting cultural frictions

The Yomiuri Shimbun (Sep. 18, 2010)
Coexistence means fighting cultural frictions
排外主義の台頭 異文化とどう共生していくか(9月17日付・読売社説)

The burqa, an enveloping outer garment, and the niqab, a veil covering the face, are worn by devout Muslim women.

The French legislature has passed a bill banning women from wearing this type of clothing in public places.

The law, prepared by the French government, will take effect in six months unless objections are raised by the Constitutional Council, an organ tasked with examining the constitutionality of laws.

Protagonists of the burqa-niqab ban have said wearing these garments runs counter to the principle of separation of church and state, and to the emancipation of women.

President Nicolas Sarkozy's government has continued to send Roma back to such countries as Romania since summer. His administration is also considering revoking French nationality for immigrants found guilty of committing major crimes.

Sarkozy's strong measures, including his crackdown on Roma communities, are a response to street disturbances by groups of young Roma and immigrants. However, the president continues to be accused of trying to resurrect his slumping popularity through these harsh measures, with a view to being reelected president in 2012.

Violation of EU rules

France's expulsion of Roma, also known as Gypsies, has drawn fire from other European Union nations on the grounds that it violates the rule of freedom of movement within the bloc. However, a majority of French people support the Roma expulsion and burqa ban.

If Sarkozy is merely trying to please the public through his antiforeigner policy, it is a sad commentary on France's national motto of liberty, equality and fraternity.

France is not the only country that apparently has become intolerant of immigrants and other minorities.

The Sept. 11, 2001, terrorist attacks on the United States have led many Americans and Europeans to view Muslims with fear and suspicion.

Recent fiscal crises gripping some European countries, combined with a rise in unemployment, have triggered an even stronger antipathy toward immigrants. This is exemplified by ultrarightist parties making major gains in Dutch and Hungarian elections earlier this year after calling for restrictions on Muslim immigrants and a crackdown on Roma.

Rise in xenophobia

The anti-burqa movement is also gathering momentum in Belgium and Spain. Italy has also has set its sights on expelling Roma.

In early September, a board member of Germany's federal bank was dismissed for repeating racist remarks about Muslim immigrants and Jews. According to a survey, only about 30 percent of Germans thought the banker should be fired.

The rise in xenophobic sentiment also is noticeable in the United States, a melting pot for immigrants. Divisions have deepened among Americans over a plan to build a mosque and Islamic center near New York's Ground Zero. Several days ago, a Florida pastor opposing the mosque construction plan stirred up an international furor when he vowed to burn copies of the Koran.

The ongoing process of globalization obliges people to live with those who adhere to different religious faiths, manners and customs. Japan is no exception.

The coexistence of different cultures also requires efforts by immigrants and other minorities to assimilate into the communities they live in. A society that accepts such minorities must fight cultural frictions that give rise to antiforeigner sentiments.

(From The Yomiuri Shimbun, Sept. 17, 2010)
(2010年9月17日01時34分 読売新聞)


China shouldn't stir up anti-Japanese sentiment

The Yomiuri Shimbun (Sep. 17, 2010)
China shouldn't stir up anti-Japanese sentiment
尖閣沖漁船衝突 中国は「反日」沈静化に努めよ(9月16日付・読売社説)

China has taken a strikingly hard line over Japan's handling of the recent collisions of a Chinese fishing trawler with two Japan Coast Guard patrol vessels off the Senkaku Islands in the East China Sea.

China has protested five times to Japanese Ambassador to China Uichiro Niwa over the arrest of the trawler's captain. China also unilaterally canceled talks on a pact covering joint gas field development in the East China Sea and a scheduled visit to Japan by Li Jianguo, vice chairman of the Standing Committee of the National People's Congress.

In particular, the summons of Niwa by Chinese State Councillor Dai Bingguo, a deputy prime minister-level official, in the middle of the night on a holiday flies in the face of diplomatic protocol.

China's postponement of the gas field talks, which has no direct link with the ship collisions, is an overreaction. We strongly urge China to exercise self-restraint.

Japan in the right

The collisions occurred in Japanese waters off the Senkaku Islands, which are inherently Japanese. It is quite reasonable for Japan to deal with illegal activities in these waters in accordance with domestic law.

China is mistaken if it thinks Japan will buckle to China's demands if it plays hardball.

Since the 1970s, China has claimed the Senkaku Islands belong to China. It has instilled this belief among its people through "anti-Japanese patriotism" education since the 1990s.

If Chinese people get the impression that their government is "weak-kneed," it could ignite simmering public discontent over the country's economic disparities and other ills, which could escalate into anger directed at the Chinese Communist Party leadership.

This fear has apparently driven the Chinese government to take a high-handed stance toward Japan over the collisions. But we think Beijing is barking up the wrong tree.

Online bulletin boards in China have been increasingly used to post extreme messages encouraging retaliatory attacks on Japan. Japanese living in China have been harassed, and small metallic balls were fired at a Japanese school building in Tianjin.

Level heads needed

The Japanese government on Monday sent members of the fishing boat crew, except for the captain, back to China, together with the vessel.

We hoped China would applaud this attempt by the Japanese government to take some of the sting out of the situation. However, China has proclaimed the crew and vessel were returned "due to the united action taken by the Chinese government and its people." Beijing has used Japan's gesture to earn brownie points with the public.

This will only inflame "anti-Japanese" sentiment among Chinese people. We urge the Chinese government to defuse such sentiment and prevent a recurrence of the 2005 "anti-Japanese riots."

We also hope the Japanese side will continue to keep a level head. That being said, the government must not hesitate to refute inaccurate Chinese media reports, such as the claim that JCG patrol vessels "crashed into the fishing boat from behind."

The JCG videotaped the fishing boat intentionally colliding with two patrol vessels. However, the JCG has not released the tapes because it might need to submit them as evidence in court should the incident become a criminal case.

If it becomes apparent that the captain was at fault, it may soothe public anger in China. Perhaps making the videotape public would be one way to achieve this.

(From The Yomiuri Shimbun, Sept. 16, 2010)
(2010年9月16日01時27分 読売新聞)


unwelcoming fx intervention


photo by srachai from OCNフォトフレンド

jpy/usd fx prospect


Japanese FX Intervention
Wed, Sep 15 2010, 08:53 GMT
by Mitul Kotecha

The Bank of Japan acting on the behest of the Ministry of Finance intervened to weaken the JPY, the first such action since 2004. The intervention came as the USD was under broad based pressure, with the USD index dropping below its 200-day moving average. USD/JPY dropped to a low of around 82.88 before Japan intervened to weaken the JPY. The move follows weeks of verbal intervention by the Japanese authorities and came on the heels of the DPJ leadership election in which Prime Minister Kan retained his leadership.

One thing is for certain that Japanese exporters had become increasingly concerned, pained and vocal about JPY strength at a time when export momentum was waning. However, the move in USD/JPY may simply provide many local corporates with better levels to hedge their exposures.

Time will tell whether the intervention succeeds in engineering a sustainable weakening in the JPY but more likely it will only result in smoothing the drop in USD/JPY over coming months along the lines of what has happened with the SNB interventions in EUR/CHF. As many central banks have seen in the past successful intervention is usually helped if the market is turning and in this case USD/JPY remains on a downward trajectory.

Although the BoJ Governor Shirakawa said that the action should “contribute to a stable foreign exchange-rate formation” it is far from clear that the BoJ favoured FX intervention. Indeed, the view from the BoJ is that the move in USD/JPY is related less to Japanese fundamentals but more to US problems.

Now that the door is open, further intervention is likely over coming days and weeks but for it to be effective it will require 1) doubts about US growth to recede, 2) speculation of Fed QE 2 to dissipate, 3) and consequently interest rate differentials, in particular bond yields between the US and Japan to widen in favour of the USD. This is unlikely to happen quickly, especially given continued speculation of further US quantitative easing. A final prerequisite to a higher USD/JPY which is related to the easing of some of the above concerns is for there to be an improvement in risk appetite as any increase in risk aversion continues to result in JPY buying.

When viewed from the perspective of Asian currencies the Japanese intervention has put Japan in line with other Asian central banks which have been intervening to weaken their currencies. However, Asian central bank intervention has merely slowed the appreciation in regional currencies, and Japan may have to be satisfied with a similar result. Japan’s intervention may however, give impetus to Asian central banks to intervene more aggressively but the result will be the same, i.e. slowing rather then stemming appreciation.

As for the JPY a further strengthening, with a move to around 80.00 is likely by year end despite the more aggressive intervention stance. Over the short term there will at least be much greater two-way risk, which will keep market nervous, especially if as is likely Japan follows up with further interventions. USD/JPY could test resistance around 85.23, and then 85.92 soon but eventually markets may call Japan’s bluff and the intervention may just end up putting a red flag in front of currency markets to challenge.

Published on Wed, Sep 15 2010, 08:54 GMT

After a bruising battle, Kan faces tough tasks

The Yomiuri Shimbun (Sep. 16, 2010)
After a bruising battle, Kan faces tough tasks
菅代表再選 円高と景気対策に挙党態勢を(9月15日付・読売社説)

Prime Minister Naoto Kan defeated Ichiro Ozawa, former secretary general of the Democratic Party of Japan, by a significant margin in the party presidential election Tuesday following a hard-fought battle that has opened a rift in the party.

The confusion in the party, which followed the major defeat it suffered in the House of Councillors election in July, has effectively created a political vacuum in the nation. It cannot be denied that the situation has caused national policies to stagnate and has smothered the nation's politics in a sense of helplessness.

During the intraparty struggle, the government fell one step behind in dealing with the yen's rapid appreciation and the flagging economy. This was widely noticed.

Kan should immediately form his new Cabinet, appoint new party executives and exert leadership in implementing economic stimulus measures and drafting the fiscal 2011 budget.

Scandal held Ozawa back

Kan's victory, however, owes a lot to the "weak points" of his opponent, Ozawa.

In connection with scandals involving his political funds management organization, his former secretaries were arrested and indicted. He resigned as party secretary general right before the upper house election.

In the party leadership race, former Prime Minister Yukio Hatoyama, who was also involved in a politics-and-money scandal and had resigned as prime minister, threw his support behind the DPJ heavyweight. It was a renewed challenge by the Ozawa-Hatoyama duo toward the party leadership, a move that most observers found hard to understand. It was natural that many non-lawmaker party members and registered supporters did not accept them.

In connection with the scandal, an inquest of prosecution committee is scheduled to decide in October--for the second time--whether Ozawa should be indicted in connection with a suspicious land purchase by his political funds management group.

When Ozawa was asked what he would do if the independent panel decides that he merits the indictment and he is prosecuted, he clearly stated he would neither leave the party nor resign as Diet member, indicating that he planned to fight the charges in court.

However, Ozawa has failed to fulfill his responsibility to explain his politics-and-money problems. His remarks undoubtedly aroused opposition and doubt among many party members.

In the end, one factor behind Ozawa's defeat in the presidential election was the possibility that the country might have ended up with a prime minister who was on trial in a criminal case.

Passive support to Kan

However, much of the support Kan received in the presidential election was passive. In other words, many of his supporters apparently did not want to have yet another prime minister barely three months after Kan assumed the post, or the third prime minister within a year.

Kan and Ozawa staged a neck and neck battle for votes by Diet members, suggesting that there are deep-rooted frustrations over the prime minister's management of his administration.

How does Kan intend to handle the divided Diet, in which the ruling bloc controls the House of Representatives while the opposition camp holds a majority in the upper house? And how will he reunite his party, which was split in the presidential election?

During the presidential election campaign, Kan failed to present clear strategies on how to overcome such problems, simply insisting that it would be possible to form a consensus through "careful" and "modest" discussions in the divided Diet.

In a speech after his reelection as party leader, he sought cooperation from party members. "To form a united party in which all party members will be able to fully exert their power now that the game is over and there are no sides, I ask for your support," he said.

If Kan opts for a troika system by appointing Ozawa and Hatoyama to key Cabinet or party posts, it may end up creating a dual power structure, just as in the Hatoyama administration. We urge the prime minister not to repeat that mistake. He must appoint the right people to the right positions to decisively implement policies.

Now that the party leadership race is over, it is anticipated that Ozawa's supporters will intensify moves to shake the administration not only in personnel affairs but also in budget compilation and other policy matters. Some may even try to break away from the party.

The prime minister is highly likely to face difficult political situations, in which he has to confront the Liberal Democratic Party and other opposition parties on one hand while dealing with the "intraparty opposition group" formed by Ozawa's supporters on the other.

In addition, Kan has to deal with a full political agenda.

As for the consumption tax rate hike, the prime minister has toned down his recent stance on the issue compared with what he said in the upper house election campaign. "We'll discuss the future of social security services together with fiscal resources. It'll be important to discuss the consumption tax in that process," he said during the presidential election campaign.

However, if he adopts the "once bitten, twice shy" approach, he will unlikely be able to restore this country's public finances, which is one of his key policies.

The prime minister should expedite efforts to call on the LDP and other parties for suprapartisan negotiations to lay the groundwork for a consumption tax hike in the near future.

Reevaluate election pledges

In the presidential election campaign, Ozawa called for sticking to the pledges the party made for the lower house election last year. However, his defeat indicates that his argument had been rejected.

Japan's fiscal condition is the worst among the major industrialized countries. To meet the fiscal 2010 budget, the government has been forced to issue bonds in an amount greater than its tax revenues. Given the situation, we believe there is no room for the government to continue the handout policies outlined in its manifesto, especially since no economic effects can be expected from such measures.

The government therefore must drastically review the child-rearing allowance program and the plan to make expressways toll-free in the fiscal 2011 budget compilation.

In the middle of the presidential election campaign, the prime minister ordered the relevant government offices to consider lowering effective corporate tax rates, which are high by international standards. The step is necessary to boost Japanese companies' potential power and raise their international competitiveness. The government must put this measure into practice in the tax system reform for the next fiscal year.

As for the relocation of the U.S. Marine Corps' Futenma Air Station in Okinawa Prefecture, Ozawa suggested reviewing the Japan-U.S. agreement reached in May under the Hatoyama administration, exposing the fact that the DPJ is significantly divided over security policies.

As soon as possible, Kan should dispel U.S. concerns that may have been generated by Ozawa's remarks and start full-fledged coordination with Okinawa Prefecture and the United States in line with the Japan-U.S. agreement.

(From The Yomiuri Shimbun, Sept. 15, 2010)
(2010年9月15日01時53分 読売新聞)


To be the first lady in Japan



cite from lovedoor news



Japanese banks must bolster core capital ratios

The Yomiuri Shimbun (Sep. 15, 2010)
Japanese banks must bolster core capital ratios
銀行新規制 邦銀は自己資本の充実を急げ(9月14日付・読売社説)

The Basel Committee on Banking Supervision, comprised of central bankers and supervisors from major countries, agreed Sunday on a new framework for calculating minimum core capital requirements for leading financial institutions.

The new regulations decided on by the Switzerland-based committee are meant to compel banks to ensure sounder management, to prevent any repeat of the international financial crisis.

Based on the new rules known as Basel III, Japan's three megabanks will have to increase their core capital as soon as possible.

A bank's capital adequacy ratio indicates the amount of core capital it has to cushion potential losses, as a percentage of loans and other assets. A higher capital adequacy ratio means a bank has a greater capability to deal with risk.

The new rules require banks to increase the core tier 1 capital, such as common stock and retained earnings, that they must hold in reserve, to at least 4.5 percent of assets, from the current 2 percent.
They also have to build a separate capital conservation buffer equivalent to 2.5 percent of assets. This makes the total top-quality capital requirement even higher--at least 7 percent of assets.

The new rules will be phased in from 2013 and take full effect in January 2019.


Early proposals too strict

Proposals were initially floated in the committee that the minimum core tier 1 capital ratio be set between 6 and 8 percent and introduced in 2012 because the United States and Britain, which have suffered greatly from the credit crisis, demanded stricter requirements.

However, Japan, Germany and some other countries opposed this, saying that tightening regulations too quickly would cause a credit squeeze and negatively affect the real economy.

Although the worst of the financial crisis is over, the future of the global economy is still uncertain. The U.S. economy is quickly slowing down and Europe is still suffering from the financial crisis.

If regulations on bank capitalization had been tightened quickly as the United States and Britain demanded, banks might have started forcibly calling in loans and lowering loan assets to improve their capital adequacy ratios.

We think it an appropriate conclusion that the tighter requirements initially proposed were relaxed and that banks were given longer-than-expected transition periods before the new rules will be implemented.

It was a bitter lesson when banks in the United States and some European countries fell on tough times due to the credit crisis and were bailed out with taxpayers' money. With the introduction of the more stringent rules, banks must improve their own strength to weather business crises, and not casually depend on taxpayer bailouts.


Tough road ahead

Attention is now focused on how Japanese banks, including the three megabanks, will deal with the new rules.

The core tier 1 capital ratios of Mizuho Financial Group, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group are said to be between 5 and 7 percent. The Financial Services Agency said Japanese banks will be able to meet the new international rules before the requirements are tightened.

However, there is no easy way for Japanese banks to meet the requirements while competing fiercely with gigantic foreign rivals. They must increase their core capital ratios by reviewing management strategies and steadily making profits.

(From The Yomiuri Shimbun, Sept. 14, 2010)
(2010年9月14日01時25分 読売新聞)


China's military buildup worries intl community

The Yomiuri Shimbun (Sep. 14, 2010)
China's military buildup worries intl community
防衛白書 中国軍増強は国際社会の懸念(9月12日付・読売社説)

China's military buildup, as well as the activities of its navy and air force, are a common concern among many countries in the region. Japan must repeatedly hold constructive talks with China, and strongly and tenaciously call on that country to dispel such concerns.

The 2010 white paper on defense explicitly says that the opaqueness of China's defense policy and military power is a matter of concern to Japan and other countries in this part of the world and in the larger international community. It also states the need to meticulously analyze China's activities.

China's military might has been an important theme in defense white papers in recent years, but the level of concern expressed in this year's report is greater than before. This is very natural in view of the rapid modernization of China's military forces and the expansion of the range of its military activities.

In the South China Sea, friction between China and Southeast Asian countries has been increasing. There were a number of threatening moves this spring: A fleet of 10 Chinese warships, including destroyers, entered an area west of Japan's southernmost island, Okinotorishima, and a ship-based helicopter flew extremely close to a Maritime Self-Defense Force destroyer on two occasions.

The Chinese Navy's activities are considered to be part of its "anti-access strategy" to hamper the engagement of the U.S. military in regional conflicts, such as an emergency involving China and Taiwan. The United States, as a result, is increasingly vigilant toward Chinese naval moves.


China's expanding 'core'

China has begun to apply the expression "core interests," which it has used regarding its sovereignty and territorial integrity concerning Taiwan, to the South China Sea as well. A similar phrase is certain to be used in the future to describe China's efforts to secure its maritime interests in the East China Sea.

How should Japan deal with such Chinese moves?

First and foremost, Japan must reconstruct a system in which the Japan-U.S. alliance can function properly. It is essential to restore the relationship of trust with Washington, which has been damaged by the immature diplomacy of the Democratic Party of Japan-led government.

The peacetime warning and surveillance activities of the Self-Defense Forces must be bolstered. Such efforts are intended to strengthen "active deterrence" through troop operations, as opposed to "passive deterrence" through only the possession of military units and equipment.

For this reason, it is problematic that Japan's defense spending has declined 5 percent in the past decade. China's military expenditures approximately quadrupled during the same period, and those of the United States and South Korea more than doubled.

It is also important to make efforts--through defense exchange programs and security dialogue--to have Beijing enhance the transparency of its military spending and activities, and comply with international rules.


No concrete results

Recent years saw progress in exchanging visits by defense ministers, officers and warships between Japan and China. But those activities did not bring about such concrete results as the establishment of a mechanism for maritime communications to prevent accidents and joint training for search and rescue operations.

The defense white paper was supposed to be released in late July, as usual. But publication was postponed until last week on the pretext of adding the moves of the United Nations concerning the sinking of a South Korean warship.

But the additional portion accounts for a mere one paragraph in the main text and a sidebar. The real reason for the postponement was obviously excessive consideration to South Korea ahead of the 100th anniversary of Japan's annexation of the Korean Peninsula in August.

The government should avoid such a poor approach based on a principle of peace at any price.

(From The Yomiuri Shimbun, Sept. 12, 2010)
(2010年9月12日01時08分 読売新聞)


Koran-burning in U.S..

--The Asahi Shimbun, Sept. 10
EDITORIAL: Koran-burning in U.S..

A small Christian church in Florida called for the burning of the Koran, the sacred book of Muslims, on Sept. 11, the ninth anniversary of the 2001 terrorist attacks against the United States.

According to the church, the plan is aimed at alerting the world to the dangers of Islam, which it says "is of the Devil."

Anyone can imagine how much antipathy such an act would incur among people who believe in the Koran.

News about the plan made headlines around the world. In Afghanistan, where U.S. and European troops are stationed, residents staged protests. The commander of U.S. forces in Afghanistan warned that the book burning could put his troops in further danger. Such reactions are natural.

The building of a free and tolerant society is the foundation of the United States. First U.S. President George Washington wrote that the United States "gives to bigotry no sanction, to persecution no assistance." It is clear the church's plan would run counter to this philosophy.

Everything must be done to prevent the rift between the United States and the Islamic world from widening. We urge the church to immediately cancel its plans.

The image of passenger planes hijacked by terrorists crashing into the World Trade Center towers in New York nine years ago is still fresh in our minds. In the background of that attack was Muslim extremists' antagonism and distrust against the United States, which holds much of the world's wealth and power.

The George W. Bush administration, which plunged into war in Afghanistan and Iraq, could not alleviate such anti-U.S. sentiments.

Signs of change appeared after President Barack Obama, who advocates reconciliation with the Islamic world, took over. He embarked on mediating Middle East peace and reached a decision to withdraw U.S. troops from Iraq.

What has become clear now is the bitter conflict and agony within the United States over peaceful coexistence with Islam.

A plan to build a mosque near the site where the World Trade Center stood has reached a deadlock in the face of opposition by residents. While the plan is aimed at promoting understanding toward different cultures, some families of victims of 9/11 say it is an affront to the memories of their loved ones.

The number of Muslims around the world centering on the Middle East and West Asia is estimated at between 1 billion and 2 billion. The United States, a society of immigrants, is also home to millions of Muslims, and many mosques exist across the country. People of different religious faiths live in the same society.

In Europe, moves to exclude Islamic immigrants and ban women from wearing veils are emerging. Growing anxiety over the increase in jobless people and other issues is apparently behind the rising trend to cast a wary eye against social minorities.

But now, security and prosperity of not only the United States but also the entire world cannot be maintained without coexistence with Islam.

Last year, in a speech at Cairo University, President Obama quoted the Koran, the Talmud, the compendium of Jewish law, and the Bible, saying, "The people of the world can live together in peace."

We want U.S. society to eliminate narrow-minded thinking and recover its tradition of showing tolerance and magnanimity to accept different cultures.