UK-Japan FTA to be based on Tokyo’s trade pact with EU

UK-Japan News May 2018

Japan and the European Union look set to ink a trade deal in Brussels in mid-July, the Nikkei Asian Review reported on 19 April. They expect it to come into force before the UK leaves the EU.

The European Commission, which implements EU decisions, aims to have the draft approved in late June, with the Japanese Cabinet endorsing it around the same time, ahead of the signing in July.

Ratification of the agreement should take place by the end of the year, and a later UK–Japan bilateral pact will be based on the EU–Japan deal, the report says.

It adds that having an EU–Japan pact in place ahead of the UK’s exit from the union would enable talks between Tokyo and London to begin sooner.

No better post-Brexit deal than current single market, says envoy

UK-Japan News May 2018

Japanese Ambassador to the UK Koji Tsuruoka said the UK could have no better post-Brexit deal than the current single market, according to a report by The Independent on 22 April.

In the article, the envoy was also quoted as saying the UK’s standing as a gateway to Europe was the reason many Japanese firms had invested there, and “if that is in danger, if that is no longer sustainable, of course they will have to look at what they will have to do best”.

London tops student city list

UK-Japan News May 2018

London has been ranked top of a list of the best cities in the world for university students. Tokyo came in second place, the BBC reported on 9 May.

The ranking, from the QS higher education group, looked at access to culture, job prospects, the number of world-class institutions, the cost of living and affordability.

While London scored high on access to culture and the number of institutions, Tokyo won points on its desirability, which takes into account factors such as safety, pollution and quality of life.

Car firm to cut hundreds of jobs at Sunderland plant

UK-Japan News May 2018

Nissan Motor Manufacturing UK will cut hundreds of jobs at its plant in Sunderland due to a collapse in sales of diesel cars, the Financial Times reported on 20 April.

The report said the plant, which employs 7,000 people, had seen sales of diesel cars fall as a result of increased taxes on diesel fuel and confusion over possible future government bans of such cars.

A Nissan spokesman nevertheless was quoted as saying that the firm expected production volumes to increase.

Scottish crisps big in Japan

UK-Japan News May 2018

James Taylor, commercial director of Mackie’s • PHOTO: IAN GEORGESON

Crisp maker Mackie’s, based in Taypack, Aberdeen­shire, has experienced an increase in its sales to Japan in recent months, according to The Herald on 17 April.

The newspaper reports that the firm sent 20 containers of crisps to Japan in the two months to mid-April, more than had been its aim.

Some 2.5 million packets of crisps were sent to Asia by Mackie’s over the past year, with Taiwan, Thailand and South Korea among its new destinations, along with the existing markets of China and Singapore.

First Nova 1 train departs for north England, Scotland

UK-Japan News May 2018

The first batch of trains being loaded onto ships in Japan • PHOTO: HITACHI RAIL EUROPE

The first of a new batch of trains to be sent to the UK left Japan in mid-April, bound for a new life serving passengers in Scotland and the north of England with TransPennine Express, Rail Professional reported on 20 April.

The Hitachi Limited-built Nova 1 trains, which are scheduled to arrive in the UK in June, will offer free Wi-Fi in all classes, along with a new streaming entertainment system for passengers travelling between Liverpool and Manchester to Leeds, Newcastle, Edinburgh and other cities.

Takeda to buy Shire

UK-Japan News May 2018

A buyout of UK-founded, Ireland-headquartered pharmaceuticals firm Shire by Japan’s Takeda Pharmaceutical was agreed, after the former had rejected a cash and stock offer in mid-April, the BBC reported on 8 May.

The original offer, worth £43bn, would have given Shire shareholders ownership of about half of the new group. However, Shire claimed the offer undervalued the firm and its growth prospects, the report said. The accepted offer involved a £46bn deal. The news of the rejected offer and the continuing talks saw Shire share prices rise over the following days.

Meanwhile, Takeda’s shares tumbled on the Tokyo Stock Exchange, while talk of further offers continued, with the figure increasing each time until the deal with announced.

Skateboarding in doubt

UK-Japan News May 2018

Team GB’s hopes of entering a team in the skateboarding events at the 2020 Tokyo Olympic Games may have been dashed by a funding crisis after Skateboard England lost its Sport England backing, according to Japan Today on 19 April.

Skateboarding is set to make its debut in Tokyo, with four medal events in the two categories of park and street. The report says that other Olympic skateboarding hopefuls in countries such as Australia, Spain and Germany are receiving government funding.

English release date set for Murakami novel

UK-Japan News May 2018

PHOTO: ELEN SEIBERT

In its roundup of Japanese-to-English translations for the upcoming months, Nippon.com reported on 10 April that the latest novel by celebrated author Haruki Murakami will be released in English in the UK on 9 October.

The eagerly-awaited Killing Commendatore, translated by regular Murakami collaborators Philip Gabriel and Ted Goossen, tells the story of a painter of portraits who finds an undiscovered piece by a famous artist.

The website says F Scott Fitzgerald’s The Great Gatsby has influenced Murakami’s book.

Tennis: UK fails to reach Fed Cup World Group

UK-Japan News May 2018

In tennis, Japan beat the UK in the Fed Cup promotion play-off, dashing hopes of being able to play in the World Group, the BBC reported on 22 April.

The deciding doubles rubber saw Miyu Kato and Makoto Ninomiya beat Johanna Konta and Heather Watson 3-6, 6-3, 6-3 with Watson having earlier lost to Kurumi Nara and Konta beating Naomi Osaka.

The last time Britain competed in the World Group was 1993.

Cash no longer king in japan

Japan news May 2018

Most people who engage in commercial transactions in Japan will agree that the saying genkin banno”—cash is king—still applies. Use of personal cheques is a rarity, while credit cards and other money substitutes, which have made gains over the past several decades, still tend to be utilised considerably less than in other advanced economies.

But this may be changing. An online survey of 1,676 adults conducted by the Asahi Shimbun vernacular newspaper (21 April) reveals that the ratio of respondents preferring cash to cashless was split precisely down the middle. The former gave such explanations for favouring cash as “being accepted anywhere”, “keeping one more aware of the value of goods and services”, and “making one less concerned about overspending” (as opposed to when using e-money or credit cards).

Meanwhile, those preferring to eschew cash gave as their reasons that they liked being credited with shopping points, don’t need to go to a bank to get money, and find it troublesome to walk around carrying large sums of money.

The most popular cash substitutes mentioned (with multiple replies given) were credit cards (827 people), prepaid cards such as Suica and PASMO issued by railways (661), WAON issued by the AEON retail chain (313), other types of prepaid cards (150), Rakuten Edy (132), debit cards (77), and smartphones (27).

Despite the low ranking of smartphones, a front-page story of the Nikkei Marketing Journal of 23 April forecasts that smartphones soon will be used instead of cash.

While just 20% of consumers used cash substitutes in 2011, the percentage has been rising sharply since. Surveys by ePayments Laboratory Inc. and other organisations are projecting it will approach 40% by 2025.

As a walletless society emerges, new ways to spend money will inevitably be developed. A smartphone app now facilitates splitting the restaurant tab after lunch for instance. When an establishment called Café de K opened for business last November in Sapporo, it posted a sign at the entrance stating, “Cash not accepted.” Payment there can be made only using e-money or a credit card, meaning a walletful of cash will be all but useless.

A survey conducted in 2017 by Dentsu Inc., Japan’s largest advertising agency, found that 78.3% of respondents agreed that they preferred cashless transactions. According to another survey, 53.8% of teen respondents said they prefer making cashless payments—1.5 times more than the respondents in their 20s.

Ageing population elevates drugstore revenues

Japan news May 2018

PHOTO: CUSTOM MEDIA

The drugstore—a term used in Japan to indicate what is essentially a variety store with a licence to dispense prescription pharmaceuticals—continues to nibble away at supermarket sales.

Shukan Jitsuwa (12 April) reports that the Japan Chain Drugstore Association last year realised total retail revenues of ¥6.5bn, a gain of 5.6% over the previous year. The number of outlets nationwide increased 2% over the 2016 figure, to reach about 20,000 nationwide.

“About 10 years ago, annual sales by drug­stores were around ¥5tn, which means over the past decade they’ve grown another ¥1.5tn”, according to a retail industry source. “The industry expects that, by 2025, the total will reach around ¥10tn, bringing it within striking distance of supermarkets’ revenues of ¥13tn. It’s even possible that drugstore sales will exceed those of supermarkets.”

A number of factors are seen as supporting their growth.

“One is the addition of food and beverages to their product mix”, according to the afore­mentioned source. Drug stores “are located on main streets near or leading to residential neighbourhoods, and offer extensive parking space, which consumers appreciate. While only a few of them carry perishable items such as fish or meat, recently they’ve begun carrying fresh produce such as potatoes or onions”.

A reporter who covers the retail trade said that the Aeon Group, Japan’s largest retailer, reported operating losses of ¥1.65bn for its fiscal year ending February 2015. In the period ending February 2018, the losses had risen to some ¥2.16bn.

In recent years, Aeon has sunk large invest­ments into shopping malls, which appeal to customers who drive. The product mix at these shops largely overlaps that of its drugstores.

“Roads accessing malls are frequently jammed, and even at those malls with large parking areas, drivers often have to wait for a parking space”, the retail industry source pointed out. “Initially, they were seen as a curiosity and attracted customers. But their congestion has alienated many, who stopped going there. The drugstores are now exploiting a niche linked to neither supermarkets nor convenience stores”, he offered.

Another development of interest is the Don Quixote discount chain’s acquisition of a 40% interest in Uny Co., Ltd., Japan’s third-largest supermarket chain. With some 200 outlets, mostly in Aichi and Shizuoka Prefectures, its annual revenues of around ¥800tn were third nationwide behind Aeon and Ito Yokado. 

Competition among drugstore chains has been intense, with revenues of the long-running former leader, Matsumoto Kiyoshi, dropping to third place overall in 2017. It was supplanted by Tokyo-based Welcia Holdings Co., Ltd., which achieved year-on-year growth of 17.9% for the fiscal year to February 2017.

Sales of food accounted for 21.2% of total revenues, a level roughly the same as for medica­tions, sundries and health foods. Sapporo-based Tsuruha Holdings Inc., in second place, last year grew 9.4%.

Jaguar Land Rover rental campaign

Japan news May 2018

Hiroshima-based Times Mobility Networks Co., Ltd. announced on 18 April through its website that between that day and 13 July, 2018, it would start short-term rentals of Jaguar and Land Rover models, including the Range Rover Evoque and four other sports-SUV versions, and the Jaguar F-type. Those holding a Times Club card will be able to rent vehicles starting from as little as ¥7,900 for six hours.

The campaign was timed to attract drivers during the holiday-studded Golden Week period of consecutive national holidays and two weekends, between 28 April and 6 May.

According to the firm’s website, on reserving a car arrangements easily could be made to take delivery of the vehicle at an airport, a shinkansen or other railway station, or at a Jaguar Land Rover dealership.

Times operates more than 400 motor rental outlets, with a fleet of 28,956 domestic and imported models (as of October, 2017), plus another 20,033 vehicles available for car sharing.

Scottish distributor secures beer and spirits export deal

UK-Japan News April 2018

One of Scotland’s most established exporters of craft beer and spirits J.W. Filshill International Limited has secured a Japanese export deal. The contract is worth £100,000 and involves four import partners, according to a press release issued on 4 April.

The distributor’s exports include those by such craft distillers as Summerhall, Orkney and Glasgow, as well as craft brewers Williams Brothers, West Beer and Filshill’s own Clan Brewing Co.

Filshill has enabled 20 craft distillers to export a total of 35 products to Japan.

Japan joins Cumbria marmalade festival

UK-Japan News April 2018

The Marmalade Festival at Dalemain, near Penrith, Cumbria, has attracted 2,700 entries from more than 30 countries, including Japan, where the preserve is popular, the BBC reported on 18 March.

Visitors to the festival included a delegation from Japan, with the Mayor of Yawatahama, Ehime Prefecture, announcing plans to host a sister festival in his home city in 2019.

“I look forward to seeing the ways in which this festival will be both a showcase of Japanese–British friendship, and a wonderfully unique Japanese event”, said the festival’s founder Jane Hasell-McCosh.

Scots seafood nets national promotion

UK-Japan News April 2018

Japan’s largest supermarket chain Aeon Co., Ltd. will be arranging Scottish-themed tasting promotions at about 90 of its stores across Japan, Undercurrent News reported on 29 March.

The promotion will showcase various types of Scottish seafood, including Mirinboshi mackerel, lightly salted mackerel, lightly dried mackerel, brown crab and whole langoustine. This will mark the first time AEON has expanded its Scottish range beyond mackerel by including shellfish.

Previous figures show that Scottish seafood exports to Japan increased from £3.7mn in 2015 to £5.4mn in 2016.

Cherry blossom trees to be planted across Britain

UK-Japan News April 2018

Japanese individuals and firms have set a goal to plant 1,000 cherry blossom trees across parks in Britain as part of a fundraising project meant to symbolise bilateral friendship between the two countries, The Japan Times reported on 28 March.

The initial plan is to plant between 50 and 60 trees in four major parks in London next autumn.

“We want to honour the Japanese and the British predecessors who built cultural ties between our countries”, said the creator of the project Sandy K. Sano.

Firm to buy stake in North Sea wind project

UK-Japan News April 2018

Mitsubishi Corporation will acquire a 33.4% stake in Moray Offshore Windfarm (East) (MOWEL) in an agreement with Spanish energy company EDP Renewables S.A., Power Technology reported on 27 March.

The wind project is scheduled to begin construction later this year and to be commissioned in 2022. It is expected to be capable of supplying power to 1mn households.

The shares will be bought through Mitsubishi’s UK-based subsidiary Diamond Generating Europe.

Economy to benefit from Rugby World Cup

UK-Japan News April 2018

According to professional services firm EY, the 2019 Rugby World Cup will boost Japan’s economy by £1.5bn, CITY A.M. reported on 21 March.

It is estimated that the World Cup will create 25,000 jobs and attract 400,000 visitors to the country for the 44-day tournament. Tourists are expected to contribute £720mn in direct expenditure across the 12 host cities.

“The findings of the report outline the enormous economic, sporting and social benefits of Rugby World Cup 2019”, said World Rugby chairman Bill Beaumont CBE DL.

Azuma trains arrive in UK

UK-Japan News April 2018

Two new Hitachi Rail Europe Ltd. trains have arrived in Teesport, Middlesbrough, completing a two-month journey from Japan, Railway Technology Magazine reported on 21 March.

The five-car trains will form part of Virgin Trains’ new Azuma fleet, which will consist of 65 trains and provide an additional 12,200 seats in total.

The Azuma trains have the potential to reduce travel time on the east coast and increase through services from London to Bradford, Harrogate and Lincoln.

Scot receives karate title

UK-Japan News April 2018

Jim Wood MBE from West Fife, Scotland, has been awarded the Shihan title—one of the highest honours—from the Japan Karate Association (JKA), Dunfermline Press reported on 20 March.

Wood, who has studied for 50 years, spent 25 years teaching the martial art and built the first custom JKA Dojo in Dunfermline. He has also become a member of the prestigious Shihan Kai in Japan.

He teaches traditional Japanese karate in Western Australia and is president and chief instructor of JKA Karate-Do Australia.

Five-year cricket strategy revealed

UK-Japan News April 2018

The Japan Cricket Association (JCA) has published its new five-year strategy “Building a Brighter Future”, the organisation announced on 13 March.

The strategy involves developing national teams, administrators, coaches, scorers, umpires and volunteers; educating the Japanese public about cricket; offering a foundation of junior development; creating modified formats of cricket to create a unique social experience; and creating “Cities of Cricket”.

The JCA aims to reach five Cities of Cricket and 5,000 players.

Cheese on a roll

Japan news April 2018

The Nikkei Marketing Journal (5 March) reports that last year, Japan’s consumption of cheese grew 6%, making it the third straight year of increased demand.

According to data supplied by the US Department of Agriculture, the 320,000 tonnes consumed by Japan represents a 13% increase from five years earlier. Japanese statistics for 2016 show that daily per capita consumption of cheese had reached 6.5g, a rise of about 50% from 1996.

While Japanese people tend to favour consuming their Camembert accompanied by wine or in the form of party titbits, in recent years cheese, with its high protein and low levels of carbohydrates, has also been popularised as a food for dieters. At the same time, more firms have been pushing it as a dessert food: from last autumn, Megmilk Snow Brand Co., Ltd. launched cheese items flavoured with apple or berries.

The article also points out that recipes for the use of cheese have been rapidly increasing on social networks. A user hashtag #chiizutakkarubi focusing on Korean-style dishes prepared with cheese currently boasts 160,000 followers a day.

Deli-style items and sandwiches featuring cheese have also reportedly been selling well at FamilyMart Co., Ltd. and Seven-Eleven Japan Co., Ltd. convenience store chains.

The growing demand for cheese (as well as butter) is occurring in the face of falling production of raw milk products, as more of Japan’s family-owned dairy farms have been shutting down due to the ageing of the farm household population. As a result, costs for raw materials this year are projected to increase from ¥4 to ¥5 yen per kilogram of raw milk.

Brands look to emperors for name

Japan news April 2018

It’s been a popular tradition in Japan to welcome the arrival of a new monarch by incorporating the nengo (era name) into a firm’s name or brand. Examples include Meidi-Ya Co., Ltd. (a confectionary firm), Taisho Pharmaceutical Co., Ltd. and Showa Shell Sekiyu K.K.

Online newspaper J-Cast News cited a survey from Tokyo Shoko Research, Ltd., which has found that Japan has 1,270 firms beginning with Heisei—the current nengo—in their names. Of these, 653 firms, or 51.4%, were established in the first nine years of Heisei, which began in January 1989. The number of firms with Showa in their name is currently 2,640—more than twice the number with Heisei. However, this is not surprising since the 62 years of the Showa era are more than double those of Heisei.

The article also points out that small individual enterprises not officially registered as firms are not included in the count of firms using Heisei.

In addition, another 143 firms that had previously existed under a different name had changed their names to include Heisei.

Broken down by prefecture, Tokyo had the largest number of firms beginning with Heisei in their name, at 139, followed by Osaka (104), Saitama (63) and Fukuoka (61). The prefecture with the fewest was Tottori, with just five.

Murky future for ¥100 shops?

Japan news April 2018

One of the star retail players in Japan’s deflation-ridden economy has been the ¥100 shop. Referred to in the trade as hyakkin (“100 average”, referring to the retail price of most items) for short, the firms are regarded as the winners in the long-running deflationary spiral, as opposed to the nation’s department stores, the main losers.

While total department store revenue is in the neighbourhood of ¥5.95tn—10 times that of the hyakkin—Shukan Jitsuwa (29 March) reports that, with sales last year of around ¥420bn, Hiroshima-based Daiso Industries Co., Ltd. is ranked number one overall, with 3,150 outlets in Japan and nearly 1,900 overseas, giving it an approximately 60% share of the market. In second place is Seria Co., Ltd., based in Gifu Prefecture, whose revenues increased from ¥20.4bn in 2000 to ¥145.3bn at the end of fiscal 2016. In third and fourth places, respectively, are Can Do Co., Ltd. and Watts Co., Ltd.

The writer expresses concern about the hyakkin’s future, however. For one thing, from 1 March, 75-year-old Hirotake Yano assumed the post of Daiso’s chairman, effectively passing control of the company to his son Seiji, who became president. An unnamed business consultant noted that Daiso appears to be planning to go public, and with its large number of stores overseas, expects to face more severe governance requirements.

There is a view that the lifespan of firms whose business model undergoes minimal evolution—such as hyakkin shops—may only last 20 to 30 years. Already there have been recent examples of diversification, such as “leisure lands” that allow visitors to enjoy themselves for ¥500 for 30 minutes. Some 90% of the 70,000 items on display are said to be original products not sold in rival stores. The huge Arukukitto store operated by Daiso in Kinshicho, Sumida Ward in Tokyo, is said to average a turnover of ¥120mn per month.

An authority on retailing told the magazine, “Overall, the hyakkin stores are enjoying a huge level of support from foreign tourists. They particularly appreciate the cheap prices for fans, handkerchiefs and other items bearing motifs from old woodblock prints.

“The current number of inbound visitors is about 28mn a year, accounting for an economic boost of ¥5tn, and by the year of the Olympics—
2020—these figures are projected to jump to 40mn and ¥8tn, respectively. The hyakkin shops are certain to be one of the main beneficiaries, and the ones that will do the best will be those putting proactive policies in place to meet the demand”.

Another authority on business management, however, noted that consumers who patronise the hyakkin tend to be fickle and that the business can be unusually capricious.

“We’re already seeing a tendency towards merchandise with greater value-added, with the product mix including items for ¥200 each”, he noted. “A business that succeeds thanks to deflation is also one that depends on deflation, and that will place even greater demands on the people at the helm of such retailers”.

Aeon ends Laura Ashley tie-up

UK-Japan News April 2018

Aeon Co., Ltd. has begun to scrap poorly performing subsidiaries due to a missed profit target in its most recent mid-term business plan. One of those to be scrapped is Laura Ashley Japan, the Nikkei Asian Review reported on 19 March. AEON announced in February that it would not renew its licence to operate the brand.

AEON currently owns more than 70% of Laura Ashley’s operations in Japan, Taiwan and Hong Kong, and 120 of the shops in these markets will close by September.

AEON missed its operating profit target by ¥100bn.

Grime music takes root in Tokyo

UK-Japan News March 2018

In an article published on 27 February, dance music magazine Mixmag put the spotlight on the Japanese take on grime, a genre originating from London in the early 2000s that combines fast rapping with bass-heavy beats. The music has enjoyed considerable global success in recent years.

Speaking to leading DJs, MCs and producers in Tokyo such as Pakin, Double Clapperz and ONJUICY, Mixmag looked at how the artists discovered the genre and the challenges of introducing this foreign sound to Japan.

“We all express our frustrations and rebellious spirit in the same way”, said Pakin, commenting on the similarities between grime in the two countries.

Brexit seen as “self-harm”

UK-Japan News March 2018

The former British ambassador to Japan (2008–2012) Sir David Warren KCMG has written in an essay for The Royal Institute of International Affairs that Brexit could have a “grave” impact on UK–Japan relations, The Guardian reported on 15 February.

Warren writes that Japanese policy analysts are confused by UK government rhetoric surrounding the global opportu­nities offered by Brexit. In Japan, power projection is seen as heavily dependent on economic strength, and thus leaving a large economic bloc is seen by many officials as constituting political self-harm.

May, Abe to help enforce sanctions on North Korea

UK-Japan News March 2018

The British and Japanese prime ministers have agreed to work together to stop North Korea evading tough UN Security Council sanctions through ship-to-ship transfers of certain goods, the South China Morning Post reported on 27 February.

During a phone conversation between them, Prime Minister Shinzo Abe stressed the need to apply the maximum pressure on North Korea so it would abandon its nuclear weapons development.

Prime Minister Theresa May agreed, expressing her readiness to cooperate in dealing with the North Korea issue.

Interest in health shows marked increase among all age groups

Japan news March 2018

Japan’s consumers are showing a revived interest in the importance of health. Responses to a survey, received from both adult men and women in all age groups, express the intention to increase health-related expenditure, for example through food, leisure and other pursuits.

The Nikkei Marketing Journal (NMJ) dated 4 February published the results of a nationwide poll in September conducted by Recruit Lifestyle Co., Ltd.’s Jalan travel website. It obtained 2,582 valid responses.

In descending order, the items in which participants said they had recently taken a new interest or about which they had developed concern (with multiple responses given), included diet (82.2%), travel (79%) and health and relaxation (74.7%). When asked, “In what topics have you taken more interest than you did previously?” the top responses were health and relaxation (62.8%), travel (61.8%) and food (59.5%).

Somewhat unusually for a survey with a wide age spread, it found almost insignificant differences in the intention of different age groups to devote more time and spend more money on health. Among men in their sixties, 65.3% planned to do so, followed by men in their thirties (62.5%) and boys in their teens.

Compared with a current average monthly expenditure of ¥3,541 for health-related activities (not including medical treatment or medication), future spending is expected to rise by an average of ¥855 to ¥4,396. The sharpest increases are among men in their thirties (¥1,379) and females in their teens and twenties (¥1,060), respectively.

Asked if they have an interest in travel that promotes better health, 70.9% gave positive replies. The term “health tourism” might, in the Japanese mind, include therapeutic mineral spring bathing, specially prepared “slow food” or macrobiotic diets, as well as trips including yoga sessions or Pilates.