A New Beginning in Japan: Glimmers of False Hope
Wolf Richter www.testosteronepit.com
April 1 is a new beginning in the Japanese calendar and coincides roughly with the much anticipated arrival of cherry blossoms. The first ethereal pink was sighted last week on an otherwise naked branch of a cherry tree in Kochi Prefecture, on Shikoku Island. Now blossoms have appeared in Tokyo. Full bloom is expected by Friday. Last year, after the horrific Great East Japan Earthquake and tsunami that took over 18,000 lives, most cherry-blossom viewing events and festivals had been canceled—at great cost to the industry that has sprung up around cherry blossoms. But this year, people appear eager once again to go places and spend money during the festivities.
April 1—this year, April 2—is also the beginning of the corporate year. Newly recruited college graduates show up for their first day of work and are welcomed with entrance ceremonies and speeches. When universities spit them out in March at the end of the academic year, they need to have a job offer in hand. If they don't, their chances of ever entering a career are minimal due to the rigidities of the system. By Japanese standards, the employment picture for graduates had been morose for years—“lost generation” they’re called. Then the financial crisis hit and hiring fell off a cliff. In 2008, 88.7% of the graduates had job offers. By 2011, it was down to 77.4%. Nearly a quarter of all graduates saw their visions of becoming a pillar of Japanese society vanish.
So when the Ministry of Health, Labor, and Welfare reported that a still dismal 80.5% of the grads had accepted a job offer by February 1, it was greeted with relief. An estimated 800,000 new employees walked into their first jobs today, up from 776,000 in 2011, the lowest point since 2000 when collection of this data began. Banks went on a mini hiring spree. For example, Sumitomo Mitsui Financial Group hired 810 graduates this year, up from 709 last year, but down from 2,090 in 2009.
The overall jobs picture has improved as well. Unemployment for February, reported Friday, edged down to 4.5%, and unemployment among the 15-24-year-olds fell to 9.2% from 9.5%. With three jobs for four applicants, it was still dismal, but after nine consecutive months of increases, it was the best reading since November 2008. And a jump from November 2009, when there were more than twice as many applicants as job openings.
Even beleaguered Prime Minister Yoshihiko Noda got his first respite on the relentlessly steep slope down the approval ratings. All Japanese prime ministers since Koizumi slither down that slope for 8-15 months. When their popularity drops into the low twenties, Japan Inc. sees to it that they're axed. But on the way down, they have a brief uptick. And Noda is having his—a tiny 2.6 percentage points to 31.6%.
But not everything is suddenly rosy in Japan. Today, the Bank of Japan released its tankan quarterly survey of over 10,000 manufacturers: minus 4, unchanged from its lousy reading in December. While coddled large companies became more optimistic, small and medium firms (ominously) became even more pessimistic, in part due to the catastrophic power situation.
TEPCO, the bailed out owner of the Fukushima nuclear power plant, is trying to shove rate increases of 17% down the throats of its commercial customers—while rationing power at the same time. Power shortages will spread across most of Japan this summer as the last of 54 nuclear power plants will be taken off line in a few weeks. While pressure is building to restart some of them, public distrust and resistance run high, particularly after revelations seeped out about the nuclear industry’s controlling relationship with its regulators. Japan Inc. at work. The conspiracy had squashed stiffer regulations for nuclear emergencies. Five years later, the people of Fukushima paid the price. For that fiasco, the emails that documented it, its deadly and ongoing impact, and the anger it caused, read... A Revolt, the Quiet Japanese Way.
But it’s a two-edged sword. Shortages of up to 20% this summer are expected to strangle the highly industrialized Osaka area, and companies are shifting production overseas. Now a panel of the Osaka municipal and prefectural governments floated a plan for the city of Osaka to demand that Kansai Electric Power shut down its nuclear power plants permanently. Mayor Toru Hashimoto has come out in support. Largest shareholder with an ownership of 9%, Osaka has some pull though it is unlikely to prevail over almighty Kansai Power.
But on the Japanese internet, there has been something ... lighter. And utterly cynical. It shows just how much trust the people have left in TEPCO and the government. Read: Nuclear Contamination As Seen By Japanese Humor (mostly pics).
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