Underreported news May 19, 2013

by admin on May 20, 2013

Underreported news May 19, 2013

Only two items of what I feel is underreported news in the Nikkei this weekend:

1. Abe’s deregulation plans only concern big business. Medium and small business owners are already unhappy about it.

He plans to, for instance, make it easy for Toyota to make driverless cars or some computer company to mess around with “big data”.

In my view, on the issue of availability of personal data, for all the hot air blown by committee men in cushy government jobs, and no matter how apparently strict the laws on the issue, the reality is that the government is already making plans to rob citizens of their privacy by in effect giving away their medical data to companies. I cannot tell you where I got the information that forms the basis for this view, but it was not from the paper.

But for the majority of people in Japan, this means that there will be no fundamental change or reform, other than darker shades of kleptocracy.

Of course we shouldn’t blame Abe, whose name taken literally incidentally means “Safety Multiplier”. For the man is just a politician, and the whole system has to move along a path of minimized resistance.

And yet the very foundation stone of the government’s policy is an increase in private investment, for without that there will be no transmission between increased Ferrari sales now and a multiplier effect in one or two years’ time. But the lack of deregulation means there is no point of increasing investment in Japan at all.

2. Fish prices

Katsuo-bushi (fluffy fish flakes that form the basis of the stock that goes into most Japanese food) are going up in price. Volumes are down and demand is up, especially from SE Asia and China. Japanese processors are getting squeezed as the supermarkets are giving them hell to keep a lid on prices, premiums for Japanese-grade quality over Bangkok spot prices have collapsed (making it difficult to get the premium quality needed for the Japanese market), serving sizes have already been reduced, inventories in Japan are at emergency low levels, and of course processor margins are very bad, meaning that the damn is near breaking point. The only thing holding it back is “consumer expectations”. It will be interesting to watch those expectations be reshaped.

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