Posts Tagged ‘ japan ’

Re blogging “Mr Yen cautions on Japan’s ‘unsafe’ debt trajectory”

A great article in the Telegraph on the Yen , Abenomics and debt ,
Looking at Japan is self financing its debt bit for how long ? Abenomics makes JGB looks very interactive , negative yield 1%!

2008 financial crash made many people remember that borrowed money has to be paid ,

In my opinion they will tax , tax , tax ! Which history shows us it never never works , I believe increase the consumption TAX to 10% is a much better option , and then invest in projects to keep Japan in Competitive position .
Japan should stick to its strengths and invest in R&D and engineering .

As always the markets will decide .

Tony Evans

Mr Yen cautions on Japan’s ‘unsafe’ debt trajectory

By Ambrose Evans-Pritchard, in Tokyo4:04PM GMT 26 Mar 2013

“A debt ratio of 245pc of GDP is not really safe, and it is not happening because we are investing,” said Takehiko Nakao, Japan’s ‘Mr Yen’ or vice finance minister in charge of the exchange rate.
Mr Nakao said the scope for further fiscal stimulus is running out and the country must restore public finances to a sustainable path by the middle of the decade. “We can’t continue to expect people to lend money to us,” he told The Daily Telegraph.

The comments touch on an acutely sensitive topic. A number of global hedge funds and banks have begun “shorting” Japan’s debt, the world’s biggest at $23 trillion.
They are mostly taking positions through the credit default swap (CDS) market, betting that Japan will be the next big crisis theme after the US subprime crash and the eurozone debt debacle. The radical new government of premier Shinzo Premier is determined to prove them wrong.

Mr Nakao brushed aside criticism that Japan is engaged in currency war or trying to push down the yen, but acknowledged that there are limits to what the Bank of Japan (BoJ) can do under the rules of global finance.

“We didn’t blame other countries after the Lehman crisis when they had large falls in their currencies. We are using monetary policy to tackle persistent deflation in Japan, and avoid a deflationary spiral,” he said.

Mr Nakao said there is a “shared view” among the developed countries that central banks can legitimately buy any form of domestic asset – as the Bank of England and the US Federal Reserve have been doing – but overseas bonds are another matter.
“We cannot buy foreign assets at our leisure. That would be the equivalent of currency intervention by the Bank of Japan,” he said.

The world turned a blind eye to Japan’s purchases of US Treasuries in 2011 after the Fukushima disaster, when the yen surged to a record Y76 against the dollar. But those were unique circumstances.
The yen has since weakened dramatically to around Y95 under Mr Abe, whose “Abenomics” stimulus policies include a shake-up at the BoJ and a new team of governors committed to reflation.

Veteran Japan-watchers say there is a graveyard full of foreign funds that bet against Japanese debt over the last two decades, only to learn the hard way that the country is sui generis, with vast overseas assets and a captive pool of domestic savings.

The great unknown is whether this is now changing as Japan’s trade surplus evaporates. The International Monetary Fund says gross public debt will reach 245pc of GDP this year. Net debt – stripping out the BoJ’s liquid assets – is much lower but it too is now rising fast.

The IMF says net debt will reach 145pc in 2013, well above the usual safety threshold. Figure has jumped by 50 percentage points since 2008, roughly the same as the jump in Spain and Portugal over the same period.
Japan is the only major nation that has not begun to tighten fiscal policy. The IMF says the primary budget deficit was 9pc of GDP last year, yet the Abe government is launching a fresh $200bn blast of stimulus worth 2pc of GDP to kick-start recovery.

Mr Nakao plan is to withdraw the stimulus gradually once recovery gains traction, with a rise in VAT from 5pc to 8pc next year, and then to 15pc. Mr Abe has vowed to cut the primary deficit to 3pc by 2015. “We think that is unrealistic,” said Junko Nishioka from RBS.
Chisato Haguma, chief equity strategist at Mitsubishi UFJ, said the government must curb “exploding social security outlays” as Japan’s ageing crisis hits.
However, he said the high debt level is overstated since the vast assets of the state – including land – dwarf liabilities, and could be sold off if needed. “They have more options than assumed. There is not going to be a fiscal crisis in the next two to three years, but there could be one later,” he said.

Foreign hedge funds have made much of recent moves by the state pension fund GPIF to start selling off part of its vast holding of government bonds (JGBs).
Mr Nakao said the selling is a temporary blip caused by bulge of retiring baby-boomers. The GPIF will soon be a net buyer again and will continue to accumulate for another thirty years.
The IMF has warned repeatedly that Japan is pushing its luck. The Fund has advised fiscal tightening of 10pc of GDP by 2020 just to stabilise the debt level.

It said there is plenty of “low-hanging fruit”, advising Tokyo to raise the retirement age from 65 to 67, and remove the tax subsidy for dependent spouses to make it worthwhile for women to continue working.
Yet the Fund said Japan is uncomfortably close to a debt compound trap, and could face trouble if borrowing costs ratchet up. “Even a moderate rise in yields would leave the fiscal position extremely vulnerable,” it said, warning that this would have implications for the entire world.
“Even a relatively small increase in the sovereign risk premium would make fiscal consolidation more difficult, pose challenges to financial institutions, harm growth prospects in Japan, and could spill over to global risk premia and growth. In this regard, Europe’s recent experience offers a cautionary tale. Once market confidence is lost, regaining it becomes very difficult.”

deVere Group Tony Evans supports Executive Fight Night in Tokyo

Press Release on deVere Group Tony Evans supports Executive Fight Night in Tokyo

deVere Group Tony Evans supports Executive Fight Night in Tokyo

deVere Group Area Manager Tony Evans is sponsoring the up-coming Tokyo edition of Executive Fight Night, the worldwide popular sell-out charity boxing event.

The Executive Fight Night is a global success story where executives from all walks of life sign-up for intensive boxing and fitness training with the aim of taking part in the black-tie boxing event at which they fight in front of hundreds of guests cheering them on.

On the inaugural Fight Night, sixteen courageous Tokyo-based executives will fight against each other in a safe, professional, Vegas-style black-tie boxing event.

The up-coming edition of the Executive Fight Night, where deVere Group Area Manager Tony Evans will be Gold Sponsor, will take place at the Grand Hyatt Hotel in Tokyo and guests will enjoy a 4-course sit-down dinner.

Ginja Ninja GK sees the event as a great opportunity to fight for a good cause, with all the money raised from the charity auction and raffle going to an exceptional cause. In 2013, the charity of choice will be Refugees International Japan, a non profit organisation dedicated to raising funds to assist refugees who have been displaced as a result of war and conflict.

deVere Group Area Manager Tony Evans commented, “It is a privilege to be named Gold Sponsor of the popular Executive Fight Night. I am sure it will be a fun night for deVere clients attending exclusively. In addition, we hope to raise as much money as possible for such a noble cause.”

Ginja Ninjas Co Founder Eddie Nixon stated, “We are extremely excited and proud to have the deVere Group on board as a premium partner for Executive Fight Night, Tokyo’s hottest premium event amongst both local and international executives. This support from Tony Evans and the deVere Group here in Japan will undoubtedly add to the quality of the night and be a key boost to help us achieve our fundraising goals for this year’s charity of choice, Refugees International Japan”.

Refugees International President & CEO Jane Best added, “Refugees International Japan is the chosen charity for EFN II with all proceeds from the exciting ‘Bid for Hope’ live ‘telethon’ style auction and raffle going to support RIJ priority projects in Syria, Burma and Uganda. RIJ and EFN II are aiming to raise 8million yen to help change the lives of thousands of refugees by providing essential health, education and resettlement kits that will ultimately enable families to rebuild their lives and return home”.

-End-

http://refugeesinternational.org/

http://ginjaninjas.com/

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“A dream written down with a date becomes a Goal. A goal broken down into steps becomes a plan. A plan backed by action makes your dreams come true.”

“A dream written down with a date becomes a Goal. A goal broken down into steps becomes a plan. A plan backed by action makes your dreams come true.”

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UK Firm Pensions: Is the End Nigh? « BCCJ Acumen – The Magazine of the British Chamber of Commerce in Japan

My article on UK pension and the risks facing them , And how individuals can protect themselves .

Clink on the below link to have a look .

UK Firm Pensions: Is the End Nigh? « BCCJ Acumen – The Magazine of the British Chamber of Commerce in Japan.

“Abenomics ” the winners & loosers

for every action there is always an equal and opposite reaction

Newton said that in 1687 and I can say that that is true today of the effect of “Abenomics” .Don’t get me wrong it’s exactly what Japan needs to kick start its economy but this will effect Japan’s biggest and also faster growing demography the “retired or silver saver as they known here ”

To understand this you need to understand inflation & deflation :
•inflation – increase in prices ( money has less purchasing power”
•deflation -prices fall ( money has more purchasing power )

So in a deflation environment which Japan has been for in the last 20 years “cash was king ” elderly saw their income power increase every year , with Abenomics this would end and this purchasing power would fall . The retired in Japan have assets in excess of $7 trillion ( that’s nearly as much as the GDP of UK ,Germany & half of France !)

The winners will be the stock market , forex and in the Japan Economy .The losers will the retires and people on fixed income ,

Personally I hope Abenomics will succeed Japan needs it, but it all comes down the “silver savers” will they allow it?

No one is bigger than the market forces , but the silver savers is quiet a force,

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High-net-worth investor confidence at three-year high, deVere finds

In my day to day work day I have seen this also , clients are getting more bullish . Even in Japan , I am seeing even Japanese investor becoming bullish , Abenomics is a key factor here .

All I can say is , Welcome back .

Article below , please click on the link to see full article , I just copied it here .

http://www.fundweb.co.uk/high-net-worth-investor-confidence-at-three-year-high-devere-finds/1067460.article

Some 53 per cent of high-net-worth clients of the deVere Group say they are bullish on their outlook for the next 12 months, according to the firm’s annual survey.

This figure shows an increase from the previous surveys in 2012 and 2011, with 49 per cent and 44 per cent of investors feeling confident respectively.

Nigel Green, deVere Group’s chief executive, feels this increase can be explained by easing uncertainty on issues such as the eurozone crisis and the US fiscal cliff and that this confidence could lead to a change in investment choices.

Green says: “These people understand that, thankfully, we’ve left the darkest days of the economic crisis behind and that in order to safeguard their wealth against inflation they now need to reduce their exposure to ‘safe’, low-yield investments, such as government bonds, and increase their holdings of higher risk/higher return investments.”

The firm’s survey covered 311 clients who have investable assets of more than £1m

Bank of Japan ready to declare war on deflation ???

Is the Bank of Japan ready to declare war on deflation ? I believe so , Kuroda said last week he would take aggressive action to stop deflation and to increase the growth of the economy .
I personally believe he will look at around $1billion a DAY ! At the moment the BOJ has plans for $1billion every 2 days starting next year ,
His comments last week gave us the impression he wants action now rather than later !

“It would be natural for the BOJ to buy longer-dated government bonds in huge amounts,” Kuroda said in a confirmation hearing in parliament .

I personally see no real change until the up and coming election has been won by Prime Minister Abe . Reason for this is that Japan have been sheltered from high energy price , commodity and food price and residents in JAPAN haven’t seen their bills increase as most other G8 countries .Weaker Yen means higher prices for consumer ( voters ) and that means no votes !

Kuroda has still not been confirmed as the new Bank of Japan governor but the markets have already taken this as a given , Nikkei goes up 2+/-% in a day.
A 1% increase means the Nikkei adds around $23billion !!!

I see Abe drawing up a battle plan for war , at the moment he is just appointing his “generals” , summer time I can see the full war!

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The Yen – Currency War or just Growth ?

Prime Minister Abe has survived a meeting with US President Obama without having his policy criticised. ‘Abenomics’ is seen in Japan as a way of growing the economy not devaluing the currency, if the Yen weakens that’s a bi product. Prime Minister Abe appointed key people to lead the Bank of Japan Kuroda-sama as Governor, a person liked in Japan but also respected internationally, which is key if Japan is going to succeed.
The Yen has fluctuated at times quite widely between 90-95 Yen range over 5% swings.
Now it seems so much sentiment has been placed on ‘Abenomics’ what’s going to happen next??
At least now we have a clear plan for getting out of deflation environment and into a true inflation target.
On the other hand we have no evidence of structural change to accommodate this. Personally I still feel people are remembering the BOOM and aftermath of the last surge and slightly cautious from jumping in.
But I do feel there has been a huge shift in people minds and the attitude is ‘What if this all true? Can Japan go through another BOOM?

Let’s hope so, I look forward to seeing what happens .
Gambette Kudasai

Tags :#abenomics #abe #yen #japan

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