Japanese companies and their leaders’ risk-averse nature have led to missed growth opportunities in the global market. To overcome this, a fundamental enhancement and development of management personnel are crucial. Entrepreneurship involves understanding one’s capabilities and taking on market and technological risks while developing unique strategies for creating new value and returns. However, a study by Yasuhiro Arikawa, an associate professor at Waseda University, in 2017 showed that Japanese companies ranked 26th out of 27 major countries in risk-taking and last in return on assets (ROA). This highlights the issue of low returns due to a lack of risk-taking. Japanese firms face various challenges due to this risk aversion. They...

Nikkei Inc., renowned for its economic news coverage, is set to cease publication of two of its specialty papers, Nikkei Sangyo Shimbun and Nikkei Veritas, by the end of the year. This decision comes amidst a challenging climate in the declining newspaper industry, exacerbated by surging costs for newsprint and a shortage of writers. Despite Nikkei’s relative advantage over other national newspapers, its flagship paper has seen its circulation halve from its peak, and growth in digital subscriptions has stagnated. The company marks the 50th anniversary of the Nikkei Sangyo Shimbun this October, a publication born to compete with the Nikkan Kogyo Shimbun during the industrial boom. It is known...

The recent depreciation of the yen has ignited a multifaceted discussion about its consequences and the evolving landscape of Japan’s economy. While this depreciation has certainly bolstered the export sector and improved corporate performance, it has also raised concerns about the impact on the average citizen’s purchasing power. Japan’s persistent structural trade deficits and its significant reliance on government spending have provided a safety net against fiscal collapse. However, this approach has come at the cost of eroding the credibility of its currency on the global stage. The currency markets bear the brunt of these adjustments, leading to the continuous depreciation of the yen. While this may benefit exporters and...

The New NISA (Small Investment Non-Taxable System), central to Prime Minister Kishida’s “Asset Income Doubling Plan,” is launching in January 2024. It offers a “Monthly Accumulation Investment Frame” for investment trusts and a “Growth Investment Frame” for stocks and investment trusts. With generous annual limits—¥1.2 million for Monthly Accumulation and ¥2.4 million for Growth, a lifetime cap of ¥18 million (¥12 million for Growth)—New NISA can cater to diverse investment needs. For asset management firms, not having their investment trusts qualify for New NISA can be a blow. This fear has led to a trend of exploring loopholes, resulting in what some might call “hidden actions.” To qualify for New...

A major mishap in Japan’s banking sector has caused a seismic shift in public trust, which took half a century to build. The National Bank Data Communication System (Zengin System), crucial for inter-bank transfers and foreign exchange transactions, experienced a catastrophic failure on October 10th, affecting 10 major financial institutions including Mitsubishi UFJ Bank and Resona Bank. For two full days, these banks were unable to process transfers, disrupting millions of transactions. The Zengin System is operated by the National Bank Funds Settlement Network, a subsidiary of the Japanese Bankers Association (JBA), which is overseen by executives from major banks. More than a month since the incident, the issue remains...

In Japan, a significant shift in wage payment methods is on the horizon with the legalization of “digital salaries” effective April 1 this year. This change allows companies to pay wages through cashless payment accounts like PayPay, revolutionizing the traditional cash-based salary system. Since 1975, salary payments were primarily made in cash, with bank account transfers becoming an accepted method, followed by securities comprehensive accounts in 1998. The addition of cashless payment accounts as an acceptable medium for wage distribution marks a significant evolution. However, this transition has hit a roadblock. PayPay and other financial transfer service providers like Rakuten Pay and KDDI (au Pay), along with Recruit MUFG Business’s...

The book known by the title “Bushido Capitalism” was penned by Kengo Sakurada, the Chairman of SOMPO Holdings (a Japanese financial services company) and former Chairman of the Japan Association of Corporate Executives (Keizai Doyukai). After being released in English in July 2021, it was translated by Satomi Shibata and subsequently released in Japan in January 2022. Sakurada, drawing inspiration from Inazo Nitobe’s “Bushido: The Soul of Japan,” wrote this book with the belief that the Japanese way of the warrior, or bushido, could offer insights to global business leaders. The book boasts of integrating fashionable business theories while lauding Sakurada’s own efforts in transforming SOMPO Holdings into a company...

The Bank of Japan decided on a policy amendment at the end of October that further rendered long-term interest rate operations a formality. This has now shifted the focus to the timing of the exit from negative interest rate policies. Market expectations are predominantly pointing to April next year. For instance, in an article published in mid-October, a survey by the Nikkei newspaper showed that out of 16 economists, 9 predicted April of the following year (with the monetary policy decision meeting set for the 25th and 26th). Adding one person who predicted January (with the meeting on the 22nd and 23rd), over 60% expect the policy to be lifted...

Medical device manufacturers such as Abbott and Terumo have funneled an annual 34 billion yen into the medical field, with Japan Medtronic at the top with 3.9 billion yen. In September 2023, a bribery scandal surrounding the selection of medical devices at the National Cancer Center East Hospital came to light. A physician formerly employed by the hospital and the former president of medical device maker Zeon Medical were arrested for accepting cash in exchange for product adoption. While incidents of financial misconduct between the medical device industry and healthcare providers have been increasingly reported, the full extent of the money flow from medical device companies to the healthcare sector...