Terrie's Take 739 -- Nine Events in 2013 That Will Change Us, ebiz news from Japan

Mon Dec 16 08:50:12 JST 2013

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, Dec 15, 2013, Issue No. 739

+++ INDEX

- What's New -- Nine Events in 2013 That Will Change Us
- News -- Bain Capital to buy Macromill
- Web Content/Tech Job Vacancies
- Upcoming Events
- Corrections/Feedback -- Square, not Foursquare
- Travel Picks -- Volcanoes in Kanagawa, giant statues in Iwate
- News Credits

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+++ WHAT'S NEW

2013 has been the year of recovery of the Japanese stock market thanks
to a newly mandated and now emboldened conservative LDP government.
Thus this year's summary of key events revolves in around the role of
government intervention and the trends that such politically-driven
activity will have our businesses in 2014. In addition, we recognize
some technological breakthroughs that remind us that Japan is still a
source of innovation and technical excellence.

1. January -- Japanese battery technology vindicated

The Boeing 787 Dreamliner fires that were global news in 2012 and
early 2013 were found to NOT be caused by production problems at GS
Yuasa, the maker of the lithium batteries powering the aircraft. Once
the company was cleared of fault, everyone was left to wonder what
really happened. Our guess is that the aircraft's core electrical
design itself was to blame in some obscure way (for example, cabling
positioning causing induced high-voltage spikes) and so the actual
cause will never be found but seems to have been resolved by process
of elimination, or perhaps the cause was found but swept under the
carpet for political and economic expediency. Either way, no one got
injured and so we may never learn the true story.

Key to this story is the fact that as yet since there is no safe
alternative to lithium as a base for portable, dense energy storage,
and electrical systems developers all over the world will continue to
work with the material. This fact is being amply demonstrated by the
world's leading electric car brand, Tesla, which has had to fend off
several negative news events after drivers ran over objects on the
road, pulled over safely, but then the cars caught fire. Tesla seems
to have recovered from that negative publicity, and recently signed a
contract with Panasonic for the supply of two billion more lithium
batteries over the next four years. That's plenty to keep Panasonic's
battery division busy for a while...!

2. March -- Australia becomes Japan's largest source of LNG

With the ramp up of the West Australian Pluto gas project, Australia
overtook Qatar as the largest supplier of LNG to Japan, shipping 15.9m
tonnes in 2012. As a result, LNG is now one of Australia's largest
exports, worth AU$13.8bn last year. In all, Japan imported 87.3m
tonnes of LNG in 2012, up by more than 30% over pre-3/11 volumes, and
is expected to continue that pace until some number of its 54 idled
nuclear power stations are bought back online. The utilities are
consuming about 70% of Japan's LNG, which is a substantial drag on the
economy and on resources.

The trend here is two-fold: firstly that the hydrocarbon economy is
alive and well thanks to the nuclear power stand-off, so thank god for
the U.S. increased production of oil, taking the pressure off the
global markets, else Japan could be in real financial trouble.
Secondly, we find it strange and interesting that Abe's government, so
overbearing in other areas, has not rammed through nuclear power
station restarts. Is this because they are sensitive to a backlash
from the electorate? We don't think so, given their behavior over the
recent state secrets bill -- they will do what they have to do, no
matter how unpopular it is. So that leads us to think that there must
be a more strategic reason for leaving the nuclear power plants turned
off... great fuel for conspiracy theories.

[Continued below...]

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[...Article continues]

3. April -- First human trial approved for stem cells

Japan's Health Ministry approved the world's first clinical trial of a
revolutionary stem cell treatment to reverse macular degeneration. The
permission was given to researchers at the Riken Center for
Developmental Biology to start a trial in 2014 which will morph iPS
cells into retinal cells for six patients going blind from the
age-related disease. The research is being led by Masayo Takahashi,
who is a colleague of 2012 Nobel Prize winner for stem cell
development, Shinya Yamanaka.

The trial is just the tip of the iceberg for Japanese government
stewardship of stem cell treatments as a future specialty industry.
Separate media reports put the government's total allocation for the
further research and commercialization of stem cell treatments at
between JPY21.4bn and JPY118bn. Much of this cash is being fed into a
rising empire that Prof. Yamanaka is creating. Apparently he now has
20 teams focusing on different treatments, the results of each of
which will likely be spun off into separate companies.

4. May -- Massive data leak at Yahoo Japan shows weak defenses

Mid-month, Yahoo Japan, the nation's largest web portal by far,
admitted that they had found yet another data leak, this time on their
ID servers, which involved the probable disclosure of up to 22m user
account IDs. Although the IDs are publicly viewable anyway, they are
not available as a single mass file, which of course is likely to be
used by illicit email spam companies.

Perhaps more tellingly, this leak came just four weeks after another
more serious incident, where Yahoo Japan found a trojan on their
servers that was harvesting user data and preparing to send it out to
its creator. The company said that it caught the trojan in time, after
it had harvested about 1.27m accounts. While hacking into databases
happens all over the world, Japan seems particularly somewhat
nonchalant and vulnerable when it comes to hacking, and one wonders
when the nation's major providers will start to take the threat
seriously, especially now that China and Japan are at political
loggerheads over the Senkaku islands.

5. June -- Visa changes mark start of massive tourism increase

Rule changes announced by the Justice Ministry about tourist visas for
visitors from South East Asia seem to answer the question that Japan's
top tourism officials have been asking themselves: "Do we prefer a few
overstayers from SE Asia or the uncertainty and over-reliance on
China?" The fact that the Senkaku islands dispute seriously
interrupted yet again Chinese tourism in 2012 and 2013 means that
Japan by necessity needs to find fresh markets -- the so-called
China-plus-one strategy that until now only applied to manufacturing.

The good news is that since the visa requirements were eased in July
(visas were extended from the existing 15 days to open multiple-entry
stays), the number of visitors from those beneficiary countries has
soared. The countries were Thailand and Malaysia for now, and from
next year, will most likely also include Indonesia and Vietnam. The
number of Thais entering Japan, for example shot up by almost 100%
over the second five months of this year, giving an aggregate increase
for the whole year over 2012 of almost 70%. Not only are the Thais
less threatening than the Chinese, but they are also more likely to be
repeat travelers, simply because the climate and economic differences
are so much more marked than those with China.

Our own www.japantravel.com business has taken good note of the
developing flows from SE Asia and set up its own office in Bangkok in
October. The target is to work with the local Japan fan base and build
a solid community there to influence more people to come to Japan for
their holidays.

6. July -- Softbank continues to build a global mega-brand (and debt to match)

Early July the FCC cleared the way for Softbank to take over Sprint
Nextel, the USA's third largest phone carrier. The merger cost
Softbank US$21.6bn, saddling the Japan headquarters with a massive
amount of new debt, but at the same time vaulting Softbank to become
one the largest carriers on the planet. Softbank's Mr. Son first
announced his offer to take over Sprint in October 2012, but then had
to overcome competition from Dish Network, which added an extra
US$1.6bn to the price tag. Recent commentary has been that Mr. Son has
personally taken control of reorganizing his new prize, and is
spending a significant amount of time in the States to "Softbank-ize"
the business and its product offerings. Will be interesting to see how
he looks to shake up the market and more importantly whether he can
pull Sprint out of the slump it had been in.

7. August -- Nothing like doubling down when things are looking hopeful

In the middle of summer we were greeted with the depressing news that
the nation's public debt had hit a number never used before by a
first-world nation -- one quadrillion (yen). In case you needed
reminding, that means "one thousand trillion". And we thought that a
trillion was a lot...! Another way to visualize this level of debt is
that it represents a debt of JPY7.92m (US$79,000) for each man, woman,
and child in Japan. Given that about 30% of Japanese don't have any
savings, you can increase that number to about JPY13m for those who
actually do have some savings put aside.

We suppose that the Abe government imagines that they can inflate the
real value of this debt away, and certainly there is some truth to
that -- IF Japan is allowed to keep sinking its currency. Just this
week, the yen hit a 5-year low of JPY103-US$1, however, there is a
high chance that world events and jealous neighbors will change this
status quo in 2014. Also, there is the disconcerting fact that the
government is going to double-down for next year and increase the
budget (and debt) even further. Where is all the money going? Mostly
on social security and healthcare for the aged -- both areas that are
begging to be seriously pruned over the coming 2-3 years.

8. September -- Sharing fingerprints is thin edge of wedge

It may seem innocuous enough -- an announcement that the police and
immigration authorities of both the USA and Japan are going to share
fingerprint data on about 85m people. After all, whatever makes us
safer is good isn't it? While the basic sales point to the public has
been anti-terrorism, and thus public safety, we can't help wondering
if there isn't a bigger cross-border plan going on? Especially in
light of this month's (December's) ramming by the LDP of the new state
secrecy law through parliament. The Abe government made it pretty
clear that they were pushing the security bill through so that they
could remain trusted allies of the USA -- a particularly pressing
relationship given the recent sabre rattling in the region by China.

If you look at all the tax, immigration, and military information
sharing measures that have been going on recently, Japan appears to be
buying itself a permanent stake in the U.S.
military-government-business hemisphere, a stake that will be
completed when/if TPP gets done. Not to say that this is surprising or
necessarily so bad, just that the previous government, the DPJ, kind
of had the Japanese thinking that they were their own boss. Abe is
certainly making it clear to all citizens that this is not the case.
Unfortunately for him, the state secrets bill is opposed by 80% of the
adult population and even the LDP Secretary General is unsure who will
be affected by the new law -- something that news media organizations
and their journalists are particularly unhappy about.

9. November -- Backtracking on reforms stimulates law suit

It is no coincidence that our last major event to influence us in 2013
and beyond is again a government-related one. In this case, the Abe
government's inaction over the backtracking of Kasumigaseki's
bureaucrats on online business reform. As readers may remember,
earlier this year, an appeals court found that the Health Ministry ban
on the online sales of most OTC drugs was unfair and that online sales
should be allowed. This was very welcome news for Rakuten subsidiary,
www.kenko.com, which lost a substantial amount of its sales after the
OTC drug sales were suspended previously.

Unfortunately the relaxation of the ban didn't last long, as the
Health Ministry came to the rescue of pharma's vested interest groups
by passing fresh rules banning online sales of drugs. Rakuten's big
boss, Hiroshi Mikitani, got really upset about this arrogant treatment
of the sector and threatened to withdraw from PM Abe's showcase
reforms advisory team. Now, Mikitani's subsidiary, Kenko.com is going
to sue the Health Ministry on the basis that its ban is
unconstitutional -- which it probably is. What we have here is the old
guard versus the new guard: a trend that can only pick up pace as
younger entrepreneurs prove to be essential to the nation's financial
health, through their ability to improve efficiencies and conduct
business abroad and so produce taxes at home.

**************

This is our last Terrie's Take of 2013. It's been an interesting year,
and we hope that you will stay with us in 2014, as Japan either stands
ready to escape 20 years of economic stagnation or falters under the
burden of the soon-to-be-increased consumption tax. We will be back on
January 12th, an extra week later than our normal two weeks off,
because of the way the holidays fall this year. We hope that everyone
has a great Year-end break.

...The information janitors/

----------- THAI'S NEWEST DESTINATION - SENDAI ------------

On December 3, 2013, THAI launched flights to Sendai, direct and
non-stop from Bangkok. Sendai is the capital city of Miyagi
Prefecture, situated in the heart of the scenic Tohoku region. THAI's
new flights now operate non-stop from Bangkok every Tuesday, Thursday
and Saturday, with TG680 departing Bangkok at 23:59 and arriving in
Sendai at 07.55 on the following day. The return flights operate on
Wednesday, Friday and Sunday, with TG681 departing Sendai at 10:30 and
arriving in Bangkok at 15.40.

For ticket reservations, please visit www.thaiairways.com or call
THAI's Japan desk at 0570-064-015, or the international Contact Center
at +66-02-356-1111.
---------------------------------------------------------------

***------------------------****-------------------------***

+++ NEWS

- Budget to hit record JPY96trn in 2014
- Defense spending to hit JPY24.6trn
- Foreign inbound traveler numbers to exceed 10m for 2013
- Bain Capital to buy Macromill
- Little action on foreign home helpers

=> Budget to hit record JPY96trn in 2014

Talk about doubling down, the Abe government continues its merry
tradition of spending future generations' income by continuing to run
huge budget deficits, a situation that doesn't look like it will stop
anytime soon. The Finance Ministry is forecasting that the government
will require a record JPY96trn (US$917bn) budget for 2014, about
JPY340bn more than this current year. In stark contrast, the
government's anticipated tax revenue will be around JPY50trn, meaning
the remainder will be added to the national public debt as borrowings
of one kind or another. (Source: TT commentary from asia.nikkei.com,
Dec 14, 2014)

http://bit.ly/19KK6fj

=> Defense spending to hit JPY24.6trn

One of the areas slated for increase in the new government spend-up in
2014 and the following four years is defense, and the government has
put in a budget request to the Finance Ministry of JPY24.6trn, an
increase of JPY1.2trn over the current annual spending. Most of the
money will apparently go on U.S.-sourced technology, such as Osprey
transport aircraft, Global Hawk drones, F-35 stealth fighters, and two
new Aegis ships with ballistic missile-killing systems. (Source: TT
commentary from asia.nikkei.com, Dec 13, 2013)

http://bit.ly/194JI0H

=> Foreign inbound traveler numbers to exceed 10m for 2013

For the first time ever the number of foreign travelers to Japan is
expected to exceed 10m people. A JNTO report released two weeks ago
reported that by the end of November, the tally was already at 9.5m
visitors, making the 10m target a likely shoe-in. The JNTO says that
it thinks yen weakness coupled with eased tourist visa restrictions
for some SE Asian countries are the main reasons for the increased
numbers. The biggest gainers in terms of origin were Thais, up 69.1%
from 2012, to 397,600 people, Vietnamese, up 53.5% to 79,300 people,
and Indonesia, Malaysia, and Singapore, all up more than 30% each. The
total tourist spending in 2012 was estimated at JPY1.09trn, a number
which will probably increase by more than 15%-20% this year. (Source:
TT commentary from ajw.asahi.com, Dec 12, 2013)

http://bit.ly/18NU7LC

=> Bain Capital to buy Macromill

Japan's largest online market research company, Macromill, has become
the target of an M&A offer by Bain Capital Partners of the USA. Since
Macromill is publicly listed, the offer was made to all shareholders,
but the largest two, Macromill's Chairman/President, and Yahoo Japan,
have apparently already agreed to accept the JPY786 per share -- so
it's a done deal. Shares had previously been trading at around
JPY650/share, giving shareholders a decent 20% premium. ***Ed: Having
pioneered the concept of online surveys in Japan, Macromill has about
2.5m respondents in its database, but has been feeling a lot of
pressure domestically from literally scores of competitors offering
lower prices and more niche user segmentation.**  (Source: TT
commentary from research-live.com, Dec 12, 2013)

http://bit.ly/1dCxnhA

=> Little action on foreign home helpers

Ever since the American Chamber of Commerce in Japan released a
recommendation in June for the Abe administration to relax the rules
on families earning more than JPY7m/year to be able to employ foreign
home helpers, particularly helpers from the Philippines, there has
been little-to-no action by the government. Apparently home helpers,
either Japanese or foreign, make up just 0.1% of the work force (about
60,000 workers), while in the USA the number is 0.5% and in Hong Kong
it is a whopping 7.7%. Estimates are that if Japanese wives were able
to return to the workforce with the help of home help, at an 80% work
force participation rate (i.e., the same as for men), their presence
would increase Japan's GDP by 14%. (Source: TT commentary from
reuters.com, Dec 12, 2013)

http://reut.rs/1cujoYY

NOTE: Broken links
Some online news sources remove their articles after just a few days
of posting them, thus breaking our links -- we apologize for the
inconvenience.

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get free rewards in return from www.JapanTravel.com, the leading
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Japanese food, T-shirts and even plane tickets. Whether sipping coffee
at a cafe, hiking a secluded mountain, or visiting an electric
festival, JapanTourist is the best place to relive your experiences
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information and to read the thousands of articles written by
contributors.

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-----------------------------------------------------------

***------------------------****-------------------------***

+++ WEB CONTENT/TECH VACANCIES

=> Are you in web content or engineering? If so, this section is for you.

** HIGHLIGHTED POSITION

- Japantravel.com Regional Sales Partners

If you live outside Tokyo, have an interest in selling media and
online tourism services and are bilingual (i.e., strong Japanese
required) then we have part-time and full-time positions for suitable
candidates. Our target clients are local governments, major regional
companies, and tourism operators. Each Sales Partner receives the sole
right to represent their region, and receives support from the Tokyo
office to convert promising leads. The position is open to anyone with
sales experience or the ability to sell. Initial contracts with
non-experienced candidates are a no-retainer, commission-only
arrangement, however, promising candidates will have the opportunity
to move to retainers. Visa sponsorship may also be a possibility for
the right person. Friendly team, interesting technology, incentivizing
commissions are all part of the opportunity. Please send your resume
to info at japaninc.com.

** OTHER MEDIA POSITIONS VACANT

- Bilingual account manager for major tourism portal
(www.japantourist.jp), JPY3M - JPY5M
- Bilingual sales trainee for web media properties, JPY2.5M-JPY3M +
10% commission
- English-only experienced PHP Zend software developer, 5 years
experience, JPY3.5M - JPY5M

Interested individuals may e-mail resumes to: jobs at metroworks.co.jp.

-----------------------------------------------------------

***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

---------------- Start a Company in Japan -----------------

Entrepreneur's Handbook Seminar 15th of February, 2014

If you have been considering setting up your own company, find out
what it takes to make it successful. Terrie Lloyd, founder of over 17
start-up companies in Japan, will be giving an English-language
seminar and Q&A on starting up a company in Japan.

This is an ideal opportunity to find out what is involved, and to ask
specific questions that are not normally answered in business books.
All materials are in English and are Japan-focused.

For more details: http://www.japaninc.com/entrepreneur_handbook_seminar
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

=> Many thanks for the readers who wrote in pointing out that our
TT738 news item on credit card readers that attach to smart phones,
are made by Square, not Foursquare -- although both are Jack Dorsey
investments.

***------------------------****-------------------------***

--------- "Operation Philippines" Disaster Relief ---------

The Japan Emergency Team announces "Operation Philippines", its 89th
Disaster Operation since 1989 when the team was formed by 38 students
from Tokyo`s Chuo University. Typhoon Haiyan is the strongest Typhoon
to hit the Philippines. There have been over 5,000 confirmed deaths
and more than 11 million people have been affected by the disaster.

The team and partners are on the ground and are urgently requesting
emergency supplies including canned and instant food, powdered milk,
bottled water, tents, sleeping bags, used tablet and laptop computers,
towels, soap, shampoo, home medical kits and donated airline miles for
team members to travel to the area. In addition, individuals able to
spend a minimum of three days are asked to contact the team for
information on being a volunteer on site.

Cash donations can go to: Postal Furikae 00160 7 162438 Nihon Kinkyu
Enjotai, while supplies, airline miles, and other donations and
enquiries can be initiated by contacting team at jhelp.com.

-----------------------------------------------------------

+++ TRAVEL DESTINATIONS PICKS

=> Owakudani Volcanic Area, Kanagawa-ken
Feel the earth breathing

Hakone's prime tourist destination is Owakudani valley -- known for
its sulphurous fumes and volcanic springs. Whilst the fumes create the
illusion of cloud cover, you are really only 1,000 meters above sea
level. There are many ways to reach Owakuni, the easiest of which is
to take a local train to Gora then the Hakone Ropeway (cable car).
Another way is to get the bus to Souzan station and then the Ropeway.
Conveniently, some resorts, such as Ryokan Goaikan, are located right
next to Souzan station.

The Ropeway is an experience all in itself. You get a panoramic view
of the mountains and if you are lucky, a view of Mt. Fuji. The ride
from Souzan station to Owakudani station is 8 minutes long and costs
around ¥1,400 for a return ticket.

Owakudani, also known as the great boiling valley, originated 3,000
years ago when Mt. Kamiyama erupted and collapsed. Even today there
are traces of the volcanic eruption, including the steam-spewing vents
that burst forth with clouds of hydrogen sulphide. Be warned that this
area closes frequently when the volcanic gas outbursts are too strong.

http://bit.ly/194Rjwe

=> Giant Wooden Statue of Bishamonten, Iwate-ken
Japan's largest standing wooden statue of Bishamonten

Kumano Shrine Bishamondo is home to the largest wooden statue of
Bishamonten, the God of War, in Japan. It was designated as an
important cultural asset in the 1970's and was moved at this time from
the former wooden Bishamondo hall, which dates back to the medieval
period when the statue was originally installed, to the current
exhibition hall. This shrine has stood for more than 1,000 years and
is located in the country hills outside of Towa City in Iwate-ken. It
guards temple secrets and items of interest in its ancient precincts.

http://bit.ly/1cukXpQ

***------------------------****-------------------------***

***********************************************************
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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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