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 AOYAMA VIEW

SPRING, SIBELIUS, CHOCOLATE, BUDGET AND BIG, BAD PUTIN
It's still snowing heavily in the mountains and it's not really warm yet in Tokyo either, but when plum trees start blooming, you know that the back of the winter is broken. In shops, it's already all spring clothes, St.Valentine chocolate time is behind and Chinese New Year in hand with thousands of tourists from The Big Neighbor landing in this weekend to bring their contribution for the economy - average JPY 231,753 each according to latest data. On Sunday it's also Tokyo Marathon with 36,000 participants, lucky winners from the lottery involving more than 300,000 applicants, who are joined by 64 running policemen for security this year. Hope they can do it in shorts and sneakers like others, not carrying guns and bullet proof vests.

Last month, there was another lottery to select diners for the world No.1 restaurant visit to Tokyo. With only 44 seats each day available for two meals at JPY 64,900 each prepared by chef Rene Redzepi and his 50 strong Noma restaurant team from Copenhagen between January 9 and February 14, Mandarin Oriental Hotel had to run a lottery to select 3960 lucky winners from over 60,000 applicants. As much as I like good food, must admit I did not enter application for financial reasons, just noted that so many did indicative of the consumer economy today. For marathon, too, find it more enjoyable just watching live on television when the runners pass the familiar scenery. Actually have my family participating there in a way as my son is singing in the choir, who serenades the runners when they head off in front of the Metropolitan Government Building in Shinjuku. If it is snowing or raining as it sometimes does, that is tough enough physically, I think.

It is said that Japan and USA are now the favorite travel destinations for the Chinese tourists, the by-far biggest nation of global travelers today with 110 million outbound trips. Last year their numbers travelling to Korea were still two times bigger than to Japan and, further out, Paris and London held a special attraction. Seems these have now lost some of their shine and there has been some bumps to their reputation. If even 10% of all Chinese tourists would choose to travel to Japan, that would make 5 times more big spenders here and by 2020 one in every 20 Chinaman would have visited here and returned to tell friends and family that Japan is not at all that horrible place as CCP propaganda is telling them.

Tokyo's attractions - combined with Fuji, Hakone, Kyoto, Osaka, Hiroshima, Sapporo or where ever itineraries take the inbound tourists - surely look very tempting. For the Chinese, shopping stands out, for others it might be food, culture, history or just plain fun. For all, it is comfort and safety. Sure enough, Tokyo was again selected by a global survey as the world's safest city with Osaka, the other Japanese city included in the survey, coming in as No.3. In between the two, tightly organized Singapore was No.2, but beyond that, the next safe city in Asia, Seoul, was way down at No.24. Even New York, that was considered dangerous some 15-20 years ago, made it into Top 10.

We all know from experience that Japanese are not only super polite, but super honest. Stories of miraculous return of lost wallets and cameras are widely told and recent data from Tokyo police confirms this. Last year, Tokyo residents handed to "lost & found" over 3,5 million lost items and JPY 3,3 billion lost cash - not just credit cards. According to police, 74% of the cash was returned to the rightful owners. Something to think about when the numbers of inbound tourists continue to swell toward the 2020 Olympics.

I don't have concrete numbers, but I believe the inbound travel from Finland has increased also remarkably. Finland interest to Japanese culture continues to run high, both modern and old, art as much as food, same as many Japanese feel Finland is somehow special place for them. With such big interest among the Finnish public and around the world, it seems so much more difficult to understand the continued lack of Japan interest in the Finnish business circles. A recent example is food, where Japan is the world's biggest importer, preparing to open up even more through trade deals and Finland certainly has many attractive offerings for Japanese consumers. Based on this outset, Finpro launched a three year campaign for Finnish food promotion in Japan that was to start with wide Finnish participation at Foodex, the big annual exhibition and food business meeting at Tokyo Big Site. Disappointingly, none of the big Finnish food companies was interested to take up this opportunity on offer. Looking at the variety of food products from all over the world in shops here at world's highest prices and reading that chocolate sales alone count for many times more than the whole production in Finland, I find this lack of Finnish corporate interest very strange. Of course, niche products like farm honey, birch sap and wild berries are also welcome to Japan, but guess Finpro did not expect they would be the only ones to join in the campaign when it was launched. That said, with health effects of Finnish blueberries advertised in television every night in pill form by their Japanese maker, it would be nice to find them in the shops here fresh from a Finnish source.

Finland-to-Japan trade looks much better when we change focus to culture and especially music. Among the many anniversaries this year, 2015 also marks 150 years since birth of Jean Sibelius and in celebration of this we are about to receive an endless parade of top Finnish conductors, choirs and orchestras here this year. In addition, Japanese symphony orchestras from Shizuoka to Sapporo will play their own special Sibelius concerts throughout the year. The Sibelius 150 Anniversary Year was launched by Finland Embassy already last month in an event featuring conductors Yuri Nitta and Hannu Lintu. The former worked long time in Finland and she is today Japan's leading Sibelius specialist as well as Chairman of Japan Sibelius Society. The latter was here to conduct the latest composition of avant garde stalwart Toshi Ichiyanagi, who is also linked to Finland through Finland-Japan Modern Music Society he established together with our old friend Seppo Kimanen. Maestro Lintu will be here again in November together with his full band, The Finnish Radio Symphony Orchestra, together with Okko Kamu leading Lahti Symphony Orchestra, Pietari Inkinen conducting Japan Philharmonic and Osmo Vanska conducting Yomiuri Symphony Orchestra. First week of March looks almost as busy with Esa-Pekka Salonen conducting no less than seven concerts with yet another Japanese orchestra and the well-known Laulu-Miehet male choir giving four concerts. The choir will also participate with conductor Nitta and local Ainola Symphony for a rare presentation of Kullervo.

It really looks like a bumper year for the big numbers of Sibelius fans in Japan. As conductor Lintu explained at the launching event, the special love for Sibelius in Japan was started 40-50 years ago by the Japanese-Finnish conductor Akeo Watanabe, who often conducted Sibelius and recorded all his symphonies and countless other works. Born son of a Japanese priest and his Finnish wife in Karelia early 1900's during Russian time was the unbelievable background for this cultural giant, the first to start build the bridge that unites our two cultures today. It is my regret I never got to meet him personally, but did work close to his brother, who was a journalist and a gentleman equally.

Good news are coming in recent economic data, too. The GDP returned back to growth path as expected during October-December and there's good expectations that the speed will pick up further when we go forward. The recovery was not as strong as many wished, but at 0,6% up from July-September and 2,2% annualized it was decent. Interestingly some Western media described it "barely managed to crawl out of recession" while same week telling that Germany's 0,7% pick up was "strong recovery that will boost whole Europe". Journalists sure have many ways to say the same thing! For me, Japan total quarter growth was good considering that the crucial consumer spending did not yet show noticeable recovery. Same comment for the calendar year ending at +0,0% instead of outright decline, when you recall that the April tax rise was the first one in 17 years and the consumer spending went -19% off the cliff after it. In contrast, the main element in German GDP rise was private consumption that was based in sizeable salary rises across the export industries. Now the news are out here that the big industries will raise the base salaries here three times more than last year - some companies first time in 20 years - while government workers will get a raise over 4%. We can wait with interest how Japanese consumers will turn out when disposable incomes grow, job security firms up, prices for fuel remain down and product prices don't rise as expected.

That Nikkei share index soars at seven year high over 18,000 points, hotels and restaurants are fully booked and expensive Tokyo apartments are being sold in a few days already resemble a mini-bubble. For two out of these three there's a foreign interest involved: big parts of Japanese corporate stocks and luxury apartments are now bought by foreign investors. For the Japanese home buyers, who fret about the building safety and long term value, it is scary that Tokyo real estate prices look now so cheap for buyers from Hong Kong and Singapore, that they can buy properties on internet without seeing them. In latest news, even Japan Government bonds are now attracting foreign investors. Maybe it's all kind of "escape to safety" in consideration of alternatives elsewhere. It is just that Japanese themselves are again more careful with their money.

It is the task of the government to create basis for the confidence to spend and invest, so it will be interesting how Abe & Co will manage to push its agenda through the ongoing spring session in parliament. The list of promised reforms in Prime Minister's policy speech at the beginning of the new session was longer than ever and following 3 days of opposition grilling him for that, the debate for the FY'2015 general budget has started. It is another marathon talk fest estimated to take minimum 84 hours just in Lower House. Counting 7 hours per day and 5 days per week, this means 2,5 weeks which will be followed by similar round in Upper House, so it will be "giri giri" whether the budget law can be passed in time by March 31. On top of budget, there's big number of special laws for the proposed reforms to be discussed as well as the new security laws, another hot potato. Something has to wait and I would like to think it is the security area, where the two governing parties have to sort out differences on details first between themselves.
Some of these discussions border on ridiculous as they are so theoretical, removed far off from the reality.

Compared to the assumed safety and the political nitpicking in Japan, the security situation and the ongoing political talks in Europe seem rather dramatic. Russian president continues to play games around the helpless EU leaders, who last week in marathon talks surrendered all what Russia wanted for a new ceasefire in Ukraine only to be betrayed again. Safely across the Atlantic, the US president continues to talk big with little real work, while down on the ground in Ukraine there seems to be no end to the ongoing misery. Wily Putin is even making friends with all kinds of anti-EU circles no matter if far-left or far-right with the new Greece government as his latest addition. The newly elected young leaders in Athens certainly look "different" and started their fight against the EU debt rules with full broadside, even flashing Russia and China cards. It is indicative of the Asian communist giant's growing global ambitions, that it seems happy to mingle into the EU inside play. It is longing to buy the rest of the Piraeus port, which it already partly owns, to make it a base for its commercial navy, later possibly military, inside Europe. As Greece is more important block in NATO than it is in EU, any chance of it turning pro-Russia and pro-China should raise alarm bells in Washington more than the growing likelihood of "Grexit" in Brussels and Berlin. As for the debt matter itself, I think the debtors should give the new boys in Athens a chance and not force Greece to bankruptcy just to show discipline. International politics are not for "schooling" other sovereign countries and let's remember that the whole big rescue operation has been not just for Greece itself, but for German banks who willingly loaned all that money there. Especially Germans should remember what can happen in a proud country that went wrong, when haughty winners force it down on its knees. Don't make Greece "Weimar of the Mediterranean", says Paul Krugman, something I subscribe to.

Finally on sports: it is good to see a Japanese football player joining Helsinki FC or HJK as much as to see ex-F1 driver Heikki Kovalainen come here to drive Japan GT as reported in last FCCJ email bulletin. The former move is something that I always wanted to see and it's even better that Atomu Tanaka comes from Niigata Albirex, my old favorite team. The latter move reminds me of the old times when Mika Salo was driving Japan Formula here with a bunch of other future F1 pilots - those were the days! Honda's return to F1 circus together with its old partner McLaren brings also back great memories of many classic races in Suzuka and the team's many world championships by Airton Senna, Alain Prost - and Finland's own Keke Rosberg. Same for the news that Toyota will return to WC Rally in 2017 - hopefully with a Finnish driver, too.

Timo Varhama  
February 19, 2015  


Previous Columns

5 February 2015
Reform Work Starts Energy, Farming and Food on Wish List


26 January 2015
Terror strikes, plenty work, sad memories wait

15 January 2015
Watching AKB, Eating Mochi, Spending JPY 96 Trillion - Japan Off to Better 2015 After So-So 2014

18 December 2014
Snap Election Over, What's Ahead? Time for Xmas, New Year Holiday

Japan: too many elections, too many politicians - Finland: Moomin power!

12 November 2014
BOJ Ups Ante, Abe's Encounter in Beijing, Election in Tokyo?

28 October 2014
Money Scandals with Ministers, Economy and Reforms Bogged Down - Abenomics is Facing Demise, Internal Political Commotion Gains Again.

14 October 2014
Water as Fuel, LED Lamps and Nobels - Japan Tech Still at the Top of the World

25 September 2014
Scotland Challenges Britain - Finland Tries to Live with Russia

11 September 2014
Sport Stars, Ministers and Managers - More Women are Needed by Japan

2 September 2014
Bad News and Panic in the Park, Putin Planes over Moomin Island?

20 August 2014
Hot Summer, Heavy Rains, World on Fire, Economy Sputtering PM Looks Tired

25 July 2014
From World Cup Fun Back To Grim Reality

23 June 2014
Soccer shows New Japan, Olympics old men business

3 June 2014
Nationalism - Good for Economy, Soccer - Dangerous in Foreign Politics

21 May 2014
Energy for Summer? More Scarce Than Politicians' Will foe Endless Ddebates

12 May 2014
Economic Outlook: Consumers Still Genki, Companies Profitable

30 April 2014
Travels, Trade Deals and Security Concerns

3 April 2014
Colorful stories and scandals, serious tax challenge to consumers

20 March 2014
Putinisms, Abeisms, Obama, XI – Global Challenges Hit All At Home

21 February 2014
Snow and Smile for People, Serious Faces for Leaders

10 February 2014
Abenomics, Abeisms, Now Abefication – He ia All Over. For Some He Was Target Even in Tokyo Local Election

23 January 2014
Three Wise Men VS. One PM, Two Ex and a Colorful Crowd
  -  Business Doing Well, Politicians Think They Know Better


16 January 2014
New Year: Horse, Sports, Budgets, Polls and Moomin



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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