Switzerland Newsletter

Issue 30

September 2011 Switzerland Newsletter

Japan’s current economic situation As difficulties related to 280,046 yen per house- Special points of interest: the supply of goods have hold in July from a month • While supply-side constraints have been mostly resolved, Ja- earlier. The consumer con- been mostly resolved, Japan’s indus- pan’s economy continues fidence index also in- trial production was up for the fourth to recover, returning to a creased in July for the straight month in July 2011 to 93; it almost recovered to February pre- production almost similar third consecutive month, earthquake levels of 97.9. to pre-earthquake levels. but remained stable in Whereas exports remain August at 37.0 (see • “Otsuka will soon bring on the market a compound that will target multi at a slightly lower level graph). In addition, the -drug resistant tuberculosis (MDR- than last year (-3.4% in unemployment rate was TB) – one of the most deadly and July), they rose sharply in 4.7% in July, up from 4.6% complicated forms of TB to treat”, both May and June and in June but down from Dr. Carlevaro stated. marginally in June (+0.1%) 4.0% in July 2010. • “BoJ is unlikely to take a decision to ¥5,781 billion. Exports As a result of the recovery similar to SNB’s one. The yen is the to the United States of foreign and domestic third most traded currency, after the US dollar and the euro, accounting (+3.8%), China (+2.8%) demands, Japan’s indus- for 9.5% of the foreign exchange and the European Union Some indices reflecting Ja- trial production was up for market, whereas the Swiss franc (+1.6%) increased in July pan’s economic situation the fourth straight month represents 3.2% (Bank for Interna- from previous month. Source: Cabinet Office, Minis- in July 2011 to 93. It al- tional Settlements). Moreover, the try of Economy, Trade and government of Japan would probably Imports rose 9.9% in July most recovered to Febru- Industry be reluctant to take a decision that year-on-year. Imports of ary production levels of could lead to negative reactions of foodstuffs, which soared 4.3% in July month-on- 97.9. The leading index of its trading partners”, Manabu Eto, after the earthquake dis- month. business conditions also JETRO Geneva Director General, said. aster due to demand for The domestic demand rose in July for the third substitutes, declined 6.0% also slightly recovered. straight months to 106.0 in July from previous The average of monthly (2005=100), marking an month. However, imports consumption expendi- increase by 2.6% from of raw materials increased tures rose 5.4% to previous month.

Inside this issue:

Japan’s current economic 1 situation

Otsuka’s office in Geneva 1 & 2 Otsuka’s office in Geneva promotes global health policies promotes global health poli- Founded in 1964 Otsuka creased 5.8% in FY 2010, rate social responsibility cies Pharmaceutical Co., Ltd. ending March 2011, from initiatives. It also ap- Coordinated banking action 2 (“Otsuka”) is the second ¥ 440.4 billion to ¥ 465.8 pointed Dr. Patrizia Carle- to protect EU banks largest Japanese research (see graph on next page). varo as the managing di- -based pharmaceutical In May 2011, it estab- rector of this Swiss sub- Japanese yen against weaker 3 currencies group. Otsuka Group has lished a subsidiary in Ge- sidiary. diversified businesses neva to promote the com- 2011 Month of Japanese 4 operations in 23 countries pany’s global tuberculosis (Continued on page 2) Culture will benefit to victims and regions around the program among other world. Its net sales in- public health and corpo- Page 2 JETRO Switzerland Newsletter

Otsuka’s office in Geneva promotes global health policies 500 80 (Continued from page 1) disease, ophthalmology 465.8 75 73.6 and dermatology. 450 440.4 70 Dr. Carlevaro has exten- Tuberculosis affects about 413.3 65.2 400 65 sive experience working 9 million people around 380.8 60 with international organi- the world and is responsi- 57.3 350 55 zations, having served the ble for the death of 1.7

50 UN Children’s Fund million people per year. So 300 48.9 45 (UNICEF) and the UN In- far, its medical treatment dustrial Development Or- requires a cocktail of drugs 250 40 FY 2007 FY 2008 FY 2009 FY 2010 ganization. She was also that patients have to take Net sales (billion yen) Operating income (billion yen) the Head of the Interna- for a six-month to two-year Financial situation of Otsuka tional Aid Unit at Lilly, a period. Failure to take the Pharmaceutical Co., Ltd. US-based pharmaceutical drugs correctly or adhere group. to this strict regimen has Dr. Patrizia Carlevaro, led to the spread of multi- International platform in Managing Director, Otsuka SA drug resistant forms of tu- Geneva berculosis (MDR-TB). generating increased pub- In addition, the disease is “Otsuka wants to build an lic awareness of TB diag- spreading in some devel- international platform to nosis and treatment oping countries, especially promote the company’s around the world and cre- among people who have global tuberculosis pro- ating partnership alliances HIV/AIDS. It has appeared gram and others. As an with NGOs, academics, again in some developed international and cosmo- scientists and many oth- countries, like Italy and the politan city, hosting a ers”, she further explained. United Kingdom. large number of interna- Otsuka just joined in June Tuberculosis is a neglected tional organizations, in- 2011 the International disease. Whereas few com- cluding the World Health Federation of Pharmaceu- panies carry out significant Organization, World Trade tical Manufacturers and research on this disease, Organization and a num- Associations (IFPMA). Otsuka has made research ber of Non-Governmental on tuberculosis a priority Organizations (NGOs), it Otsuka’s new drug against for over 30 years. It is to- makes sense to open the tuberculosis day recognized as the main office in Geneva”, Dr. Car- private funder of tuberculo- levaro said. Otsuka researches, devel- sis drug development. “Our objective is to help ops, manufactures and As a result, “Otsuka will develop a strategy for the sells pharmaceutical and soon bring on the market a promotion of Otsuka’s nutritional products. It fo- compound that will target global tuberculosis pro- cuses on the fields of the multi-drug resistant tuber- gram. This includes central nervous system culosis (MDR-TB) – one of launching public health (CNS), oncology, cardiovas- the most deadly and com- programs that will be sup- cular, digestive and respi- plicated forms of TB to ported by the company, ratory systems, infectious treat”, Dr. Carlevaro stated.

Coordinated banking action to protect EU banks Exactly three years after and to avoid fears of credit lions of US dollars into the Lehman Brothers col- crunch in the euro zone. European monetary sys- lapse, five central banks Bank of Japan, Swiss Na- tem. They will provide US- decided a coordinated tional Bank, European dollar loans at fixed inter- action to restore confi- Central Bank, Bank of Eng- ests in three auctions, first dence in the ability of EU land and US Federal Re- one taking place on Octo- banks to provide loans, serve will inject jointly bil- ber 12. Issue 30 Page 3

Japanese yen against weaker currencies Whereas Swiss National tary Fund). However, as have to keep in Japan their Exchange rates between global major Bank has set on Septem- Japanese public bonds core businesses, for exam- currencies ber 6 a minimum Swiss are mainly held by domes- ple their R&D department. 120 franc exchange rate to tic institutions and indi- limit its appreciation viduals, investors remain How to tackle this issue? 110 against the euro, the Japa- confident. For instance, nese yen continues to fluc- decision of rating agency BoJ is unlikely to take a 100 tuate and to appreciate. Moody’s to downgrade decision similar to SNB’s

Founded in 1871 to re- Japan’s government rating one. The yen is the third 90 place the Ryo, the value of from Aa2 to Aa3 on Au- most traded currency, af- the yen against the dollar gust 24, 2011, had little ter the US dollar and the 80 was fixed after the Second impact on financial mar- euro, accounting for 9.5% World War until 1973. De- kets. of the foreign exchange 70 spite several interventions market, whereas the Swiss of the Bank of Japan’s Challenges for Japan’s franc represents 3.2% (BoJ) and low interest economy (Bank for International 60 economy Jul Jul 11 Apr - Oct Apr - - Oct Jan Jan Jun Jun Aug Aug Aug Feb Feb Nov Nov Sep Sep Dec Sep Dec - Mar - Mar - - Mar - May - - - May ------6 - 5 8 2 3 8 2 20 27 27 13 13 19 22 17 16 31 Sep 10 24 14 15 29 22 16 30 11 25

rates, yen’s value rose in Settlements). Moreover, - Sep 2010 Sep - 28 the 1970s and 1990s, As Japan is an exporting the government of Japan 1 reaching a peak under 80 economy too, the low would probably be reluc- yen per dollar in April value of foreign curren- tant to take a decision that YEN/EUR YEN/CHF YEN/USD YEN/1000WON 1995. cies, especially ones of its could lead to negative re- Sources: Bank of Japan, Euro- main competing econo- actions of its trading part- pean Central Bank, Swiss Na- Against weaker currencies mies (Korea and China), is ners. tional Bank and Bank of Korea a serious issue for Japa- BoJ decided on August 29, In a context of sovereign nese exporters. According 2011, to inject additional debts crisis in the United to a survey carried out by ¥10 trillion liquidity into States and European Un- research firm Teikoku, the economy and to keep ion, and of financial mar- 12.6% of exporting com- key interest rate at 0.1%. Currency distribution of global foreign exchange market turnover Hong Kong dollar Swedish krone ket turmoil, the value of panies are expanding and The government of Japan 1.2% 1.1% Canadian dollar Other currencies 2.6% (less than 1% the dollar and the euro are setting up production sites also took actions to en- each) 10.2% Swiss franc 3.2% Australian dollar US dollar declining. The yen reached overseas in response to courage Japanese firms to 3.8% 42.4%

Pound sterling a 15-year high at about the strong yen. This study accumulate dollar-based 6.4% ¥76 per dollar on August also shows that 67.6% of investment funds and will Japanese yen 19, 2011. The yen is also companies see yen’s ap- provide incentives to pre- 9.5% high against the euro. preciation as unfavorable. vent relocation of activi- Whereas it was traded Large industrial groups ties. However, it will proba- over ¥169 per euro in July are also affected. For ex- bly not implement a large- Euro 19.5% 2008, it is nowadays example, Toyota Motor Corp. scale support program, Source: Bank for International changed at less than recently announced its since significant funds will Settlements ¥105 against the euro. decision to gradually in- serve for the reconstruc- This evolution remains crease its “Camry” production of the Tohoku region; nevertheless modest com- tion abroad to reduce its it would also be reluctant pared to the change that exposure to currency mar- to provide subsidies that occurred after 1973 and ket fluctuations. would only aimed at over- 1979 oil shocks. However, this issue can coming the strong yen In addition, the value of be challenged by a large challenges. the Korean won and Chi- number of Japanese Japan’s authorities have nese yuan (fixed rate firms, of which factories therefore no other choices against the dollar) remains are located outside Japan, than taking conventional very low against the yen. for example in China and measures to face this out- Unlike Switzerland, Ja- India. Nevertheless Japa- standing challenge. pan’s debt is very high - nese firms cannot relo- over 220% of its gross cate all their activities in Manabu Eto, JETRO Ge- GDP (International Mone- foreign countries: they neva Director General Issue 30 Page 4

2011 Month of Japanese Culture will benefit to victims 2011 Month of Japanese concert on September 23 Culture is being held from at Victoria Hall (Geneva). September 17 to Novem- Directed by Emmanuel ber 28. Entitled “Together Krivine, it gathered 48 tal- for Japan” (“Ganbarô Nip- ented musicians, including pon”), it encompasses famous cellist Gautier many events that will col- Capuçon. lect funds for the benefit Many other events will of victims of March 11 show Japanese calligra- Japan’s earthquake. phy, bonsai, pictures, mar- The purpose of this event tial arts and ikebana. is to provide an opportu- Some conferences will nity to learn more about also provide information Japan and its culture, and on exciting Japanese top- to facilitate exchanges ics, such as history of between Japan and Samurais. French-speaking part of Most of events are free; Switzerland. some of them require a The official ceremony will fair, on October 2, in Ca- reservation. take place on October 23 rouge. In addition to a flea at “Cité Bleue” (Geneva). market, kimonos will be Full program and details are Kabuki dance and Wa- available on the Website of the exhibited, traditional Japan’s Consulate in Geneva daïko drum will be per- dances and music will be at: http://www.geneve.ch.emb- formed. performed. japan.go.jp/mois2011/ JETRO Geneva will also Moreover, Geneva Interna- pro- take part in the Japanese tional Orchestra played a gramme_general_mcj2011.pdf

Agenda 2nd October: JETRO booth at Japanese fair Salle des fêtes (Community Hall), Carouge, from 1 pm to 8 pm.

JETRO is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world. Originally established in 1958 to promote Japanese exports abroad, JETRO’s core focus in the 21st century has shifted toward promoting foreign direct investment into Japan and helping small to medium size Japanese firms maximize their global export potential. 80, Rue de Lausanne 1202 Geneva The JETRO Switzerland Newsletter can also be viewed and/or Phone: 022/732 13 04 downloaded online: Fax: 022/732 07 72 http://www.jetro.go.jp/switzerland/newsletter E-mail: [email protected]