Saturday, April 15, 2017

News from Nisshin-Global

The following was received from Nisshin-Global, which is not affiliated with American University in any way, and are presented only for your information. The ideas presented are in no way endorsed by or representative of American University.

Ken Knight, Ph.D.

1.    Future Population Estimates Show A Japan With Much Smaller Population

The Ministry of Welfare and Labor announced on the 10th of April its future population estimates through the year 2065. The following comparison shows two completely different sizes of Japan:

                            2015                   2065
Population        127,090,000      88,080,000
Age 65+               33,870,000      33,810,000
                             (26.6%)             (38.4%)
Age 15-64            77,280,000      45,290,000
                            (61.8%)              (51.4%)
Age 0-14             15,950,000         8,980,000
                            (12.5%)               (10.2%)
Total fertility rate    1.45                    1.44
Lifetime expectancy
- Male                 80.75 years old 84.95 years old
- Female           86.98                  91.35

Although the estimates look dire in terms of the declining population and aging society, the recent trend is slightly upward thanks to the improvement of the birth rate. The rate, however, is way below in comparison with the administration’s target of 1.8.

2. The 3rd Longest Yet Unfelt Economic Expansion

The Cabinet Office publicly released the DI (Diffusion Index) of February as 115.5. It marked the 51 months continuous economic expansion in row since the beginning of the “Abenomics” in December 2012 when PM Abe formed his second cabinet. This is the 3rd longest economic expansion in Japan, equal to the “Bubble Economy Period” (December 1986 through February 1991). The labor market is a full-employment state and the latest effective opening-to-applicant ratio is 1.43 meaning 1.43 job openings vis-à-vis one job applicant. Salary in real term is up in 2016 first time since 2011. However, we do not feel the heat of such economic expansion much due probably to the slow consumption stalled by the consumption tax increase implemented in April 2014. Therefore, the economic expansion is fragile and it may be easily affected by global economic environmental changes such as the U.S. and Chinese economic trends.

3. Current Balance Surplus Largest Ever

According to the statistics data of Japan’s Balance of International Payment for February 2017 that the Ministry of Finance announced on the 10th of April, the current balance surplus was 2.8 trillion yen, which is the largest ever for the month of February since 1985 when the announcement of such statistics began. Japan’s current balance surplus continues for 32 months in row. Trade surplus increased 2.7 times more to 1.8 trillion yen, while the service balance was a deficit of 63.9 billion yen. An increase of auto parts exports to the U.S. as well as the shift of Chinese New Year to the end of January making large imports from China were advanced to January made this large trade surplus for February.

4. Hydrogen Society Envisioned

According to Yomiuri, the Abe Administration launched a council consisting of the Cabinet members related to the policy to diffuse hydrogen use in Japan. The council is tasked to make a basic plan within this year to clear major bottlenecks to the diffusion of use of hydrogen in the society including the following:
  • Lack of hydrogen stations to fuel hydrogen to FCV (Only 90 stations now. 320 stations to be placed by 2025.)
  • Tight regulation for maintenance and administration of hydrogen tank (Regulation to be deregulated)
  • Limited scale of demand and supply (Hydrogen power plants and imports of hydrogen to be explored)

5. TEPCO Lost Most By Liberalization Of Utility Market

One year has passed since the power utility market liberalization and METI’s affiliated utility market monitoring organization announced the data how the utility users behaved. According to the data, more than 3 million users switched the power retailers, which account for a 5.5% of the entire market. Among the 9 existing electric power companies, TEPCO lost most in terms of the number of users (1,813,800) and of the share (7.9%). KEPCO lost 721,500 (7.2%) and Hokkaido Electric Power Co lost 6%, while Chugoku and Hokuriku’s share loss were 1.2% and 1.7% respectively. The data tells that there are distinctive difference of consumers’ behavior between metropolitan area and regional area.

Please enjoy your weekend!

Nobuo Yoneyama
Nisshin Global Corporation
2-1-15 Hiroo, Shibuyaku, Tokyo 150-0012, Japan
Tel: 81-3-6450-6632, Fax: 81-3-6427-7729

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