Japan

The crew that was dead set against raising consumption tax in Japan will be feeling vindicated. The economy unexpectedly fell back into recession in the third quarter, contracting 0.4 per cent quarter on quarter, or 1.6 per cent on an annualised basis. That makes it highly unlikely that prime minister Shinzo Abe will push ahead with a second round of VAT hikes, from 8 per cent to 10 per cent, after the first increase from 5 per cent in April. At least for now.

Here are seven charts showing the worrying side of Abenomics, and some reasons to be hopeful. Read more

 Read more

  • Relations between Beijing and Tokyo are at a 40-year low amid territorial disputes and rising nationalist rhetoric, but with the leaders set to meet, can they do anything to ease tensions?
  • Catalans will turn out on Sunday to cast votes on the region’s independence despite Spanish courts suspending the ballot, said a leading grassroots activist who called for unity in the separatist movement
  • After mass protests in Taiwan earlier this year against perceived moves towards closer ties with China, Beijing’s plan to lure back Tapei into its embrace risks backfiring
  • Myanmar has given its Rohingya minority a dispiriting choice: prove your family has lived here for more than 60 years and qualify for second-class citizenship, or be placed in camps and face deportation, reports NYT
  • A chilling video dispatch by Vice on the creeping presence of the Islamic State of Iraq and the Levant (Isis) in Lebanon

 Read more

What hopes for detente between Japan and China?
What are the prospects for some form of detente between Japan and China? Ahead of next week’s Apec summit, where leaders of the two countries are expected to meet, Ben Hall discusses the reasons for the strained relations between the two countries with Beijing bureau chief Jamil Anderlini and David Pilling, Asia editor.

 Read more

By Gideon Rachman

In 1990 Kenichi Ohmae, a management consultant, published a book called The Borderless World, whose title captured the spirit of globalisation. Over the next almost 25 years developments in business, finance, technology and politics seemed to confirm the inexorable decline of borders and the nation states they protected.

Japan’s Government Investment Pension Fund, the world’s largest pool of publicly managed pension assets, is poised to make a change to its investment strategy that has equity markets salivating. Indications are that a review of its allocation guidelines, expected to be wrapped up next month, will raise the percentage of the fund’s roughly Y127tn ($1.3tn) portfolio that is dedicated to Japanese stocks, while reducing holdings of Japanese bonds.

The GPIF’s current guidelines are risk-averse by global standards, with the majority of the model portfolio dedicated to low-yielding Japanese public debt and just 12 per cent given over to domestic equities. Under the new guidelines, the equity level looks likely to rise to 20 per cent – a change that could send trillions of yen flowing into the Topix, the Nikkei and other Japanese share indices. And as of this week, key investment decisions will be made by the fund’s investment board, rather than Takahiro Mitani, its president. Read more

By Gideon Rachman
Atlanta coined the catchphrase that it was the city that was “too busy to hate”. During the past 30 years, the countries of Asia have informally adopted that slogan and transferred it to a whole continent. Since the end of the 1970s, the biggest Asian nations have forgotten about fighting each other – and concentrated on the serious business of getting rich. The results have been spectacular. But there are now alarming signs that East Asia’s giants are pursuing dangerous new priorities, and diverting their energy into angry nationalism and territorial disputes.

Obama’s state visit to Japan
This week, we look at Japan, where President Barack Obama is concluding a state visit. The US leader and Prime Minister Shinzo Abe have vital business to discuss, from Japan’s delicate and rather dangerous relationship with China, to the state of the Japanese economy and hopes for a major new trade deal. David Pilling, Asia editor, and Lindsay Whipp, former Tokyo correspondent, join Gideon Rachman to discuss

If there was a prize for which US president had had the more exclusive and expensive Japanese dining experience, Barack Obama would beat George W Bush hands down.

The incumbent US leader and his Japanese counterpart Shinzo Abe dined in one of Japan’s – and thus the world’s – most exclusive sushi restaurants on Wednesday night – Sukiyabashi Jiro, where only 10 people can squeeze along the counter and there is one choice on the menu – a $300 course of exquisite sushi. Read more