Thanks, Jesper, for this insightful piece and for clarifying your use of the term Kamikaze. Being the son of an Imperial Japanese Navy Special Attack Force pilot who was never given the order to embark on his deadly mission, the distinction is impotant. But I digress; I agree that greater corporate metabolism, i.e more changes of management control, can only be a good thing. It would be important in this context that disposals of non-core or underperforming businesses/subsidiaries by Japanese corporate groups become more prevalent, more so that acquisitions of overseas targets. Japanese management, to date focusing more on buying well, have to become better sellers for the benefits of metabolism to kick in properly.
Thank you, Nakajima-san — yes, the reluctance to let go of legacy-proud but non-core assets is essential for rising capital returns, but also employee motivation and happiness - 窓際族 are neither happy, nor motivated, nor an inspiration to the young ; many cheers ;-j
In December, I wrote a piece which touches on Japan's BoP and some key economic + political implications (There is so much going on!) I thought I would share it here, in case it's of interest.
Such an overwhelming amount of information.. thank you.. negative and positive.. ( Sadly I need to read this a few times! ) I’m not feeling positively about Trumpenomics or the freaking feeling we are becoming the United States of Russia..or China or? And we’re only 3 weeks into this chaos..unfolding daily..
1) Demographics? You mentioned the disparity between China and Japan in terms of the number of people working full-time in R&D. Won't it be difficult to maintain even the current level, given long-term demographic trends in Japan?
2) The Political Will of the Typical Japanese Person: It seems that the LDP's policies and tendency to take hawkish positions on the global stage are out of sync with the typical Japanese citizen (not necessarily a voter). If Trump 2.0 does in fact encourage the seemingly long-stifled animal spirits, that would be good for Japan, but I don't get the sense that this is likely. Trust-fund babies don't typically behave that way. Please provide more evidence for your view.
Thank you Mark — spot on with the demographics. Key will be whether all those bright-button scientists from AsiaPacific now earnings their PhDs in Japan will actually get integrated into Japan Inc….and yes, the Animal Spirits may stir louder amongst my little circles, but I’m happy to bet they’ll come through the end: they crushed Die Mannschaft in the last World Cup, desho? ; many cheers ;-j
What about the political angle? Would this greater economic distancing from the US also create the space for the Japan constitution to start to distance itself from the American-drafted text?
Interesting — the whole constitution debate, in my view, is a high profile and useful distraction — Nakasone’s “settlement of post war accounts” is in full swing and you’re right : the constitution will be the end-point ; many cheers ;-j
Thanks, Jesper, for this insightful piece and for clarifying your use of the term Kamikaze. Being the son of an Imperial Japanese Navy Special Attack Force pilot who was never given the order to embark on his deadly mission, the distinction is impotant. But I digress; I agree that greater corporate metabolism, i.e more changes of management control, can only be a good thing. It would be important in this context that disposals of non-core or underperforming businesses/subsidiaries by Japanese corporate groups become more prevalent, more so that acquisitions of overseas targets. Japanese management, to date focusing more on buying well, have to become better sellers for the benefits of metabolism to kick in properly.
Thank you, Nakajima-san — yes, the reluctance to let go of legacy-proud but non-core assets is essential for rising capital returns, but also employee motivation and happiness - 窓際族 are neither happy, nor motivated, nor an inspiration to the young ; many cheers ;-j
Thank you Jesper, always thought-provoking!
In December, I wrote a piece which touches on Japan's BoP and some key economic + political implications (There is so much going on!) I thought I would share it here, in case it's of interest.
https://www.eastasiastocks.com/p/japan-vs-big-tech
Great little analysis you wrote - thank you
Such an overwhelming amount of information.. thank you.. negative and positive.. ( Sadly I need to read this a few times! ) I’m not feeling positively about Trumpenomics or the freaking feeling we are becoming the United States of Russia..or China or? And we’re only 3 weeks into this chaos..unfolding daily..
Gosh, it’s been three weeks? Feels like three years…many cheers ;-j
Wish it was 4 years and done!
Thank you for another thought-provoking article.
2 things:
1) Demographics? You mentioned the disparity between China and Japan in terms of the number of people working full-time in R&D. Won't it be difficult to maintain even the current level, given long-term demographic trends in Japan?
2) The Political Will of the Typical Japanese Person: It seems that the LDP's policies and tendency to take hawkish positions on the global stage are out of sync with the typical Japanese citizen (not necessarily a voter). If Trump 2.0 does in fact encourage the seemingly long-stifled animal spirits, that would be good for Japan, but I don't get the sense that this is likely. Trust-fund babies don't typically behave that way. Please provide more evidence for your view.
Thank you Mark — spot on with the demographics. Key will be whether all those bright-button scientists from AsiaPacific now earnings their PhDs in Japan will actually get integrated into Japan Inc….and yes, the Animal Spirits may stir louder amongst my little circles, but I’m happy to bet they’ll come through the end: they crushed Die Mannschaft in the last World Cup, desho? ; many cheers ;-j
All valid points! I'm also rooting for the home team (Japan).
What about the political angle? Would this greater economic distancing from the US also create the space for the Japan constitution to start to distance itself from the American-drafted text?
Interesting — the whole constitution debate, in my view, is a high profile and useful distraction — Nakasone’s “settlement of post war accounts” is in full swing and you’re right : the constitution will be the end-point ; many cheers ;-j