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Japan's Tokyo

Japan’s Tokyo Stock Exchange halts trading because of a technical glitch – CNN

Hong Kong / Tokyo (CNN Business)A hardware failure has caused the Tokyo Stock Exchange to completely halt trading for an entire day for the first time in its history.

The exchange said Thursday afternoon that the technical problem was due to an issue with hardware. A backup device failed to work, making it impossible to distribute market information.
The issue also appeared to affect smaller Japanese stock exchanges in Nagoya, Fukuoka and Sapporo, which share the same trading system as the TSE.
The daylong halt is a significant nuisance for a stock market that is worth about $6 trillion and is the world’s largest after the United States and mainland China, according to statistics compiled by the World Federation of Exchanges.
The TSE said that it is replacing the hardware “to ensure normal trading” from Friday onward.
The exchange earlier said that it “sincerely apologizes for any inconvenience caused to investors and the people related to stock market.”
The suspension is “regrettable,” said Katsunobu Kato, Japan’s Chief Cabinet Secretary, at a press conference. He added that the country’s financial regulator has ordered the exchange and its operator, Japan Exchange Group, to investigate the cause of the glitch.
When asked about the possibility of a cyberattack, Kato said that he had “not heard about such information as of now.”
The problems shut down one of the only major exchanges operating in Asia on Thursday. Other countries are celebrating public holidays, including mainland China, Hong Kong and South Korea. Markets in mainland China will remain closed for several days for the Golden Week holiday.
Markets elsewhere were higher. Australia’s S&P/ASX 200 rose 1%. US stock futures advanced: The Dow (INDU) ticked up 240 points, or 0.9%. S&P 500 (SPX) and Nasdaq (COMP) futures were each up 0.7%.
September wasn’t rosy for the market. Wall Street’s major indexes all recorded losses, breaking a five-month winning streak and marking the first down month since March.
For the quarter overall, things were a bit better: All three indexes ended higher, making it the second straight quarter that stocks rose following the abysmal first three months of the year.
Jazmin Goodwin and Anneken Tappe contributed to this report.

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Japan's Ruthless

Japan’s Ruthless New PM Is a Control Freak Who Muzzled the Press – The Daily Beast

TOKYO—The right-hand man of Japan’s longest-reigning Prime Minister, Shinzo Abe, who orchestrated the administration’s control of the press and helped cover up the corruption scandals that forced Abe to resign, is set to be the next prime minister.

Yoshihide Suga was crowned the president of Japan’s ruling party, the Liberal Democratic Party (LDP), on Monday in an election that had been pre-decided in back-room deals. The LDP controls the lower house of Japan’s parliament and so their president will become the new prime minister. The Japanese press, who Suga has successfully tamed, did their best to spin his ascension as a story of a simple hard-working boy from a rural prefecture who worked his way to the top. But the real Suga is no country bumpkin. He is an information junkie, a control freak, loyal to his boss to a fault, ruthless, vindictive, and never forgets a favor or a slight. In a way, he shares many of the qualities that would make him an ideal number two in any yakuza organization in Japan; indeed, his past ties to the yakuza may come to haunt him as he takes power. 

Who is Yoshihide Suga?

The best authority on Yoshihide Suga turns out to be himself. He has written a book, The Resolution of a Politician (2012), and is a skilled essayist who has been published in Japanese periodicals. Suga, age 71, was born in a farming village in Akita Prefecture where his wealthy family reportedly had a successful strawberry plantation. While most people in the area entered the labor force after graduating from middle school, Suga went on to high school. By 38 he had entered politics as Yokohama City Council Member, and within a decade he was in the national parliament. When Abe ran for the presidency of the Liberal Democratic Party in 2006, Suga backed him all the way.

As Abe rose politically, so did Suga. When Abe—plagued by scandal and illness, was no longer able to stomach being the PM in 2007—he resigned for the first time. Suga, ever the loyal vassal, did not abandon his master even in semi-political exile. By helping him win the backing of the powerful right-wing lobby and Shinto cult, Nippon Kaigi, Suga paved Abe’s way for a return to power.

Suga is the longest serving cabinet secretary in Japanese history, and it is a crucial position. The cabinet secretary speaks to the press twice a day and in some ways may be said to actually rule the country. The secretary coordinates policy across government ministries, is the conduit between the prime minister and his political party, is on-call 24/7 to deal with crisis management, and is sometimes called “the shadow prime-minister.” A 2016 book by Isao Mori, The Reflection Of The Prime Minister, details just how powerful Suga had become in his position.

Suga’s own political accomplishments are rather minor. He is credited for getting telecommunications operators to drop their comparatively high-priced mobile phone rates. He pushed for the relaxation of visa rules to spur tourism in Japan. He masterminded the furusato nōzei (hometown tax donation) program, which permits tax reductions for those who make donations to the municipality of their choice. 

Suga, despite his dour demeanor, is immensely sociable. He spends each night attending several dinner and drinking sessions with journalists, politicians, academics, influential power brokers, and sometimes bureaucrats. They may get drunk but he never does; Suga doesn’t touch alcohol. He has different thirsts: a thirst for power, a thirst for respect, a thirst for influence. For breakfast, he dines with businessmen, CEOs, and economists. He stays in good shape; he does 100 sit-ups a day and has a spartan fitness regimen. 

He is also an avid reader. One of his favorite books is a novel about Toyotomi Hideyoshi (1537-1598) who rose from a peasant background to become one of the most powerful rulers in Japan. It’s easy to see why Suga admires him. Toyotomi operated in the shadows most of his life but when he seized power, he ruled effectively and brutally. He launched a failed war to take over Korea in 1592, a war of such epic cruelty that even Japanese scholars of the time noted the terrible atrocities. Toyotomi was also very vain, despite the fact that Lord Nobunaga had dubbed him “kozaru” (little monkey) because of his simian appearance and stature. In the LDP, some of Suga’s opponents call him “kozaru” behind his back—but never to his face. 

Friends in dark places

The ruling LDP party has long running links to the yakuza, so it’s no surprise that as Suga is about to become prime minister some of his questionable ties to the traditional Japanese mafia are being re-examined. 

The magazine Shukan Shincho notes that Suga was closely connected to yakuza-related firm Suruga Corporation, which was once listed on the Tokyo Stock Exchange. The firm paid a Yamaguchi-gumi Goto-Gumi front company millions of dollars to evict elderly tenants and small businesses from properties they wanted to develop between 2001 and 2008. During this period, the company regularly donated money to Suga’s political fund. All of this came to light in March of 2008, when the Tokyo Metropolitan Police Department arrested yakuza members for illegally evicting tenants. No one from Suruga Corporation was arrested–because technically at the time, it wasn’t illegal to hire yakuza for unsavory business practices. 

The firm was also well-connected and had placed an ex-prosecutor and former National Police Agency officer on their board. An investigator on the case told The Daily Beast, “Suga and the president of Suruga Corporation, Iwata, were close friends. I can’t believe that Suga had no idea what was going on. The company did a lot of business in his electoral district.”

In fact, one tenant who confronted the yakuza trying to evict her on behalf of Suruga was told during the negotiations, “Suga has Suruga Corporation’s back on this. Just give up and get out.”  

At the time, the scandal broke, Suruga’s office told the press, “We had no awareness of such things happening.” Suga’s office reportedly later returned the political donations from Suruga Corporation. 

In November of last year, another yakuza problem emerged. A photo of Suga posing with a yakuza boss, at a cherry blossom viewing ceremony hosted by Prime Minister Abe, came into circulation. When Suga was questioned about it, he refused to answer by saying that it was impossible to define “anti-social forces”—a euphemism for yakuza. His remarks ended up empowering the yakuza. Many of the laws in place to counter organized crime depend on there being a definition of the term. 

Information junkie and control freak 

When Abe returned to power in 2012, he faced three challenges. One was to make the public forget his disastrous first term in office. Two, to rein in Japan’s press, which might report on new scandals or poor decisions made by the PM. Three, tame Japan’s independent bureaucracy and government agencies to make sure that they followed Abe’s policy. Suga has taken on those tasks successfully. He was the architect of a plan to restrict and muzzle the media systematically. In 2012, Japan was ranked 22nd in the world press freedom rankings determined by Reporters Without Borders; it now hovers around 66th place. Suga deserves credit for that significant drop. 

Suga forged Abe’s strategy of wining-and-dining the top management of Japan’s newspaper and television stations while shutting out critical media from major stories. He has endeared himself to some members of the cabinet press club, which has helped him ensure he gets to see almost all questions before a press conference, and he actively works to limit questions that might embarrass the government. When a tough question slips by, he is able to lie with stoic aplomb, as he has done throughout numerous scandals. He has been instrumental in getting news anchors and outspoken commentators removed from Japan’s few hard-hitting news programs.  

In the numerous corruption scandals involving the prime minister and his appointees, Suga has knowingly lied to the press about the existence of documents and evidence. Some reporters have pointed this out, to their regret. He does not deal with dissent gracefully. Especially from female reporters. 

Suga has a particularly prickly relationship with Tokyo Shimbun reporter Isoko Mochizuki, who is one of the few reporters in the press club who will ask him tough questions. She has the audacity to follow up when he evades the question. He attempted to have her removed from the press club and snubbed her for months on end. 

She has become a popular hero to some for standing up to him and not backing down, which inspired a critically acclaimed documentary and the surprise hit movie Newspaper Reporter in 2019. At a press conference related to Abe’s role in approving construction for a school inappropriately, when Suga kept evading questions, she asked, “What exactly do you think the purpose of a presser is supposed to be?”

He responded, “There is no need to answer your question.” 

Mochizuki wrote in Weekly Post magazine last week, “That is the essence of his problem. He doesn’t understand that when he is talking to the press that he is talking to the people who read the papers, the public, and that he has a duty to inform them.” 

In 2015, Suga’s former personal secretary, Itaru Nakamura, who had been appointed the police chief in the Tokyo Metropolitan Police Department, squashed an investigation into the rape of journalist Shiori Ito. The man accused of rape was a friend of Suga and had written two glowing biographies of Abe. Suga was consulted before Nakamura halted the arrest. 

When Shiori Ito won a civil lawsuit against the man last year, Suga refused to comment on the case. When Nakamura was promoted to a high-ranking position in the National Police Agency this January, Suga responded to questions about the propriety of the decision by answering, “He’s the right person, in the right place.” Ironically, one of the reasons Abe resigned is that Nakamura was not chosen to be the head of the National Police Agency. 

It was also Suga who is credited with masterminding a plan to change the laws so that a high-ranking prosecutor close to Abe, Hiromu Kurokawa, could become the top prosecutor in the country. This would have ensured that Abe, and possibly Suga as well, would be immune to criminal investigation. That plan failed terribly and the backlash drove down Abe’s support ratings to all-time lows. 

Cover-up and rise-up 

Suga was an architect of the Cabinet Personnel Bureau in 2014 that gave the administration unprecedented, centralized control of over 600 top bureaucratic appointments. In other words, if you are an elite government worker and you want to rise to the top, you have to do what pleases the prime minister, or risk being sidelined. It created an atmosphere which encouraged any ambitious agency employee to make decisions with an eye to pleasing the administration, over serving the public interests. 

Critics have pointed out that this has created the problem of “sontaku” (presumptive actions), in which officials not only make policy to please politicians rather than what might be effective, but also destroy and alter public documents on their own to cover up for their bosses. Under Suga’s watch, officials who participate in cover-ups are rewarded and promoted. In a recent TV appearance, he defended his stance saying, “Any government worker who does not agree [with me] will be moved somewhere else.” 

Dissent is not tolerated. A top-ranking bureaucrat who protested that Suga’s “hometown tax” program unfairly benefited the wealthy was sidelined for his candor and taken off the so-called elite course. 

In 2017, when Kihei Maekawa, a former bureaucrat in the Ministry of Education, came forward with evidence that confirmed Abe’s involvement in a school scandal, Suga allegedly orchestrated a smear campaign to discredit him. The nation’s largest newspaper, the Yomiuri Shimbun, which is to the Abe administration what Fox News is to the Trump administration, gleefully helped. 

Whether you like him or hate him, Suga is adept at getting the media to do what he wants. 

Abe 2.0? 

Many expect Suga to be more or less a carbon copy of  Prime Minister Abe when he takes office. At the press conference on September 2, in which he announced he would be running for president of the LDP, he repeatedly said he would continue Abe-era policies, while also making it clear that he would not open the lid on Abe’s corruption scandals. The press was so frustrated with his evasive answers and pledges to follow Abe’s footsteps that a reporter from the Mainichi Newspaper jabbed him with the following question:

I feel like I’m listening to the statements of Prime Minister Abe. As ‘Prime Minister Suga’ are you simply aiming to be an extension of the Abe regime? If there’s any difference, what’s different and how will it be different?

Suga was momentarily dumbfounded and blurted out that he would shake up the bureaucracy.  

He is even expected to continue Abe’s disastrous economic policies with small variations. This time it will be called “Suganomics.” 

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Economy Japan's

Japan’s economy shrinks at record rate, slammed by pandemic – POLITICO

Japanese media reported the latest drop was the worst since World War II. But the Cabinet Office said comparable records began in 1980. The previous worst contraction was in 2009, during the global financial crisis of 2008-2009.

The world’s third largest economy was already ailing when the virus outbreak struck late last year. The fallout has since gradually worsened both in COVID-19 cases and social distancing restrictions.

The economy shrank 0.6% in the January-March period, and contracted 1.8% in the October-December period last year, meaning that Japan slipped into recession in the first quarter of this year. Recession is generally defined as two consecutive quarters of contraction.

Japanese economic growth was flat in July-September. Growth was minimal the quarter before that.

For the April-June period, Japan’s exports dropped at a whopping annual rate of 56%, while private consumption dipped at an annual rate of nearly 29%.

That was without any full shutdown of businesses to contain coronavirus outbreaks, which have worsened in the past month, pushing the total number of confirmed cases to over 56,000.

Analysts say the economy is expected to recover gradually, once the impact of the pandemic is curbed. Japan’s export-dependent economy relies heavily on growth in China, where outbreaks of the novel coronavirus began and have since subsided. But demand has remained subdued.

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Economy Japan's

Japan’s economy fell to recession in Q1 – MarketWatch

TOKYO–Japan’s economy contracted an annualized 2.2% in the January-March quarter, government data showed Monday, confirming a recession due to the impact of the coronavirus pandemic.

The revised figure was less than the 3.4% contraction in a preliminary estimate from the Cabinet Office in May. Two straight quarters of contraction is one definition of a recession.

The revised data showed that private consumption declined 0.8% from the previous quarter, compared with an initial estimate of a 0.7% fall.

Meanwhile, capital investment rose 1.9%, stronger than the initial estimate of a 0.5% decrease.

Economists say the upward revision to capital expenditure may not accurately reflect the impact of the pandemic because many companies didn’t submit their plans by the deadline.

Those who were unable to reply are likely to be affected more seriously by the virus, they say.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

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Economy Japan's

Japan’s economy falls into recession in Q1 – MarketWatch

TOKYO — Japan’s economy fell into a recession by one common definition in the first quarter of 2020, with worse expected in the current quarter.

The world’s third-largest economy after the U.S. and China shrank an annualized 3.4% in the January-March period, following a 7.3% contraction in the previous quarter when the national sales tax rose to 10% from 8%. Two straight quarters of contraction is one definition of a recession.

Economists polled by data provider Quick had expected a 4.8% annualized contraction in the quarter.

The coronavirus pandemic pushed down spending by households and companies and kept tourists away. Private consumption fell 0.7% on quarter as people refrained from leisure and dining out to avoid infection. Capital expenditures by companies dropped 0.5%.

Economists expect that the economy shrank at an annualized pace of 20% or more in the current quarter. Prime Minister Shinzo Abe declared a national state of emergency in April, which led many stores and restaurants to close. Most foreign visitors are barred from entering the country` and domestic travel has mostly stopped.

Last week Mr. Abe lifted the state of emergency in 39 of 47 prefectures. It still applies in Tokyo and Osaka but is expected to end nationwide in the next week or two.

“Sharp declines in private consumption, housing investment and capital spending are inevitable after April due to the state of emergency and the subsequent request for closing businesses,” said Taro Saito, an economist at NLI Research Institute.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

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