カテゴリー: Message from Tokyo

The rainy season, TSUYU, has started in Tokyo. The weather was nice today, but it is certain we have rainy days ahead. Oh, I am talking about the weather, not about stock markets in Japan. 

TOPICS: PM Noda says Reactors are vital for way of life, and he gave green signal to restart 2 reactors at Oi nuclear plant in Fukui Prefecture. This  is the first case of restart of nuclear power plants, after 50 of nuclear power plants are stalled in early May 2012. Government says that without the two units, electric supply shortage of this summer will reach as high as 15% in Kansai area. 

Governor of Fukui support Noda’s move and ready to approve to the restart of Oi plant. Government-controlled scholars echo the comments of the safety of the reactors. Although not much new safety measures were provided,  they conclude that the safety of the Oi plant is guaranteed even the earthquake and tsunami same level as Fukushima occur       

We have been puzzled by the decision of DPJ government since it took the office in August 2010. PM Noda should give the alternatives to the people of Japan. We are at the stage to choose Acceptable Uncertainty or Unacceptable Uncertainty.

Electric power shortage during summer is ACCEPTABLE UNCERTAINTY. The possible damage on the nucler power plan is UNACCEPTABLE UNCERTAINTY. The choice is so obvious, and the choice is NOT what PM Noda proposes.

STOCK MARKETS:                                June 8              June 1               ChangeNikkei      8459.26             8440.25             0.22% TOPIX     717.74               708.93               1.24% 

The Japanese markets will start positive affected by the taking-a-breath at Euro-zone. The move after that is really hard to tell, as the markets around the world will soon recognize that the Euro-crisis is far from over.

POLITICS:

Mr.Noda gave green signal to restart Oi nuclear plant. I believe this will lose the support to DPJ fundamentally.  Political scene of Japan is very fluid again. This political risk is the largest risk factor to the stock markets.  I think the most likely scenario is Noda is going to split DPJ and makes alliance with LDP to form a new government.        

ECONOMY:

There are many mixed economic figures during last week. I appreciate the recent announcement of GDP growth of 4.7% pa.           NUCLEAR ACCIDENT & EARTH QUAKE

The radiation level of Tokyo is 0.048 sievert this morning. 0.001 lower than  that of  last week. The life in Tokyo is normal.

OVER 

 

Impressed by Peter Drucker’s masterpiece “Adventures of a bystander,” which I read recently, I try to express my comments on Japan, its economic & political scenes as a third party or a bystander.

TOPICS :         PROBERBS and SAYINGS AORUND the WORLD which fit today’s world. 

         It is all GREEK to me.

The Pain in SPAIN WOULD NOT stay mainly in the plain.

(Obviously, the original is “The rain in Spain stays mainly in the plain.”)

The death of the Equity.Cash is King.Dammed if you Do, dammed if you Don’t. 

         As a personal investor, I would keep my investment all in cash.         This, however, will be a great FALLACY OF COMPOSITION to an institutional investor like PNB. 

STOCK MARKET:                                June 1              May 25               ChangeNikkei      8440.25            8580.39              -1.63% TOPIX     708.93               722.11               -1.82% 

              The Japanese market is strongly affected by off-risk sentiment. TOPIX was down 9 consecutive weeks.Without having new positive news, the market will keep downward trends tor the week.                                                                POLITICS:              Mr. Noda held meetings with Mr. Ozawa, an opponent in the governing DPJ, who is openly against the consumption tax hike.             No conclusion from the meetings. Noda will seek the support from LDP, which has been announcing the necessity consumption tax hike for several years.                           Political scene of Japan is very fluid again. This political risk is the largest risk factor to the stock markets.              I think the most likely scenario is Noda is going to split DPJ and makes alliance with LDP to form a new government.         ECONOMY:             Retail comsumption looks strong. Cloths for HOT Summer because of electricity shortage are selling well.

             Mr. Shirakawa, Governor of BOJ, is expected to make encouraging comments on economy. 

          NUCLEAR ACCIDENT & EARTH QUAKE              The radiation level of Tokyo is 0.049 sievert this morning. Same level as that of  last week. The life in Tokyo is normal.

           

Over.  

There has been not much message from Japanese citizens on Fukushima nuclear accident to outside Japan in English. I will try to do so to let people outside Japan to understand the situations in Japan. Today, I would like to give my comments on the recent announcement by Japanese government on shifting INES Level from 5 to 7, same as Chernobyl.

There was an announcement from the Japanese government  on April 12, 2011, that it raised its assessment of the severity rating on the International Nuclear Event scale from 5 to 7. This is the same level as Chernobyl. 

I have following comments for your reference. 

Severity rating 7 itself only means that the accident is the worst nuclear disaster. The rating change does mean the recent situation has been deteriorated. Japanese government has been saying the level is 5. They say the reason of keeping rate 5 was because it took time to gather information, which I believe a white lie. Many Japanese knew the situation was as serious as Chernobyl.On April 12

, Japanese government and even IAEA says the radioactive materials from Fukushima has been about 10% of that from Chernobyl, meaning the seriousness at Fukushima has been less than that of Chernobyl. I feel sympathy to the government’s inclination  to say small about the seriousness of a disaster to keep the people feel safe. This logic has been OK in a closed society, but will lose confidence from our friends in the world where all information will spread instantly.  

Fukushima Plant seems to be static past week even facing several aftershocks. The highly polluted water is now to be pumped out from the basement of the plant. The worst case scenario of melting down reactors has been avoided up to now, but the cooling down reactors should be continued and low level radiation will continue to be leaking from the Fukushima Plant. This is the fact which we have to face.Whether rating is 5 or 7, each of us who lives in Japan has to do is to be very careful about our exposure to the low level radioactive materials.

The maximum radiation level in Tokyo recently was around 0.08-0.09 microsievert per hour, a very low level. (Actually, it’s lower than that of Hong Kong.) The residents in Japan, however, have to live with this low level radiation for a long time.

Without gulping the government announcement, it is important to have our own yard stick and judge the situation carefully and wisely.