Terrie's Take 883 - Olympics Make a Great Excuse (Gaiatsu) to Get Stuff Done, e-biz news from Japan

Terrie's Take terrie at mailman.japaninc.com
Sun Feb 12 23:01:06 JST 2017

* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term 
technology and media entrepreneur living in Japan. 

General Edition Sunday, February 12, 2017, Issue No. 883

- What's New -- Olympics Make a Great Excuse (Gaiatsu) to Get Stuff Done
- News -- Olympic standards push Tokyo to ban smoking
- Upcoming Events - KEA event in Tokyo
- Corrections/Feedback -- Drunk Foreign Bike Riders?
- Travel Picks -- Traditional home stay in Ota-ku, Ishinomaki fish 
market is Japan's largest
- News Credits

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Japan is a hardcore smoking country, where one of its biggest companies 
(No. 17) is a partly government-owned (33%) tobacco firm, Japan Tobacco, 
and where almost 20% of the adult population still smokes - the idea of 
a citizen's right to smoke is firmly entrenched and permitted. As a 
result, for decades those of us who are not smokers have learned to 
limit our nights out on the town so as to avoid dry cleaning bills the 
next day, after clothing starts to smell like a cigarette. And telling 
smokers in sashimi restaurants to "butt out", something that would seem 
commonsense around fresh fish, will still earn you a telling off from 
the proprietor for being rude to the smoker...!

So it's a huge and very welcome surprise that the government may ban 
public smoking in enclosed spaces such as bars and restaurants, as early 
as next month (March, 2017). There has been a hue and cry by proprietors 
who are more concerned about financial losses caused by disgruntled 
patrons not staying back late in the evenings, than for their own 
employees' health. In fact, normally such a radical idea, banning 
smoking, would be inconceivable in Japan and public push back would see 
whatever policy balloon was floated get popped.

However, the local bar owners are up against something psychologically 
much bigger than their votes are worth - "Gaiatsu", or foreign pressure.

On the face of it, the Health Ministry's plan to submit legislation to 
ban public smoking comes from Tokyo trying to catch up with public 
standards elsewhere in the world, and particularly due to urging from 
the World Health Organization (WHO) and the International Olympics 
Committee, which have both called for a "healthy" Olympic Games. In 
other words, this sweeping legislation stems not from reasoned Japanese 
policy that smoking is bad for everyone's health (the smoker and those 
near by), but because foreign pressure makes it unavoidable.

This is a classic example of gaiatsu, and how it is used by Japanese 
politicians to push through unpopular policies that they think will be 
for the greater good in the long run. In this case, a smoking ban will 
presumably push down the smoking rate for Japanese men in particular, 
now about 30% of adult males (females are at 10%), and thus reduce the 
soaring medical bill which is threatening to cripple Japan financially 
as the Dankai generation (Baby Boomers) experience increasingly higher 
hospitalization rates.

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[...Article continues]

This is not the first time that gaiatsu has been used to introduce major 
reform. Indeed, it has been around since at least the Meiji era 
(1868-1912) as a policy tool, and is a valuable resource when Japanese 
political internal feuding creates an impasse. Some examples of Gaiatsu 
that induced major change in the last 30 years include:
* The Plaza Accord, resulting in a huge yen revaluation and which had a 
huge influence in creating the stock market bubble of the late 1980's
* The 1994 Daiwa implosion caused when a U.S. court closed the company's 
operations there for fraud and which eventually led to increased 
financial fear back home and partly contributed to the 1997 Asian 
Financial Crisis (Japanese banks pulled loans to SE Asian countries)
* The 9/11 attack in America leading to Japan adopting U.S. systems and 
processes for monitoring and controlling its citizens (welcome to "My 
Number" cards and immigration data sharing)
* And now Trump and his demands on Japan to bring jobs and investment 
back to the USA.

You'll notice there is a pattern here, in that almost all these external 
pushes came from the U.S.

There have of course been external pushes of a different kind, with the 
Kobe and Tohoku earthquakes (and especially the Fukushima nuclear 
disaster). In a way you could consider these as a form of gaiatsu as 
well, because as external events they precipitated action (or 
replacement) by the government of the time that was otherwise hogtied by 

There is a very good paper about gaiatsu and why it's so important to 
Japanese public policy evolution, produced 20 years ago (1997) by 
Aurelia George Mulgan while a professor at the University of New South 
Wales, and which is still a good reference today. She very accurately 
defined why gaiatsu is so necessary, and without it how Japanese 
governments become powerless to make decisive policy...


On governments being hamstrung, Mulgan observes [Ed: edited by us], 
"Japan has been called 'the leaderless state' with outside pressure 
filling the leadership gap. The top contenders for power all seem to 
have crucial inter-dependencies that prevent any one group from assuming 
predominance over the rest. Leadership is shared amongst a group of 
players, which makes it difficult for any single actor or group to 
assume the policy initiative. At the theoretical apex of power stands 
the Prime Minister, but his primary role is to serve as a mediator in 
balancing power and interests among factions."

She further goes on to say what gaiatsu is: "Gaiatsu has been a 
prominent feature of Japan's relations with other state-actors and 
institutions in the international system. Gaiatsu is always accompanied 
by a demand or request [Ed: by other states] that Japan change in some 
way. Japan exhibits a repetitive pattern in which the national 
government delivers policy change in response to a specific set of 
demands from external actors. The implications of these external demands 
and requests for existing policies in many instances have been fairly 

Yes, "profound" is probably an understatement, if we view the 
connectedness of the Plaza Accord in 1986 and the reverberations not 
only in Japan but around Asia even now, the changes have been deep and 
long-lasting. With the Plaza Accord, at the time the U.S. simply sort to 
limit Japan's exports by making them more expensive. In the following 
year the yen almost doubled in value and as a result, Japanese companies 
rapidly moved production elsewhere in Asia, particularly China. Thus the 
seeds were sown for a China boom, Japanese financing of infrastructure 
through Asia, and the Asia-wide diversification of U.S. economic 

To be fair, PM Abe on his second tour of duty has shown a lot more 
forceful leadership than any other Japanese PM in the last 30 years, 
both by fortune (previous government's inept handling of the 3/11 
disaster) coupled with no-doubt strong behind-the-scenes arm-twisting 
from the U.S. and other international players. As members of the public, 
we don't really see the gaiatsu that Abe and his government are probably 
under, but you can easily see the signs if you look. Japan's surprising 
policy shift on Quantitative Easing in 2013, for example, is surely a 
coordinated move not of domestic origin.

We believe that there will be many more sweeping changes made in 
Japanese governance over the next 3 years (the Olympics will be the God 
of Gaiatsu until 2020). In the travel industry, we have the upcoming 
Minpaku, or "Airbnb law", which will allow members of the public to 
offer bed-and-breakfast services without a license. This rule change may 
hurt hoteliers a bit, but more importantly it will put large amounts of 
spending money directly into the hands of householders all over the 
country. This will have a strong societal benefit and be one of the 
elements that will help kickstart the Japanese economy. We're sure that 
this point is not lost on the government. Once the Minpaku law is in 
effect, other hurdles to the sharing economy will fall quickly as well.

Further afield, other global trends that are already being allowed to 
penetrate Japanese thinking include: a further raising of the pension 
age, greater military readiness and assertiveness, academic realignment 
to the sciences, driverless vehicles and delivery drones, ethics changes 
in regenerative medicine, cross-border taxation, and many other elements 
that will affect our lives profoundly.

...The information janitors/


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+++ NEWS

- Bitcoin merchant acceptance taking off in Japan
- Olympic standards push Tokyo to ban smoking
- Yes, the best phone batteries DO come from Japan
- ZMP to have second try at IPO
- As Sharp shares rise, short-sellers increase positions

=> Bitcoin merchant acceptance taking off in Japan

A Tokyo bitcoin processor, ResuPress, has forecast that it expects more 
than 20,000 merchants in Japan to accept bitcoin by the end of the year. 
Already over 4,200 merchants are accepting the cryptocurrency, up 400% 
from 2015. The move to bitcoin is of course partly driven by Chinese 
consumers trying to find a way to get money out of the country, however, 
the cryptocurrency does seem to be gaining traction with Japanese locals 
as well. The country's largest bitcoin exchange, Bitflyer, reports that 
its new e-commerce shop which accepts bitcoin payments has seen sales 
grow 1000% in the last six months. ***Ed: With growth like this, it's no 
wonder that other merchants, and online ones in particular, are quickly 
adopting the new currency. (Source: TT commentary from 
cryptocoinsnews.com, Jan 31, 2017)


=> Olympic standards push Tokyo to ban smoking

Following the Olympic goal of supporting a healthy society, Tokyo is 
being pressured into banning smoking in enclosed public places, 
including all bars and restaurants, in time for the 2020 games. In fact, 
the Mainichi shimbun is reporting that the ban may be legislated as 
early as next month (March 2017). The announcement of the city 
government's intent to pass the ban has set of a howl of complaints from 
bar owners across the city, but it appears that this time around 
"gaiatsu" (foreign pressure) in the form of the Olympics is going to win 
the day. ***Ed: All we can say is, "Thank God for that!"** (Source: TT 
commentary from news.com.au, Feb 1, 2017)


=> Yes, the best phone batteries DO come from Japan

It's significant that Samsung Electronics is rumored to be talking to 
Murata Manufacturing to try to source batteries for its upcoming 
flagship phone, the Galaxy S8. The South Korean desperately needs a hit 
product after the negative PR and financially disastrous Note 7 (the 
company took a hit of US$5.3bn on operating profit), whose lithium 
batteries occasionally caught fire. As many readers will know. lithium 
batteries require highly optimized production standards, which Japan is 
still the indisputable king of. The Note 7 battery problems were blamed 
by Samsung on poor production controls at one of its own subsidiaries, 
Samsung SDI, and Amperex Tech of China. (Source: TT commentary from 
asia.nikkei.com, Feb 2, 2017)


=> ZMP to have second try at IPO

After an aborted public listing attempt last year due to 
company-internal information being leaked to the web, Tokyo-based 
robotics firm ZMP will have another crack at doing an IPO later this 
year. The company has become well known for its work on driverless cars, 
particularly a driverless taxi, which it hopes to have operational by 
2020. ***Ed: Reuters says that the IPO will be worth about US$82m 
(JPY10bn) - which we assume is the value of the whole company. ZMP is 
one of the few domestic firms developing robotically controlled vehicles 
- which given the worsening shortage of long-distance truck drivers in 
Japan could turn into an interesting business.** (Source: TT commentary 
from reuters.com,


=> As Sharp shares rise, short-sellers increase positions

Sharp's sudden financial improvement comes with a mixed reaction by 
investors. Many are cheering the fact that the company is following the 
cost-cutting focus of its new Taiwanese owner, Foxconn, although it's 
obvious that the Taiwanese are simply doing what the previous Japanese 
management should have done if they weren't so inbred and thus incapable 
of slashing colleagues they had grown up with. On the other hand, 
professional investors are betting that Sharp's share price is 
unsustainably high, and thus the number of shorts against further 
appreciation of the stock price has jumped by 100% over the last three 
months. ***Ed: The lesson here is that Japanese electronics and IT 
companies run by internal engineers are seldom capable of responding to 
market demands as quickly or ruthlessly as professional managers do - 
especially those managers still working for the original founding 
entrepreneur. We can think of many other companies that need the same 
shock treatment, with NEC being near the top of the list.** (Source: TT 
commentary from japantimes.co.jp, Feb 3, 2017)


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.



------------------ KEA Tokyo Inspire Event ----------------

Kea is a global community of Kiwis and friends of New Zealand that 
exists to inspire, connect and enable a borderless nation of one million 
advocates, champions and storytellers for New Zealand. The organization 
is hosting a joint event with the ANZCCJ chamber, to bring together the 
New Zealand community here in Japan. Keynote speaker will be Terrie 
Lloyd talking about lessons learned in the inbound travel sector.

Date: 17:30-19:30, Tuesday 14th of March
Where: New Zealand Embassy, Tokyo (20-40 Kamiyama-cho, Shibuya-ku, Tokyo 
Fee: ¥5,000 (Spaces are limited so please RSVP by 7th March, 2017)
RSVP: Cristina Merino Cristina.Merino at anzccj.jp


=> *** In TT882 we announced that Japan Travel KK is getting into the 
cycling business through a tie-up with DoCoMo Bike Share. To add value 
to the cycling business, we're offering tours, and among the proposed 
destinations will be sake breweries and wineries. A reader very rightly 
picked up on this and asked...

=> Reader: How do you plan on handling the liability of riders drinking 
alcohol and then riding? You mention wine tours in this article and I 
completely agree that places like Katsunuma in Yamanashi are a 
compelling proposition. However, the combination of inebriated 
foreigners cycling while looking at smartphones and sharing narrow roads 
with speeding kei trucks seems like a recipe for disaster.

We are moving there this summer and inbound tourism is something that 
everyone (especially the wineries) would like to see more of, but I'm 
not sure if cycling is the right solution. I am genuinely curious for 
your thoughts on this,

=> And we answered: Our tours will have tour leaders. If in their 
opinion someone shouldn't ride for whatever reason, then we won't let 
them ride. There is a support vehicle, so they can ride in that. The 
sake/wine portion of a tour will be in the later part of the day, and if 
there is more than one place to visit, again, we'll provide a minibus 
for the last 1-2 legs. Your point of course leads to an overall 
discussion about safety. We have told our partner that although Japanese 
regulations don't require it, we want all riders to use helmets from Day 
One. So they will be part of the offer made to customers.



=> Samurai House Yukimura, Ota-ku
Modern convenience with a traditional feel

More and more people are opening their homes to welcome guests who want 
to experience what it's like to live in a real Japanese home. Staying at 
a minpaku "a vacant home you can rent" is one option that offers the 
best of both worlds: a chance to stay in a real Japanese house, but with 
the freedom to come and go as you please, and to cook your own food.

Located in a residential area of Tokyo, Samurai House Yukimura is a 
traditional-style house with all the typical modern necessities - 
including free WiFi - you need for a comfortable stay, and can house two 
to seven guests. There are major supermarkets and drugstores nearby, as 
well as cafes and parks - even one including a pool. Most convenient, 
though, is the fact that Yukimura is just a stone's throw away from 
Anamori-Inari station, which is in turn only two stops from Haneda airport.


=> Ishinomaki Fish Market, Miyagi
Witness the action at Japan's largest regional fish market

Ishinomaki Fish Market is physically the largest fish market in Japan, 
acting as a conduit for the whole Minami-sanriku coastal region - one of 
the world's largest fishing grounds. At 876 meters long, it is the 
largest fish market in Asia and 1.4 times the size of its predecessor. 
Despite setbacks caused by the Great East Japan Earthquake, full-scale 
operations resumed in 2015 and business is booming, with catch volumes 
and revenue long since back up to their pre-2011 levels.

The market invites visitors from far and wide to see the core of 
Ishinomaki's economy in action, with the city's maritime industry and 
port having played a central role in the city's historical development. 
An elevated viewing gallery provides a bird's-eye view of the 
facilities, with the best time to visit in the early hours of the 
morning from 6am.

The colossal cargo storage facilities span 4 floors and a total area of 
46,000 square meters across 3 distinct buildings. It is separated into 
zones dedicated to offshore/coastal trawlers, aquaculture, and exporting 
or onward-forwarding to other markets, such as Tsukiji market in Tokyo.




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

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