Japan

[nunthewiser]

anyone got anything as in chart/statistics/info? or can point me the way

re japan property markets, currency, economic growth

the longer the time frames the better but would rather some newer stuff as well

does anyone think of them as an opportunity ?

are LPT.s and the like available for japan?

i know how to invest in hard currency and international currencys via bank

not actually intrested in the forex side as this is not a trading question and rather a long term query

cheers and thankyou in advance

 

[nunthewiser]

taken from wikipedia re japan asset bubble

take from it what you will

mainly researching aloud and hoping to hear all opinions too




History
In the decades following World War II, Japan implemented stringent tariffs and policies to encourage people to save their income. With more money in banks, loans and credit became easier to obtain, and with Japan running large trade surpluses, the yen appreciated against foreign currencies. This allowed local companies to invest in capital resources much more easily than their competitors overseas, which reduced the price of Japanese-made goods and widened the trade surplus further. And, with the yen appreciating, financial assets became very lucrative.

With so much money readily available for investment, speculation was inevitable, particularly in the Tokyo Stock Exchange and the real estate market. The Nikkei stock index hit its all-time high on December 29, 1989 when it reached an intra-day high of 38,957.44 before closing at 38,915.87. The rates for housing, stocks, and bonds rose so much that at one point the government issued 100-year bonds. Additionally, banks granted increasingly risky loans.

Prices were highest in Tokyo's Ginza district in 1989, with choice properties fetching over US$1.5 million per square meter ($139,000 per square foot). Prices were only slightly less in other areas of Tokyo. By 2004, prime "A" property in Tokyo's financial districts had slumped and Tokyo's residential homes were a fraction of their peak, but still managed to be listed as the most expensive in the world. Trillions were wiped out with the combined collapse of the Tokyo stock and real estate markets.

With the economy driven by its high rates of reinvestment, this crash hit particularly hard. Investments were increasingly directed out of the country, and manufacturing firms lost some degree of their technological edge. As Japanese products became less competitive overseas, the low consumption rate began to bear on the economy, causing a deflationary spiral. The Japanese Central Bank set interest rates at approximately absolute zero. When that failed to stop deflation some economists, such as Paul Krugman, and some Japanese politicians, advocated inflation targeting.[1]

The easily obtainable credit that had helped create and engorge the real estate bubble continued to be a problem for several years to come, and as late as 1997, banks were still making loans that had a low guarantee of being repaid. Loan Officers and Investment staff had a hard time finding anything to invest in that would return a profit. They would sometimes resort to depositing their block of investment cash, as ordinary deposits, in a competing bank, which would bring howls of complaint from that bank's Loan Officers and Investment staff. Correcting the credit problem became even more difficult as the government began to subsidize failing banks and businesses, creating many so-called "zombie businesses". Eventually a carry trade developed in which money was borrowed from Japan, invested for returns elsewhere and then the Japanese were paid back, with a nice profit for the trader.

The time after the bubble's collapse (崩壊, hōkai?), which occurred gradually rather than catastrophically, is known as the "lost decade or end of the century" (失われた10年, ushinawareta jūnen?) in Japan. Recently, the Nikkei 225 stock index reached a 26-year low 6994.90.

 

[nunthewiser]

take from this what you will

http://www.imf.org/external/pubs/ft/survey/2008/083108.pdf

page 128 onwards on japan

 

[nunthewiser]

am i the only one here with thoughts or intrest in this area ?

no one else thinks this maybe the dawn for a new era here ?

no one intrested in anything investment wise except the good ole busted USA and OZ ?

 

[MR.]

am i the only one here with thoughts or intrest in this area ?

no one else thinks this maybe the dawn for a new era here ?

no one intrested in anything investment wise except the good ole busted USA and OZ ?

So what about the really busted "Japan"

https://www.aussiestockforums.com/forums/showthread.php?t=3405&page=3

I still think I got into Japan stocks for the right reasons, but it was the wrong timing. The time to get in as a whole is getting closer. But not yet. For starters I think their market will still slide and the Yen/Aud exchange is yet to bounce back a bit. Double blow!

 

[arco]

Interesting read on Japan IMO

http://news.sky.com/skynews/Home/Business/Japanese-Model-West-Should-Use-Japan-As-Example-Of-How-Not-To-Solve-Financial-Crisis/Article/200811215148365?lpos=Business_Bank_Woes_Second_Feature_Region_0&lid=ARTICLE_15148365_Japanese_Model%3A_West_Should_Use_Japan_As_Example_Of_How_Not_To_Solve_Financial_Crisis

 

[nunthewiser]

thanks guys

 

[noirua]

Quite a difficulty looking at the Japanese stock market as the strength of the currency has masked the fall in the Japanese DOW. Shares could start to rise again just as the currency starts to sink.
I doubt we'll get the best of both worlds with the yen continuing to rise with the turn in stock markets.

 

[Trembling Hand]

If its a good enough trade buy the market hedge the currency.

 

[sinner]

If its a good enough trade buy the market hedge the currency.

My feelings are the squeeze for Japanese exporters getting hurt by current JPY strength will continue for some time to come!

Since the squeeze could do some real damage to the index prices in the long term, might be better to wait it out (or short the market and hedge the other currency : ).

 

[refined silver]

The time after the bubble's collapse (崩壊, hōkai?), which occurred gradually rather than catastrophically, is known as the "lost decade or end of the century" (失われた10年, ushinawareta jūnen?) in Japan.

True.

Recently, the Nikkei 225 stock index reached a 26-year low 6994.90

Exactly! Therefore, soon to be known as the lost two decades.

 

[noirua]

Japanese exports have been reported as having fallen 46.3% year-on-year to 3.28 trillion yen, while imports fell 31.7% to 4.13 trillion yen, creating a trade deficit of 844.4 billion yen.

The deficit, which measures Japan's trade with the rest of the world, hit a record 172.8 billion yen (AU$2.86bn)

The plunge into the red is the first in 13 years, the finance ministry has revealed.

 

[noirua]

"Japan is a mess - but it's still a buy."
http://moneyweek.com/news-and-charts/economics/japan-is-a-mess-but-its-still-a-buy-09062.aspx

 

[Joules MM1]

in vogue, attempts at positive contagion.......

Japan PM Noda vows to achieve 1 percent inflation target within 1 year
TOKYO | Sun Sep 9, 2012 10:12pm EDT

(Reuters) - Prime Minister Yoshihiko Noda has vowed to achieve 1 percent inflation in Japan within one year, as part of his pledges to become re-elected head of the ruling Democratic Party.

Noda will draw up plans to beat deflation and revitalize the economy. He also aims to carry out reforms to achieve a society without nuclear power generation, though he did not give any timeframe, according to his election pledges.

http://www.reuters.com/article/2012/09/10/us-japan-economy-noda-idUSBRE88902D20120910

===================================================================

South Korea sets $5.2 billion stimulus package as economy falters



SEOUL | Sun Sep 9, 2012 11:15pm EDT

(Reuters) - South Korea unveiled a $5.2 billion follow-up stimulus package on Monday, including tax breaks worth $2 billion, as the government tries to shore up Asia's fourth-largest economy in the face of the protracted debt crisis in Europe.

The steps would save taxpayers some 2.3 trillion won ($2.0 billion) in personal income tax, home transaction tax and domestic sales tax on automobiles and large electronics appliances, the finance ministry said in a statement.

"The fiscal crisis in Europe is continuing for a longer period than expected and the simultaneous slump in the advanced and emerging economies is continuing," Finance Minister Bahk Jae-wan said at a policy meeting.

The ministry said the package, which also includes a plan to make sure provincial governments spend their full budget allocations, would amount to 4.6 trillion won this year and 1.3 trillion won for next year, worth about $5.2 billion in total.

The measures were a follow-up to a $7 billion package in late June. Together, the stimulus packages are equal to about 1 percent of gross domestic product.

In June, the government had foreshadowed there could be further steps, so the market had been expecting an announcement.

The government has ruled out more direct measures to boost budget spending, saying it did not want to increase debt levels and fiscal soundness was important given Europe's problems.

After the country's export-reliant economy lost steam, the central bank cut interest rates in July for the first time in three years and is widely tipped to deliver another rate cut as early as Thursday.

($US1 = 1130.3000 Korean won)

http://www.reuters.com/article/2012/09/10/us-korea-economy-stimulus-idUSBRE88901M20120910

 

[IFocus]

Not sure when Japan will appear on the bond market firing range but when it does contagion will take on a new meaning.

 

[mullokintyre]

Its hard to imagine that Japan was once our mortal enemy.
I know people who lost loved ones in places like Changi, the Burma railway , the Solomons, and other places due to the cruelty of Japanese soldiers. I remember my father in law refusing to buy Japanese cars or Television sets.
Some still have a hatred and distrust of japan, but most of us have moved on.
This can be seen by the fact that Scomo was one of the first to call and have a chat with the new Japanese PM.
From Todays OZ

Mr Kishida emerged as the victor of the Liberal Democratic Party’s leadership contest and was installed as the country’s 100th prime minister after a parliamentary vote on Monday.

The Prime Minister moved to continue the strong ties between Australia and Japan, which have been bolstered by the Quad strategic dialogue.

The pair is understood to have discussed strengthening the economic partnership between the two countries, including securing supply chains and clean energy technology such as hydrogen, while deepening defence and security ties.

Mr Morrison and Mr Kishida also addressed geopolitical concerns in the Indo-Pacific region, such rising Chinese belligerence and ambition in the East and South China Seas, and recent missile launches by North Korea.

it seems that japan and Korea have also put aside some of their enmity as the mutual threat from China looms like a colossus over the outh China Sea.
Given this turn around, there is always hope for a realignment of the relationship between China and OZ, but it might take a change in leaders, if not regime , in China.
Mick

 

[Dona Ferentes]

I found this article interesting:

Japan Dominating Highly Profitable Niches​

by Tom Tao and James Halse

Japan is home to many well-run, globally dominant businesses, but this fact is often obscured behind headlines that call attention to a stagnant economy, declining population and scandals at large corporations. Discerning investors who are willing to dig a little deeper will be richly rewarded with a plethora of globally competitive companies that often play a crucial role in their respective value chains. Some of the best businesses in Japan are those that many investors have never heard of, making obscure products that dominate a market most investors have never thought about.

Take manufacturer Hoya’s glass substrates for hard disk drives (HDDs) for example. I (Tom) remember my first laptop in 2005. It was a clunky Compaq with 80GB of HDD storage capacity and the HDD would sometimes make a loud rattling noise. Fast forward to 2022, that big old clunky HDD is long gone from our laptops, replaced by the faster but more expensive flash memory or ‘solid state drive’ (SSD). The HDD market, thought to be having its sunset moment because of this dynamic has, however, found a new growth angle in data-centre applications. Due to the explosion of data creation (i.e. endless videos of cats, dogs and babies), the hyperscale data-centre companies (Google, Amazon and Facebook) all need a way to store data efficiently and economically.

Fig. 1: HDD vs. SSD

Source: CyberHoot

A HDD comprises a stack of disks on which bits of data are stored. Disks are made out of either aluminium or glass. An HDD unit typically has 8-9 disks. However, HDD manufacturers such as Seagate and Western Digital have been trying to pack more disks into a hard drive to increase storage capacity. We are pushing the limits of this approach, and the industry is expecting to introduce 11-platter in the near future. Glass is thinner, more rigid and heat resistant compared to aluminium, so is growing in adoption as HDD manufacturers seek to continue increasing the capacity of their drives. This bodes well for Hoya, as it is the only glass substrate provider in the world.

Hoya’s expertise in precision glass has also carried it into other niche verticals. Its mask blanks are used as a base material for photomasks, which are used to transfer circuit patterns onto silicon wafers in the manufacturing process for making semiconductor chips. The design of the mask causes light to shine through in a defined pattern to “print” the circuit pattern. When one considers how tiny transistors have become (IBM’s latest chips have transistors smaller than a strand of human DNA, allowing for an incredible 50 billion transistors on a fingernail-sized chip), one soon realises how small the margin for error is in the quality of the glass used in making the photomask!

Fig. 2: Cross-section of an EUV mask

Source: semiengineering.com

Hoya has 60% market share globally in the sales of such photomask blanks.[1] It is also the sole supplier of leading-edge extreme ultraviolet (EUV) mask blanks for the two main chip foundries Taiwan Semiconductor Manufacturing (TSMC) and Samsung, with products specifically designed to fit each customer’s process. It is very difficult for a competitor to enter the market because Samsung or TSMC would have to change its production method and process substantially, and incur substantial extra time and cost. It is no wonder then that Hoya earns superb operating margins of 50% in its Information Technology division,[2] where the financials are reported for its HDD glass substrate and photomask blanks businesses.

It is not only photomasks that need to be extremely flat and free of defects. Many component parts of the semiconductor production process require extreme manufacturing expertise to achieve the necessary tolerances. The silicon wafer itself must be polished to achieve an atom-level flat surface, which is done via the chemical mechanical planarisation (CMP) process. CMP uses a chemical slurry to smooth out the wafer, and for the chips with the most stringent demands, only ultrapure colloidal silica (UCS) meets the requirements for use in the slurry. Fuso chemical, has evolved into the sole supplier of UCS particles globally, and for its trouble earns a 45% EBIT margin in that business division.[3]

Fig. 3: CMP Process

Source: Dr Chris A. Mack, Adjunct Associate Professor, Lecture 30 Chemical Mechanical Polishing (CMP), July 2013.

What makes Fuso unique is its ability to manipulate its particle’s dimensions: shape, size, or even surface chemistry. Its particles are beautifully round and are free of contaminants.

Fig. 4: Fuso particle (left) vs. standard colloidal silica particle (right)

Source: Advances in CMP Technologies

Fuso has various patents for its technology, but their strength also comes from having deep know-how where product quality is always consistent. As chips are getting smaller and more complex, the number of CMP steps will increase significantly and drive higher demand for ultrapure colloidal silica. This trend puts Fuso in a favourable position to continue growing sustainably as the only supplier of a highly profitable niche product.

[1] Source: Goldman Sachs estimate.
[2] Source: Company’s annual report for the year ended March 2022.
[3] Source: Company’s annual report, average for the six years to March 2022.