Tag Archives: revitalizing the country’s economy

Japan’s Jobless

Japan’s economy took baby steps forward in December as unemployment eased and factory output rose.

It could not, however, shake off a troubling combination of falling prices and wages that only worsened during the month and threatens to hamstring recovery.

The government released a slew of data Friday that offered both hope and uncertainty for the world’s second biggest economy. While Japan appears unlikely to fall into recession again – as some have feared – it faces a murky future under entrenched deflation.

“The bottom line is that a double dip is unlikely in Japan,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo. “That’s mainly because corporate activity is not that weak. Exports have been rising, which has resulted a pickup of production activity, which we hope will translate into a pickup in capex this year.”

Industrial production climbed 2.2 percent in December from the previous month, powered by a pickup in exports. The result just missed Kyodo News agency’s forecast for 2.3 percent growth in its survey of economists.

The trade ministry expects factory production to rise 1.3 percent in January and 0.3 percent in February.

Earlier this week, government figures showed that robust Asian demand in December fueled the first expansion in Japan’s exports in 15 months.

There was also a small improvement on the jobs front. The nationwide unemployment rate fell to 5.1 percent in December – better than 5.2 percent in November, though still high by Japanese standards.

The average ratio of job offers to job seekers stood at 0.46, a tad higher than 0.45 a month earlier. The figure means there were 46 offers for every 100 job seekers.

Household spending posted a solid rise in December, up 2.1 percent from a year earlier. The figure represents a key indicator of private consumption, which accounts for about 60 percent of Japan’s economy.

Despite the better jobs numbers, reaction from officials and analysts was far from jubilant.

“The rate improved slightly,” Prime Minister Yukio Hatoyama told reporters, according to Kyodo. “But it is far from giving grounds for optimism.”

Japan Condsiders Methane Hydrate as New Energy Source

Japan, the world’s second-largest economy, may have found a way to reduce its almost total dependence on other countries for the oil that drives the industries on which the country’s wealth is built.

Betting that Japan can extract and commercially exploit methane hydrate, the hoped-for alternative to oil, investors last week drove up the price of Japan Drilling, a company established in 1968 but only this month raising money by selling shares to the public.

Japan Drilling won the attention of market players because it is involved in the niche field of researching and developing methane hydrate.

The mineral is abundant in the seabeds surrounding Japan and may, over and above revitalizing the country’s economy, reshape Tokyo’s diplomatic and military relationships with the outside world, including the United States.

Japan has few mineral resources to speak of. It imports 99.7% of its crude oil, importing 87% of its oil from the Middle East. That makes the country heavily reliant on a secure sea lane stretching from the Middle East to Northeast Asia. Maintenance of good diplomatic relations with energy suppliers and with its military backer, the United States, is also essential.

Methane hydrate is a frozen methane gas found in a high-pressure, low-temperature environment, such as seabeds and beneath frozen ground. It is often called burning ice. Methane itself is a component of natural gas.

There are growing expectations that methane hydrate will come to serve as a valuable energy resource. The US, China, Canada and South Korea are among other countries seeking to develop commercially viable extraction technology.

In Japan, the government is backing efforts to complete research and development by 2018 and launch commercial production after that.

The volume of methane hydrate in seafloor sediments around Japan alone is estimated to be enough to provide energy equivalent to 90 years of the nation’s natural gas usage today.

Source: Asia Times