As I write this, Japan is once again in a funk. The yen has come ever so close to its post-WW2 high of JPY79.70/US$ seen in 1995, the Nikkei has touched 16-month lows, and now, the governing Democratic Party of Japan (DPJ) has become embroiled in an internal power struggle between Prime Minister Naoto Kan [Read more...]

Japan’s new prime minister, Naoto Kan, has been given a poisoned chalice to say the least. Although GDP is growing again, the magnitude of the country’s economic challenges is gargantuan:

A fiscal deficit of around 10% of GDP
A public debt burden of 200% of GDP
An ageing [Read more...]

When Fujifilm announced a ‘full-scale entry’ into the pharmaceutical sector earlier this year, many market observers were left head scratching. Surely companies should focus on their core competencies? What does Fujifilm know about developing and selling medicines? Who is going to buy these drugs?
I, on the other hand, saw the beginning of a trend that [Read more...]

Having rung up over US$25bn in debts, and four state bailouts in the past decade, Japan Airlines – Asia’s largest airline – has finally filed for bankruptcy protection. The beleaguered company made the filing yesterday, and although the government has pledged to keep the carrier in the air, almost 16,000 jobs will be slashed in [Read more...]

One of the things that has been troubling me more and more lately is Japan’s colossal debt burden, which is heading towards 200% of GDP. At the moment, the debt burden is existing in an equilibrium of sorts, with Japanese financial institutions seemingly content to keep buying Japanese Government Bonds (JGBs). In a climate of [Read more...]

Risk Watchdog has just returned from Greater Tokyo, where I spent a week trying to get a handle on what’s happening in Japan. Regular readers will recall that I have generally been bearish on Japan’s economy, so this was a good opportunity for a first-hand refresher.

I say ‘Greater Tokyo’, because I also visited Tokyo’s [Read more...]

One stock market that has really underperformed global equity markets in recent months is Japan’s Nikkei index. While other developed markets have rallied by over 50.0% since the March lows, and some EMs by around 200%, the Nikkei has only recovered by around 35.0%.

The price action has turned lower and is starting to form a [Read more...]