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 AOYAMA VIEW

Finland in Focus: Friendship, Dictionary, Music, Food - Even Elevators?
With poison attacks at international airports, missiles flying about, foreign dignitaries calling in, Toshiba fumbling around in perfect mist and politicians focusing on a school scandal, there was no space recently to stop, look and review on what's going around on the ground here. Let's try update some of what's been omitted over the past weeks.

Starting at roots level, our chamber's sister organization The Japan Finland Society celebrated 40 year anniversary with due festivities and guests from similar friendship organizations from all over Japan, even one from Finland. According to Embassy, there are more than 20 Finland friendship associations around Japan reflecting the Japanese people's keen interest and love for our small country. The "original one" in Tokyo is the oldest and biggest and Ms. Hayakawa has been leading it all these years – an endless dynamo full of passion. What a great, selfless work she has done for Finland!

Over the years, the association has helped to send many students to Finland with stipends. This time it helped to publish Finnish-Japanese Dictionary, a major task that has been 20 years in the works by scholars in Finland and Japan. With 40,000 entries, sample sentences, synonyms, proverbs and idioms on 1800 pages of thin dictionary paper, it's a real gem and certainly welcome handy tool for both Finnish students of Japanese language and Japanese students of Finnish as well as for the rest of us, who have had to go via English-Japanese dictionaries to find the right words. That's very cumbersome, I can testify, so many thanks to the main authors Petri Niemela, professor at Chiba University, Pirjo-Riitta Kuusikko, lecturer at Helsinki University, Kingo Yoshida, professor at Tokai University and Hiroyasu Kato, a lexicographist, for their hard work to bring the work that has lasted so many years to final conclusion. Urging all readers to get their copy.

Finland's 100 year anniversary event plans in Japan are shaping up, too, and FCCJ is participating actively in several of them. The first one off is May 19 concert of Tampere Symphony Orchestra conducted by Santtu-Matias Rouvali with a follow-up cocktail party hosted by Ambassador Siukosaari. Rouvali is the youngest exponent of talented Finnish conductors, who have shot to the top of the world, so the music should be first class. It will be also nice to get together with all Finland friends and music lovers immediately after the concert is finished. Hope to see your face in the place.

Those, who say the old "sauna, sisu and Sibelius" is a worn out expression don't know Japan: Finnish classical music has a wide following here and, yes, there's both Sibelius Society and Sauna Society in Japan. Guess our Japanese hosts are still working on "sisu", but maybe the new dictionary will help to define that.

For those of us here who miss Finnish food, FCCJ member company Benelic has just opened "Finland Kitchen Talo" restaurant in Roppongi Hills. Decorated with Nordic antiques and fabrics, Talo offers traditional Finnish cooking from casseroles and meatballs to pea soup and pancakes – every Thursday, of course, to follow Army tradition. The cooking is supervised by the long serving Embassy chef and recipes for berry pies come from Ekberg, the 160 year old favorite café and patisserie on leafy Boulevard in Helsinki. The place is small and was full of customers when I tried to visit last weekend, so that confirms that "Talo" is a welcome addition to Tokyo's culinary map. There was no splashy Hills nor such wide interest to Finland 20 years ago when my friends Hannu and Anja ran their Finnish restaurant in Roppongi.

There's a possible Finland connection also with the widely reported Toshiba-Westinghouse business wreck, namely that if Toshiba's elevator business would show up on its long fire sale list to keep the ship from going under, the old partner Kone would surely be a major buyer candidate. As those who have been long enough here know, the two companies formed a JV for Japan business 20 years ago with Toshiba also taking a minority stake in Kone's global business, something it sold off two years ago in need of money to cover losses from its previous business scandal. So the two companies know each other well and, if available, buying into Toshiba elevator business would be a sure fire way for Kone, well known around the world except here, to finally enter Japan market on its own.

The latest in Toshiba saga is that the company failed to clear the mess at Westinghouse and give its financial report for last quarter's business as promised on March 14. Now it is re-set for April 14 and, if failed again, the company will be delisted from Tokyo Stock Exchange. Even if CEO said everything is still open, it is now clear that Westinghouse will be put through US Chapter 11 process, then sold for the best bid. Most plausible buyer candidates are China's state owned nuclear power companies or their counterpart Korea Electric Power Corp. What to do with Toshiba's Japanese nuclear business unit remains open – many say that Abe government will somehow try organize it to be married to Hitachi and Mitsubishi Heavy, the two other Japanese nuclear plant businesses starving for orders. Export of Japanese nuclear technology was one of the building blocks for Abe's "New Japan", so such move would come as natural face saving exercise from the politicians. Washington is also pushing Tokyo to keep Toshiba alive so it cannot escape responsibility for the financial damage from Westinghouse bankruptcy.

Suitors are also swarming around Toshiba's well performing flash memory chip business that will be spinned out for sale next month. It is rumored now that the two leading buyer candidates, Hon Hai of Taiwan and SK Hynix from Korea are mulling a joint bid, but also that the government wants to keep it tied to Japan by becoming part-owner. How Toshiba will manage to perform with what remains of it after all these cuts and a couple of others already earlier, is anybody's guess. Few people can take CEO's promises of JPY 4 trillion turnover and JPY 200 billion operating profit in 2019 for full face value.

While wading through Toshiba's miseries, let's keep in mind that most big companies here are looking forward to conclude another good financial year on March 31. Already sitting on huge pile of cash, they will book more good profits, yet will share even less of it with their workers in this spring's base salary rise. First out, Toyota settled for JPY 1100 extra per month, down from JPY 1500 last year, JPY 4000 for 2015 and JPY 2700 for 2014. Other big companies will follow this line. If a company in Finland would offer EUR 9 per month salary increase, hardly worth two beers in a pub, it would be taken as insult. If that's the company line, better be without any, an average "Pekka" would say.

Japanese "Ichiro" has, however, a fallback position in that he will anyway get his age-based increase (about 2%) plus bi-annual bonus (1-3 month salary) on top of his base salary. Yet, big companies' minimal base rise ruin Abenomics' "virtuous circle" theory: with such peanuts, consumers are not splashing out, but remain stingy. It is a sign of desperation from government to try to talk up Oct-Dec quarter GDP growth rate adjustment to 1,2% p.a. instead of initial 1,0% as "stronger growth" and 0,1% CPI rise, first in long time, as sign of the long targeted inflation finally starting to rise. Yes, the oil prices are up and once last year's doubling of global coal prices that power companies are now obliged to pay, hits the consumers in higher electricity prices, CPI will start show some rise, but that's "bad inflation" that will only push them to tighten up their purse strings even more.

Happily, there's another sign of change: the SME companies and service industries, who employ many times more people than the elite Big Ones, are now feeling so acite lack of workers that they have no alternative to raising wages. It is said that lack of staff is the biggest business headache for 70% of SME companies around the country, even more so for retail, restaurant and other service industries that always paid the minimum wages for maximum work hours so they could offer the lowest prices to customers. Pushed to pay higher wages to secure staff now has resulted in average base pay rising more in practice than through annual big business negotiations – it did +0,8% in January to be exact. We can conclude that the classical supply-demand is again showing better results than all talk from politicians, unions and big business.

The super tight employment situation is now shaking also the well-known parcel delivery giant Yamato - the one with green trucks and green capped drivers running with their parcels from door-to-door. It's been a great business for both customers and the company: you get your parcel, luggage or golf bag delivered clock sharp in one day to almost anywhere with a reasonable price while the company has profited from the big size of its business: 1.4 billion deliveries last year – almost 4 million per day! That's about half of all parcel deliveries in Japan and it turns out now it's been simply too good: there's not enough drivers to handle rising volume of parcels any more despite working long hours late into evening. The rapidly grown volumes of online sales has been driving the volumes up exponentially – it is said Yamato delivery volume could even hit 1.8 billion parcels this financial year! To keep it going, the company has been compelled to pay higher wages – the base rise last year was JPY 5000, four times more than Toyota! This has cut into profits and Yamato says now "no" to new business and ask for higher prices from old big contracts like Amazon– first time in 27 years. Finally higher wages and higher prices in Japan, after all!

Interestingly, Yamato could also save costs by cutting back its high service level and stopping punctual deliveries by hour together with rapid re-delivery if you happen to be away from home at the time – 20% of all its deliveries consist of latter. Typically for Japan, this alternative is not in the plans: only 12 noon-2 pm time slot will be scrapped so that exhausted drivers can have a break for lunch from now on. If you missed your parcel delivery daytime, you can still get it re-delivered same day evening if you call before 7pm. Other delivery companies and Japan Post, who face same challenge, also opt for maintaining high service levels and rather raise prices to bulk customers. This is opposite thinking to delivery companies and public post in other countries: for instance Finland Post's punctuality is today measured in days instead of hours and its parcels never arrived to your door to start with.

Japan and Tokyo, despite its huge size, always rank well in international comparisons when it comes to service level, punctuality, safety, cleanliness and comfortable life in general, but there is always one factor that pulls them down: the risk for big natural catastrophes. Soon after Tohoku "3-11" catastrophe anniversary we got an update on the risk for eventual earthquake and tsunami from Nankai trough that runs 100 km out on sea from south of Tokyo to Kyushu island. Magnitude 8-9 mega quake that is expected in next 30 years with 60-70% likelihood will cause a tsunami that could rise 15-30 meter high in some places and impact 1.5 million people - 5 times more than Tohoku one - in wide area stretching from Tokyo to Nagoya, Osaka and Shikoku island. Over 300,000 homes would be destroyed and big industries would be damaged with unmeasurable economic consequences. Big parts of Osaka City would be deluged 2-3 meters under water. "The seismic activity around the trough has increased since 2011", the reports says dryly.

To escape stress from that, let's look at sports. The big news from J-League soccer season that started 3 weeks ago, is that the ever-young veteran Kazu Miura, now 50, scored a goal last weekend for Yokohama FC, his 2. Division club. This is a world record, so it made news around the soccer world. What many fans are waiting for is June 1 when a big international name will join a Japanese club for first time in long time, namely Lucas Podolski, to Vissel Kobe thanks to deep pockets of its owner Hiroshi Mikitani of Rakuten fame. In contrast to his baseball club Rakuten Eagles, Vissel is Mikitani's personal hobby. Instead, Rakuten participates in world soccer by paying EUR 200 million to become the main sponsor of Barcelona next year. In fact, several Japanese companies have paid big money to get their name on team shirts of well-known clubs and not just on advertising boards around their pitch. In England, it looks like "Yokohama Tyres" will beat out "Emirates" and "Etihad" for championship this year. The company will get even more exposure next year when Chelsea gets to play again in European Champions League. Anybody for "Yokohama Tyres" in the Euro final next year?

In Asia, it is the Chinese teams, who are spending by far the biggest money today and with their big name international players and coaches they seem unbeatable in Asian Champion League. When J-League started in 1992, we had Zico, Dunga, Lineker, Wenger, Littbarski, Stoikovich etc here, now their counterparts increasingly move to China. Japanese club teams' knack today is in finding reasonably priced young Brazilian talent, who will then develop in J-Leagues before moving on elsewhere. For instance, Hulk, who moved from St.Petersburg Zenith to Shanghai this year and last week sank Urawa with two goals, started his international career in Sendai Vegalta.

On national level, Japan and Korea are still doing better than China and we are now waiting for Blue Samurais' World Cup qualification matches re-starting this week. After dropping some points early on, these matches are must-win cases to qualify for the second round. In baseball, the national team won its qualification series for WBC and travelled last week to California and play tonight in semifinal against USA. Sumo spring tournament also started and it's good to see the new Japanese "yokozuna" doing well and proving wrong all doubts that he was promoted to Grand Champion too easily. In fact, Kisenosato looks very confident whereas three old Mongolian "yokozuna" all have struggled.

Politics this week: Prime Minister is in Germany, France and Italy despite Osaka schoolmaster's threat that "he will expose everything" about high level politicians, who earlier supported him, but now pretend they don't know him, when he appears at Diet on Thursday. Seems Abe-san has good stomach medicine these days – or good advance knowledge that nothing serious will come up. He was all charm, warm embrace and cheek kisses when meeting Frau Merkel – just to make difference to US president, who doesn't even shake hands with his guests any more. As well, both leaders assured they will defend free trade and globalism – and promised that the EU-Japan FTA will be completed soon. Trump's new policies are really helping all others to find each other today.

Timo Varhama  
Tokyo, March 21, 2017   


Previous Columns

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!"

2016

17 December 2016
"AOYAMA AWARDS: THE BEST AND THE WORST IN JAPAN 2016"

9 December 2016
"Finland independent with free word, good education - Japan and USA: Abe to Pearl, Son in Trump Tower"

4 December 2016
"Statistics, politics and plain bad management - difficulties to plough through it all "

24 November 2016
"TPP is dead – or is it? What comes next?"

14 November 2016
"US uproar shakes up the old world order, Korea in turmoil"

2 November 2016
"Showdown in U.S., Japan battles on"

25 October 2016
"Nobels, Narita and Niigata - Olympics and popularity politics"

26 September 2016
"In autumn downpours, Japan's wheels are slipping"

16 September 2016
"Moomins, Metsä, Mitsubishi and missiles - business, politics and sports"

6 September 2016
"Uunivited Guest Crashes the G20 Party"

31 August 2016
"It's not Super Mario, It's Super Abe! -- And Super Japan! "

8 August 2016
"Summer holidays, heat, rush and relax, while the world keeps turning"

12 July 2016
"Fog of uncertainties ahead: Japan, Britain, China and USA, each in their own way"

24 June 2016
"UK Splits, shakes EU, even Japan"

13 June 2016
"Rainy season: it's pouring on Prime Minister "

30 May 2016
"Obama is a Class Act, G7 Meeting Was for Japanese Audience "

8 May 2016
"With More Headaches at Home, Abe Takes Golden Week Europe Tour "

23 April 2016
"Dramatic Giant Quake, Business Slowdown, Election Mode in Politics"

7 April 2016
"Tokyo Great City, Japan hmmm...Colorful People "

22 March 2016
"Spring energy, child care and train travel "

11 March 2016
"Five Years from Japan "3-11" - Making Best Out of Gigantic Recovery Task "

28 February 2016
"A Dig Deeper into Politics: Ignorance, Camouflage, Chicanery "

15 February 2016
"Markets in turmoil, economy in decline, challenges grow for Abe"

5 February 2016
"Minister scandal distract, economy slow down, Kuroda rides for rescue "

28 January 2016
ABE: THE REALITY BEHIND ALL THAT TALK "

20 January 2016
"Bear Outlook for Monkey Year Grows, Taiwan Votes to Keep Distance from China, but Pop Group is More Important for Many "

12 January 2016
"NEW YEAR VIEWS - AND A LOOK BACK AT 2015"

2015

17 December 2015
"Global Environment, Food Tax, National Stadium: Historical Decisions or Political Parading? "

8 December 2015
"Challenges in Paris Conference, Challenges Back Home in Japan "

27 November 2015
"Refugees, bombs, business and global warming - can we control them all? "

3 November 2015
"Japan, USA, UK or Germany - China Impacts Us All Today "

22 October 2015
"New Ministers, New Trade Deals, All Political Play"

7 October 2015
"Power games, ball games, trade deals and refugee misery"

25 September 2015
"Big Problems, Big Talk and Big Figures - Each in Their Own Way".

9 September 2015
"Challenges in Japan, Tougher in USA and Europe ".

1 September 2015
"Looking at Neighbors, Japan Seems Stable and Safe ".

19 August 2015
"End Summer, Ceremonies and Holidays Over, Back to Work for All".

6 August 2015
"Hot Weather, Hot Air in Politics - From War Anniversary to Whisky in Space".

23 July 2015
Greece, China, EU, Japan: looking for the lost reality

23 June 2015
World No.1 City? The Difficulty of Passing New Laws, the Easiness of Spending a Lot

16 June 2015
"Only in Japan?" - Somethings, Yes, But Others Are Same All Over

4 June 2015
Security and Finances: Pensions, Companies, Banks, Olympics, FIFA

21 May 2015
Economy Back on Track, Record Profits at Big Companies

11 May 2015
Spring Events: Odaiba Rock, Shibuya Sex, Capitol Hill, White Hall and Red Square

22 April 2015
Elections, Elections - Finland, Japan, Around the World

30 March 2015
Sakura: beautiful, but just for a short, fleeting moment

16 March 2015
Better late than never - Japan moves slowly

2 March 2015
Three struck out, three more in doubt - Abe's ministers under attack again

19 February 2015
Spring, Sibelius, Chocolate, Budget and Big, Bad Putin

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



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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