There aren’t any big news out yet, so trading seems to be remarkably thin so far today. The developments to keep an eye out for would be the Japanese post-lunch period as the BOJ’s decisions comes then, off the back of recession data and Abe Shinzo going against the wishes of Kuroda Haruhiko. This leads to small momentum shifts, with mild declines across Chinese and Hong Kong shares, with mild gains in Japanese equivalents as the yen keeps hitting new lows. At last check the yen was at 117.2 at lowest to the US dollar, and 146.8 to the euro, but trading at 0.1 below each.
In the wake of any news, it is perhaps better to read up on the market-moving developments and how the factors pushing markets around might be influenced by news. Bloomberg offers up a great opportunity for just that with a summary of Abenomics and what it has accomplished, where it has fallen short and what the challenges will be going forwards. This will probably shape the political debate in the month going forwards, and I see the opposition Democratic Party of Japan (DPJ) targeting his failures in their own policy mix, while hopefully Abe will look towards meeting the challenges Japan are now facing.
I won’t recant the whole laundry list, it’s pretty old hat of stuff I’ve reported on so far when it comes to Japan, but there are a few gems and summaries worth noting that I’ll bring up here. It is definitely worth reading for the concise summary of the major points of Abenomics, and a good place to start thinking about Abe’s policy mix. As with any summary it just doesn’t go in-depth. Anyhow, here are some great takeaways from it.
- Less than 60% of Japanese TOPIX-listed companies have independent outside advisers in their board rooms? Ouch. Japan, please, fix this post-haste! This is arguably a company issue rather than a political reform decision, but boots need to be put on necks unless this changes.
- We knew that the Japanese female manager is a rare occurrence, and 6% has been heard of before, but that 52% of companies don’t have any female managers? Diversity, amirite? Sure, the Japanese woman was expected to take care of the family, but this structure is fraying, and definitely needs to in the future. What this means is that a majority of companies in Japan can’t even provide female stars any mentors or support structures of people who have experienced their own future challenges when they’re trying to promote diversity. I have no clue how to reform this effectively, but whatever can be done needs to be done.
- The details need to come out on corporate tax reform. “Somewhere in the ‘twenties'” is a nice change from above 35% corporate taxes, but you have four months before the next Japanese fiscal year starts, so now would be a good time to start talking on how you would reform this. I am somewhat of the opinion that lowering corporate taxation isn’t as important for Japan overall as making payrolls cheaper, but the corporate tax is a big detriment to starting new companies or taking new risks. I will be eagerly awaiting any details out of prospects for reforming the conditions for company ownership.
Abe, you have a lot to prove on how you’ll change Japan, so start telling the Japanese people why they should trust you to do it.