A New Japan: Globally Oriented
Total Page:16
File Type:pdf, Size:1020Kb
J APAN A new Japan: globally oriented As Japan hosts the 42nd G7 Summit on 26-27 May, the “Abenomics has improved the circula- “The growth of our stock prices has country will be eager to show the international com- tion of the domestic business market been significant. We were able to achieve munity how – following the impetus of Prime Minister as well, and the effect of the weakening an equity finance of 100 billion yen ($845 yen has increased Japanese exports.” million), which is something absolutely Shinzo Abe’s so called ‘Abenomics’ – it is finally em- Nobuyoshi Fujisawa, President and unthinkable for a company of our scale. bracing globalization and becoming more open than CEO of J Trust Group, a financial services Thanks to this, we were able to get our ever before. It is a mindset supported by a new wave provider with activity throughout South- hands on funds that allowed us to pre- of outward-looking Japanese companies striving to east Asia, says that thanks to the govern- pare for further global operations. It was seize opportunities abroad and develop the brand of ment’s economic strategy the group’s all a direct benefit of Abenomics.” stock prices have shot through the roof this new Japan through their products and services. and created the conditions for the compa- Finance - The driving force ny to go global. “It created a very rapid rise behind Abenomics Since Prime Minister Shinzo Abe came companies have seized the opportu- in stock prices and a significant weakening Companies like Mitsubishi UFJ Financial to power in 2012, launching his epony- nity and begun to expand abroad. As of the yen. These two things happened Group (MUFG) have introduced U.S.- mous economic strategy ‘Abenomics’, the the country prepares to host the 42nd G7 in a very short period. Within two years, style management structures and hired country has submitted itself to a modern Summit in May, gathering an elite group stock values doubled and the yen weak- international directors. Nobuyuki Hirano, makeover ― and not a moment too of the globe’s biggest economies at one ened to two-thirds of what it was. This had the President and Group CEO, says Ja- soon, say the country’s top bankers and of the world’s most important geopolitical a huge impact on Japan,” he says. pan’s financial industries are a mirror businessmen. In fact, weighed down events, participants and global observers by two decades of deflation, Japanese should prepare themselves to revise their industry leaders have happily embraced views. The message will be clear: this is Evolution of the Japanese economy this internationalization push. Indeed a new, more open, more international- many argue it was long overdue. minded Japan ready to come of age and 540 Prime Minister Abe’s plan has been finally grab globalization with two arms. radical but effective: spend money Hirokazu Onoe, President of GLORY, ($100 billion), increase stimulus and a global leader in the manufacturing of 520 improve business friendliness. But this money handling machines and systems, shift has been as much a change in glob- explains how this new outlook has 500 al mentality for the Japanese as a shift in washed over Japan’s private sector. globally oriented economic policies. “Abenomics was an attempt of A massive bond-buying program by Prime Minister Abe to take Japan out of 480 the Bank of Japan saw the yen plum- the economic crisis. I believe the strate- met and domestic debt levels soar. But gy really matched the needs of the busi- lo and behold, Japanese exports have ness community and provided various 460 since boomed, unemployment dramati- opportunities for Japanese businesses.” 2006 2008 2010 2012 2014 Trillion cally decreased and wages have gone up Mr. Onoe also duly points out that Constant prices Current prices yen for the first time in two decades, while a in 2014 many Japanese corporations new wave of outward-looking Japanese posted their best financial results ever. Source: Thomson Reuters Datastream, Jan 2016 that reflect the national economy. “In that The third arrow sense, in the past two and a half years All well and good, says Masayuki Oku, since the inauguration of Prime Min- Chairman of Sumitomo Mitsui Financial ister Abe, we have felt the significantly Group, but is it sustainable? He says that positive impact of the implementation of all depends on how the Prime Minister Abenomics and witnessed a quite visible shoots the third arrow from his quiver ― change in the private sector.” his growth strategy. “Business has become Mr. Hirano says that over the past two very active and corporate performance has decades, business leaders were conserva- registered record breaking profits. Wages tive in the face of the deflationary environ- have increased and we have near perfect ment. They reshaped their balance sheets employment. A full exit from the deflation by streamlining excessive manpower, pro- that has plagued us for the past 20 years duction facilities and debt levels. In short, is nearly at hand. But the question is if it is they moved from a growth-oriented stance sustainable. This makes the growth strat- to a defensive posture. Due to the recent egy a very important arrow,” he says. dramatic changes in the financial markets, Bank of Tokyo’s Nobuyuki Hirano their mindset has been radically changed. “Corporate gov- “Within two years, agrees. He says without the third arrow, “They started making investments ernance has been stock values doubled. and the economic, industrial, social and overseas. In the earlier stage, they were strengthened and This had a huge im- labor market reforms that accompany it, still not quite confident in the real recov- Abenomics will not achieve its initial aims. ery of the Japanese domestic market. But return on equity has pact on Japan. Thanks Internationalization, after all, is a two-way it was clear for them that if they did noth- benefited from Abe- to this, we were able street. As Japanese companies move to ing, the industry would simply decline nomics’ growth strat- to get our hands on increase their holdings and activity abroad, and its competitiveness would gradually egies, both of which funds that allowed us the country must also prepare to open its lose meaning. They would not have the are stimulating the to prepare for further own doors wider. This is even more critical opportunity of growing in the future so given President Obama’s recent decision they started investing overseas,” Mr. private sector. This global operations. It to fast track the Trans-Pacific Partnership, Hirano says, adding that his bank has has been good for the was all a direct benefit comprised of 12 Pacific Rim countries. “I strongly supported these ventures. financial institutions.” of Abenomics.” am quite sure these reforms will add big “Then Japanese households momentum to the Japanese economy. The changed their mindset too. They Yasuhiro Sato, Pesident and CEO, Nobuyoshi Fujisawa, deregulation of different industries, includ- were sitting on almost zero interest- Mizuho Financial Group Pesident and CEO, J Trust Group ing the healthcare, agriculture and energy sectors, will mean a strong revitalization of bearing savings deposits. During the days the Japanese economy,” says Mr. Hirano. of deflation, this was the best performing Takashi Goto, President and CEO financial instrument. So rather than in- of Seibu Holdings, a leading real estate vesting into emerging market currencies, group and name behind the interna- project finance or equity, households tional Prince Hotel chain, believes the were satisfied with simply sitting on the growth strategy will take time to fully liquid-adjustable accounts. But now, peo- implement. “Japan has made drastic ple have begun to understand that defla- changes to recover from what we lost in tion is over and they have started looking the last 20 years. I have a high opinion at a more diverse scope of financial prod- of what Abenomics has achieved and ucts. I strongly believe that if we continue will yet achieve. I believe Japan is in the to make the current efforts and push the middle of a paradigm shift, that’s what I current policies forward, the Japanese tell my employees all the time,” he says. economy will regain its strength.” Mr. Goto believes that a renewed Yasuhiro Sato, President and CEO of focus on tourism in particular will help Mizuho Financial Group, Japan’s third- this shift along. “The major goal of all biggest bank by market value, agrees that this has been to leave the last 20 years Abenomics has helped Japan leave the behind us, and to strengthen our will to deflationary mindset behind. “Because open up to the international commu- of the stock increase, confidence in the nity, not only in the private sector, but in future has grown so we are more active. the public arena as well.” We are spending more on future growth. With Abenomics having translated into That’s a big change that must be credited relaxed visa requirements for Asians, a to Abenomics. Of course, it is a good thing move which has increased annual tourists for the banking industry because as long by nearly five million people, those attend- as the client has faith in the future, they ing the G7 Summit in Mie Prefecture this will use their money, they will take action May will join the ranks of swelling visitor and the economy will grow. Corporate numbers. In the spirit of Abenomics, Mie governance has been strengthened and Governor Eikei Suzuki is hoping the event return on equity has benefited from Abe- will draw the world’s attention to his pre- nomics’ growth strategies, both of which fecture.