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Petty politicians, bungling bureaucrats and profitable business

August in Japan: heat continues, typhoons come and go, holiday rush gets roads and trains and planes clogged, colorful matsuri celebrations and fireworks all over, barbeques and beer gardens. All this contrasted by seriousness of Hiroshima and Nagasaki memorial days, not to mention the Very Serious annual high school baseball tournament at Koshien stadium.

It's the 100th year for Koshien, but even after seeing it 30 times I remain perplexed how big attention it gets in the media and among people all across Japan. Newscasters keep warning people from the perils of hot weather, to drink a lot of water and avoid heavy duty in sun – so far 300 has died and 70,000 taken to hospital – yet they forget all and turn starry eyed when talking about the young boys from all over Japan sweating it out in full gear and helmets on this sundrenched dusty field in Osaka. In contrast, professional baseball and football is played in evenings when it's supposedly cooler. (It's not that much cooler but the intention is there anyway.)

Hiroshima memorial event on Monday morning was 73rd and first one after the UN nuclear weapon ban treaty signed by 122 countries – excluding all who has them and others who doubted its effectiveness - like Japan and Finland. Reflecting recent changes in global politics City Mayor's speech was, if possible, even more serious and gloomy than usually. Quoting "certain countries proclaiming self-centered nationalism" and "rekindling Cold War-era tensions", he requested "intelligent" global leaders to join the treaty and eliminate nuclear weapons, not build more. As well, Japan government should continue manifest pacifism and lead the dialogue.

We all wish it was so simple: there's 14,000 nuclear weapons stored around the world ready to shoot at other countries and while none has been used since Hiroshima and Nagasaki thanks to responsible enough leaders who have controlled them, there's no guarantee this will continue. There's been increasing talk of lowering the threshold for "tactical" nuclear weapons as well as worry that outright criminals get hold of them. The biggest worry with so many weapons, experts say, is unintended launch by system malfunction or faulty information with one error leading to multiple others.

Japan's position is ambiguous: it keeps talking about its historical pacifist mission, yet relies on US nuclear weapon "umbrella" for its protection against nuclear China, now even North Korea. As doubts are increasing about America's reliability under current volatile, erratic president, they point Japan to the opposite direction: to have a nuclear weapon of its own. In Europe, too, rapid erosion of trust in USA is speeding up talks of improving own defense capabilities and nuclear weapons are an unavoidable part of the equation. Germany, loaded with history related pacifism like Japan, is said to contemplate closer link to French nuclear weapons starting with financing them.


None of this enter the public debate here, of course. Politics is now totally focused on how Abe-san will re-organize his government and party after his re-election in September; who will get what seat and where will he direct the expected extra public spending. First comes courtesy and vows of allegiance: using his position Abe is inviting provincial party bosses one by one to Prime Minister's Official Residence for lunch and dinner to secure their votes. Post-election, it will be rewards and revenge. According Nagatacho speculations, Ishiba-san will be banished from all party positions for his uppity to stand against The Boss and even Kishida-san will be demoted for making his decision not to run too late. Wataru Takeshita, 71 year old faction leader who gained fame for his opposition to proposed anti-smoking law, seem to feel strong enough to play kingmaker for Abe while the helpless Nobuteru Ishihara might get back in minister line-up simply for his loyal support. It sounds so much like Trump and his hopeless bunch of henchmen: in today, out tomorrow. Well, at least Abe-san does his changes orderly and carefully calculated. He also has good manners.

As for spending the precious tax money, Japanese politicians have now got obsession for new Shinkansen lines. It's probably better than obsession for building walls, but I can neither fathom why there should be tremendously expensive high speed lines in far out provinces where population is shrinking fast. In fact, there's no less than three proposals with two of them running the length of the main island at Japan Sea side – unpolite Tokyoites call it Ura-Nihon or back country "Perakyla" - and one across the country in North – call it Kajaani to Oulu or North to South Dakota. Both Japan Sea side proposals - one from Yamaguchi via Tottori to Kyoto, the other from Toyama via Niigata to Aomori - are building further on Nagano Shinkansen's extension to Kanazawa three years ago and its further extension from there to Kansai already decided to be built 2030-45. The new projects should obviously come after that, so you can't blame provincial politicians for lack of long term thinking! They all know they depend on money from Tokyo – today and 30 years later.

We know the Kanazawa extension has been successful – my train to Karuizawa is these days always full of tourist from Tokyo to there - but cannot understand where they will find paying customers to fill expensive trains running from province to province with declining population. Even normal cheaper trains there are hardly ever full today.


More puzzling ideas come from Olympic arrangers. So far all preparations have gone well: the new wooden stadium is already up to full height, Toyota's self-driving electric buses wait to haul athletes in their village and NEC's face recognition system will check their ID's at the venues. Tickets will start to sell next spring worldwide at reasonable prices on level with London. The unavoidable mascots were selected by school children in February and look quite OK, but now wonder who selected their names last month? Hard to believe that children would come up with such word monsters like Miraitowa and Someity! Play with Japanese words they might be, but thoroughly incomprehensible and unpronounceable in any other language.

Afraid the source can be traced to same people who last week selected a traditional manzai comedian to plan the opening ceremony spectacle. It's a relief that it was not Mr. Akimoto of AKB fame, so the world don't have witness Japanese male adults' affection to schoolgirls in uniforms, short skirts and long boots, but why did they have to go to the other extreme? Surely telling jokes in Osaka dialect and making funny faces is not a good starting point for creating a grand spectacle watched by millions of multicultural television viewers around the world.


Once you turn the focus from petty politicians and bungling bureaucrats to business and finance, the news change to positive immediately. Stock values have continued to do well in line with US stocks and there was a whiff of national pride when Tokyo Stock Exchange regained its old No.2 global position back from Shanghai. Chinese stocks are 14% down this year and the CNY has declined over 10% against USD and JPY. Shows how China, always clever, is preparing against 25% tariff threats from Trump before they even take place.

In corporate results, Sony's last quarter profit was 10 year record high and it upped its full-year estimate to JPY 500 billion (USD 4,5 billion). It's not just the games that are selling well: it also benefitted generously from its investment into Spotify. Panasonic profit was doing well, too, with batteries and electronics to cars including US Tesla leading the way. Sharp seem to continue on its way up with restructuring under its Taiwan management and Fujitsu announced it will sell off its non-profitable mobile phones business to a special company set up by Itochu and Sumitomo.

The electronic makers all pale in comparison to their old customer Softbank, whose quarter profit soared 50 times up from year ago thanks to USD 2,4 billion value rise in its Softbank Vision investment fund. It also booked USD 1,5 billion one-time gain from selling off the Chinese operation of its British semiconductor company. Son-san is said to plan listing his original core business, the Softbank mobile carrier, and the latest estimate put its value at USD 90 billion which would make it the biggest IPO ever. Amazing financial wizard, this little guy from humble background in Kita Kyushu!

There's been joy at Toyota, too. Just wonder which delighted Akio-shacho more: standing personally on podium to receive the trophy for Toyota finally winning the Thousand Lakes Rally in Jyvaskyla, Finland or the highest ever quarter profit USD 5,9 billion? True to his character, he stayed reserved about the latter and kept the estimate for full-year at 15% down. Costs are already rising in US factories from steel tariffs and there's USD 4,5 billion risk loss if Trump threat for 25% car and car parts duty is realised. It's over USD 10 billion bill totally for Japanese car makers, a huge blow nationally, and it's up for talks this month with Trump's hatchetman Lightizer here to present His Master's demands that Japan should fulfill or else...

He sure got his timing right with atomic bombs 73 years ago. Then Japan surrendered. Wonder what will happen this time.

Timo Varhama  
Tokyo, August 8, 2018  

Previous Columns

30 July 2018
"While we were on holiday"

17 June 2018
"From Singapore to soccer - wrapp up for summer"

11 June 2018
"Showdown in Singapore, commotion in Canada and cover-ups in Tokyo"

28 May 2018
"Morals and responsibility, blind loyalty and power harassment"

17 May 2018
"Big Business in record results again, but consumer are not convinced - North Korea spectacle continues under Kim direction"

26 April 2018
"Political spectacle approaches grand finale
- people's trust sinking ever lower"

17 April 2018
"Cruise missiles and cronyism, business boom, old people and sumo"

6 April 2018
"Mystery train and other unpredictable moves in geopolitics around Japan"

26 March 2018
"Trump Unchained and Abelympics – Can PM Make the Party?"

16 March 2018
"Anniversaries, updates, fallacies and deception"

5 March 2018

26 February 2018
"Korean Olympics: sports shine, politics stink"

14 February 2018
"Korea: Murky Politics and Big Business Behind the Sport Spectacle"

4 February 2018
"It's "smile time" in politics, Olympics, economics and business"

23 January 2018
"Moomin crisis, panda frenzy and Olympics turned into political farce"

12 January 2018
"Heisei 30 looks good: share prices soar, PM rides high "

20 December 2017
"Look back at 2017: commotion around Japan, but steady and safe here"

11 December 2017
"Missiles, footballers and fishermen from North - Big spending on child care to get more mothers working"

28 November 2017
"Foolish things sell in retail, but sports are to be serious"

20 November 2017
"Making China Great - with Gaffes, Platitudes and Bullying"

10 November 2017
"Good news week: Finland business grows, EU trade deal gets cleared, Nikkei hits new heights and Trump visit goes smoothly"

20 November 2017
"Making China Great - with Gaffes, Platitudes and Bullying"

1 November 2017
"Japan: Endless Discovery"

21 October 2017
"Power play in Japan and elsewhere - some potentially serious, some not"

10 October 2017
"Abe's useless snap election sparks big changes he did not count on"

26 September 2017
"North Korea boost Abe popularity - opportunity to extend his rule"

7 September 2017
"Kims'allah, Japan is OK and doing well"

28 August 2017
"From North Korea's missiles to Turku Terror and US Navy Mishaps"

17 August 2017
"Raining cats and dogs, missiles and threats, but strong sunshine in economy"

27 July 2017
"Forests, floods, fish and consumer prices - stories too good and data too bad to be true"

21 July 2017
"From Cool Finland to Hot Tokyo: A Round-Up of Recent Happenings"

26 June 2017
"Anniversaries and Memories: Finland, Japan, USA."

19 June 2017
"Rainy Season in Japan, Political Storms in Europe"

8 June 2017
"Trump impact spreads - Japan struggles with workforce issues"

30 May 2017
"Taormina to Tokyo: Heavyweights and fashionable ladies"

"New Missiles, Diet Debates, Yet Big Business in Big Profits - Down on Ground Challenges Remain Basic and Simple"

9 May 2017
"Golden Week, Special Trains, Luxury Spending, Even North Worries Makes for Good Business"

20 April 2017
"North Korea, USA both worry Japan - Koike worry Abe and LDP even more"

5 April 2017
"Spring, Sakura and New Year Start in Japan - Commotion, Tensions Rise Around the World"

27 March 2017
"Questions Unanswered, Unasked – Lifestyle and Surveys Bring Light"

21 March 2017
"Finland in Focus: Friendship, Dictionary, Music, Food - Even Elevators?"

13 March 2017
"Uncertainty Increases Around Japan - At Home Rebuilding Uncompleted in 6 Years - Abe Popularity Takes a Hit."

3 March 2017
"Book Readers, Police Jokes, Nerdy Napoleon and Poison Scare"

24 February 2017
"Populism, Ignorance and Isolationism Leads to Mayhem and Mess"

16 February 2017
"Golf Diplomacy, Chocolate Festa and Hokkaido Deams-Come-True"

9 February 2017
"Tokyo overcoming winter, business changes, political battle and Trump threats "

2 February 2017
"Warm Feelings in Japan, Wild Winds from USA"

20 January 2017
"Ready for Rooster? It will be a wild ride!"

About the Columnist

The columnist is a Japan veteran among Finnish business, our Chamber ex-president and today Member of the Board of Trustees.
After running a major Finnish industry company's Japan business for over 20 years, he is now Senior Associate in a strategic consulting company.

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