The financial industry is experiencing a sense of déjà vu reminiscent of the structured bond fiasco, as regional banks have come under scrutiny for the aggressive sale of structured bonds around 2020. The Financial Services Agency (FSA) of Japan issued business improvement orders to Chiba Bank, Chibagin Securities, and Musashino Bank in June last year, for practices that did not align with customer attributes or investment objectives. Despite the lucrative commissions from structured bonds, a shift in focus by the FSA towards the complex and high-risk nature of these products has led many banks to cease their sale. In the wake of structured bonds becoming a less viable option, financial...

On May 16, 2007, Kazuo Inamori, the visionary founder of Kyocera (1932-2022), delivered a lecture at the Tokyo Stock Exchange that would later be hailed as “The Legendary TSE Speech.” His profound insights into the essence of management and philosophy in business continue to be celebrated and passed down to this day. Inamori was invited to speak by then-Chairman of the Tokyo Stock Exchange, Taizo Nishimuro (1935-2017), who lamented the prevailing culture of materialism highlighted by incidents like the Livedoor scandal. Nishimuro, who had also served as the Chairman of Toshiba, requested Inamori to elucidate on “Why Philosophy is Necessary in Management.” Ironically, Nishimuro himself would later be implicated in...

In the world of automotive giants, Toyota’s performance is soaring to new heights. In 2023, it outpaced Volkswagen in global sales, securing the top spot for the fourth consecutive year. Supported by a weaker yen and increased production, Toyota announced a forecast for the fiscal year ending in March 2024 that is nothing short of spectacular. The company expects a net profit increase of 84% from the previous term, reaching 4.5 trillion yen, marking the first time a Japanese company has crossed the 4 trillion yen threshold. The announcement sent Toyota’s stock price skyrocketing on February 6, increasing its market capitalization by an astonishing 6.6 trillion yen in a single...

Introduction Starting April next year, Japan is set to initiate a “taxi company exclusive” ride-sharing service. This decision has sparked debate and raised questions about whether entrusting this to the traditionally resistant taxi industry can genuinely support regional life and the economy, especially in depopulated areas. Background and Decision This summer, the discussion around ride-sharing suddenly gained momentum in Japan, culminating in the government’s decision on December 20th to launch a restricted version of ride-sharing from April. Contrary to the global standard of ride-sharing, which typically involves new legal frameworks like a specific “Ride-Sharing Business Law,” Japan’s version will operate under existing laws and be limited to taxi companies. This...

Introduction Minna no Ginko, hailed as Japan’s first digital bank, commenced its operations in May 2021 amid much fanfare. Launched by Fukuoka Financial Group (FG), one of the leading regional banking groups, it was the first internet bank established by a regional bank. Major newspapers and online media lauded its business model as an innovative departure from traditional banking. Current State of Affairs However, the bank’s operational reality paints a grim picture. Initially projecting to turn a profit in its third year, Minna no Ginko is now facing its third consecutive year of losses. With a staggering loss of 2.7 billion yen in its September interim results, significantly higher than...

Introduction In a significant move within the Japanese automobile industry, Masanori Katayama, Chairman of Isuzu Motors, is set to become the new chairman of the Japan Automobile Manufacturers Association (JAMA) starting January 2024. This announcement was made by Akio Toyoda, current JAMA chairman and chairman of Toyota Motors, during a press conference on November 22, 2023. Breaking Tradition Traditionally, the role of JAMA chairman has alternated among the heads of Japan’s leading automakers: Toyota, Nissan, and Honda. Katayama’s appointment from Isuzu, primarily a commercial vehicle manufacturer, marks a departure from this custom. Toyoda explained this decision by highlighting the looming “Logistics 2024 Issue,” a reference to upcoming regulations on truck...

Introduction LINE Yahoo, a major IT company in Japan, recently faced a significant setback. In November, the company announced a potential data breach impacting approximately 440,000 users of the LINE app, with confirmed leaks in about 390,000 cases. The Data Breach The leaked information included details that could potentially identify users, such as age, gender, and call frequency, covering over 20 different data points. Additionally, around 22,000 pieces of data considered private under Japan’s constitution’s “secrecy of communications” were believed to have been leaked. Government Response Following the breach, Japan’s Minister of Internal Affairs and Communications, Junji Suzuki, criticized the company at a press conference for failing to protect user...

In September 2023, Tohoku University was selected as a candidate for the International University of Excellence, supported by a university fund. With a fund size of 10 trillion yen, expectations are high, but can it curb the decline in research capabilities? This article analyzes its system design and policy process. The university fund, managed by the Japan Science and Technology Agency, involves borrowing financial investment funds to create and market-manage a fund that supports specific universities in becoming world-class research universities. The plan is to contribute 300 billion yen annually. For universities to be accredited, they need to strengthen their research and administrative systems. Government documents appraise universities like Harvard...