Tax-Free Individual Investment Accounts Launch in Japan

Monday is the launch day for tax-free individual investment accounts in Japan. Account holders will not have to pay taxes on capital gains and dividends from annual investments of up to 1 million yen, or about 9,500 dollars.

Government officials are targeting Nippon Individual Savings Accounts, or NISA, at individual investors.

The tax-free period will last 5 years after investors open their accounts.

Officials hope the system will encourage people to move their money from savings accounts into investments.

Read the rest of the story: Individual investment accounts launched.

Abenomics: Japan Inc. Begins Reaping Benefits of a Weaker Yen

Japan’s major exporters are quickly reaping the benefits of a weaker yen, upgrading profit projections and inspiring confidence in the ability of a newly elected government and a more dovish central bank to steer the country out of two decades of economic malaise.

Toyota Motor Corp. underscored the new air of optimism on Tuesday when the auto giant hiked its profit forecast for the current fiscal year to a five-year peak. This followed similar upward revisions last week by Nintendo Co. and Japan Tobacco Inc. A weaker currency, coupled with a recent wave of cost-cutting in autos, electronics and other key sectors, signals a surge in profitability for Japan Inc.

In the markets, it’s being called “Abenomics,” named for the new Prime Minister, Shinzo Abe, who has taken his overwhelming victory in December as a green light to pursue an economic revival strategy centred on massive infrastructure spending, more debt financing and monetary policies designed to depreciate the currency and put some inflation back into the deflation-prone economy.

Read the rest of the story: Japan Inc.’s appreciation of the yen’s depreciation.

Japanese business shut down in China, U.S. urges islands row calm

Major Japanese firms have shuttered factories in China and urged expatriate workers on Monday to stay indoors after angry protests flared over a territorial dispute that threatened to hurt trade ties between Asias two biggest economies.

Chinas worst outbreak of anti-Japan sentiment in decades led to weekend protests and violent attacks on well-known Japanese businesses such as car-makers Toyota and Honda, forcing frightened expatriates into hiding and prompting Chinese state media to warn that trade relations could now be in jeopardy.

“Im not going out today and Ive asked my Chinese boyfriend to be with me all day tomorrow,” said Sayo Morimoto, a 29-year-old Japanese graduate student at a university in Shenzhen.

Read the rest of the story: Japanese firms shut China plants, U.S. urges calm in islands row.

Should Nomura Scandal Taint Japan?

Bad news out of Japan including the resignation of Nomura’s CEO following an insider trading scandal and a sharp drop in profits at Nissan, investors should not shy away from Japan, Ed Rogers, chief executive officer at Rogers Investment Advisors K.K. told CNBC.

Rogers remains bullish on the prospects for Japan’s economy, and expressed confidence in the Japanese auto sector.

“We’ve already been through our lost decade and we’re still in great shape,” Rogers told CNBC.

Read the rest of the story: Don’t Let Nomura Scandal Taint Japan.

Ex-Goldman Manager’s Independent Fund Ranked Japan’s Best

Hideto Fujino, a former Goldman Sachs Group Inc. (GS) manager whose independent fund is ranked one of Japan’s best, is beating peers by buying carparks and women’s gyms and shunning companies in the Nikkei 225 Stock Average (NKY), which has lost 80 percent since 1989.

Stocks such as Park24 Co. (4666) and women’s fitness-club operator Koshidaka Holdings Co. have helped Fujino’s 2.3 billion yen ($29.3 million) Hifumi Fund return 31 percent since October 2008, compared with a 23 percent drop on the Nikkei 225 and a 9 percent loss for the Tokyo Stock Exchange’s small shares index. The mutual fund, which includes eight companies from the Nikkei 225 in its 58-stock portfolio, was named Japan’s best this year by Rating & Investment Information Inc., the country’s top rating company.

“Investing in the big Japanese companies is a real gamble because they are so exposed to the volatile global economy, especially recently,” said Fujino, 45, chief investment officer at Rheos Capital Works Inc. in Tokyo. “If you look at small stocks, you can find a lot of companies where decision-making is fast and the focus is on long-term growth.”

Read the rest of the story: Ex-Goldman Manager, Ranked Japan’s Best, Avoids Nikkei.

Frustrated Japanese Shareholders Speak Out

To say that Yui Kimura is a distressed investor might be an understatement: She is a small shareholder in the operator of the nuclear power plant at Fukushima, Tokyo Electric Power, whose shares have lost nine-tenths of their value.

Now, she would like the company to at least face up to its responsibilities to the more than 100,000 people who have been driven from their homes after the tsunami disaster. She co-sponsored four resolutions at the annual shareholders’ meeting Wednesday, including one demanding that the company decommission all of its nuclear reactors.

“As the company behind a devastating disaster, we feel it needs to go that distance,” she said.

Read the rest of the story: Japanese Shareholders Starting to Show Their Teeth.

This Week’s Tax Debate in Japan’s Diet Could Move Markets

Japanese stocks have had a good run so far this year.  But whether the good times continue–both for stocks and bonds–depends critically on whether the faction-riven Democratic Party of Japan (DPJ), under the embattled leadership of Prime Minister Noda Yoshihiko, comes up with a credible (and eventually passable) consumption tax increase bill as scheduled this week.

If not, the bearish scenario is that Japan’s bond market will continue heading down, and pull stocks with it.  This scenario has been given a name:  “Ozawa shock.”

Since hitting a low of 8,160 last November 11, the Nikkei 225 Index is up a whopping 23%.  But last Friday’s 10,011 close was off 115 yen (1.14%) from the day before, the second biggest drop of the year.

Read the rest of the story: Whither Japan Stocks and Bonds: This Week’s Tax Debate Could Move Markets.

Three Japan Electronic Giants Joining Forces in Chip-Making Merger

Three of Japan’s biggest electronics companies are to join forces in a chip-making venture, according to reports, days after a swathe of dire results from a sector struggling to compete globally.

Panasonic, which earlier said it expected to lose more than $10 billion this year, is set to hook up with Renesas Electronics and Fujitsu as they look for economies of scale in an increasingly difficult marketplace.

The three companies will spin off their system chip design and development divisions to create a new company in an effort to ensure the survival of the Japanese chip industry, the Nikkei business daily and Kyodo news said.

Read the rest of the story: Japan electronic giants eye chip merger: reports.

Outside Directors May Be Forced on Big Firms in Japan

A Japanese government panel will propose mandatory appointments of outside directors on boards of large firms in the hope of averting the kind of accounting scandal that has engulfed Olympus.

But expectations of meaningful change are not high, and experts say the process in which companies pick outside directors may also need regulatory adjustment.

The British ex-CEO of Olympus, Michael Woodford, emerged from a meeting of directors on Friday convinced its board would eventually quit.

Read the rest of the story: Japan May Force Big Firms To Appoint Outside Directors.

Japan Industrial Production Zooms to new heights after global supply chains restored

Japanese industrial production grew 5.7% in May marking its fastest expansion in almost sixty years as the world’s third largest economy brings production back on-line and the global supply chain powers up again.  Led by the auto and heavy machinery sectors, Japan begins to stand back on its feet after the devastation caused by an earthquake and ensuing tsunami on March 11.

Read the rest of the story: Japan Industrial Production Skyrockets As Global Supply Chain Comes Back On-Line – Agustino Fontevecchia – Moral Hazard – Forbes.