The Recruiter's Desk
A highlight of news briefs and articles related to employment issues in Japan, as well as general business and industry.
TSE requirement for English disclosure viewed as a burden
April 18, 2024
A Reuters poll has found that nearly all Japanese companies view the Tokyo Stock Exchange's requirement to have top-tier firms disclose key financial statements in English as a burden. The poll also revealed that most firms are considering steps to improve capital efficiency, such as boosting shareholder returns, in response to the TSE's capital efficiency improvement drive.
The survey showed that 91% of respondents considered it a burden to make disclosure in English. Just over half of respondents plan to have a system in place to make disclosure in both Japanese and English by April 2025, when bilingual disclosure becomes a requirement for 1,600 firms on the Prime market. The poll also revealed that 53% of respondents are still considering measures in response to the capital efficiency drive.
Over half of firms plan to boost investor relations activity or invest for growth over the next six months, while 48% aim to boost shareholder returns and restructure their business portfolio.
Machinery orders on the upswing
April 15, 2024
Japan's core machinery orders rose significantly by 7.7% in February, exceeding economists' expectations and indicating a rebound in capital spending. This growth, the fastest since January 2023, followed a decline in the previous month. The rise in machinery orders is attributed to Japanese firms experiencing increased profits and raising wages, leading to higher investment.
Despite the positive outlook for capital spending, risks remain due to global economic uncertainty, such as the Middle East crisis potentially impacting oil prices. However, solid wage hikes by major companies are expected to boost domestic consumption and business confidence in capital investment plans.
The core orders data comes at a time of concerns over the weakening yen, which could lead to higher import prices and inflation. The Bank of Japan recently shifted away from its super-easy monetary policy after major firms offered significant pay raises. While the BOJ remains cautious about further policy tightening, the positive trend in capital spending could influence future decisions on monetary policy normalization.
Better wage conditions overseas, young Japanese workers find
April 14, 2024
Tomoki Yoshihara, a 25-year-old Japanese worker, has found better opportunities in Australia, where he earns three times more working at a meat-processing plant than he did in Japan's military. He is among a growing number of young Japanese choosing to work abroad on working holiday visas, attracted by higher wages and better living conditions. This trend is driven by a sense of dissatisfaction with Japan's economic outlook and stagnant wages. Despite recent wage increases and the end of negative interest rates in Japan, real wages still lag behind other advanced economies like Australia and the US. The gap in wages has led many Japanese to seek better opportunities overseas.
Australia is a particularly popular destination for Japanese workers, offering a generous visa system and attractive work opportunities. The country's perceived safety, time zone similarity, and relaxed rules for working holiday visa holders have made it a desirable location for Japanese workers. The trend of Japanese workers seeking opportunities abroad is expected to continue, with Canada, the UK, and New Zealand also issuing working holiday visas to Japanese nationals.
This outflow of Japanese workers could exacerbate labor shortages in Japan, particularly in small- and medium-sized businesses. Companies in Japan are already facing challenges in finding skilled workers, and the trend of Japanese workers seeking opportunities abroad could worsen the situation. However, the future movement of Japanese workers will depend on the economic conditions and prospects in Japan.
Google to invest in new undersea cables
April 11, 2024
Google has announced a $1 billion investment to enhance digital connectivity between the U.S. and Japan with the construction of two new subsea cables. This move comes as part of efforts to strengthen ties between the two countries, with President Joe Biden emphasizing telecommunications as a national security issue. The new subsea cables, Proa and Taihei, will not only connect the U.S. and Japan but also various Pacific island countries and territories.
The United States and Japan, in cooperation with other partners, aim to build more resilient networks in the Pacific region to counter China’s growing influence in the area. Last year, the U.S. committed to funding two undersea cables connecting Guam with hubs in Fiji and French Polynesia. Google, in collaboration with Japanese companies like KDDI and Arteria Networks, will work on building these subsea cables and improving digital connectivity in the region.
Subsea cables are vital for internet connectivity, handling the majority of global data traffic. Google’s investment highlights the importance of secure and reliable digital infrastructure in today's interconnected world.
Game arcades decline by 8,000 over past decade
April 9, 2024
The number of arcades in Japan has declined significantly over the past decade, with nearly 8,000 arcades closing down. The financial analyst firm Teikoku Databank reported that there were 18 cases of 'game centers' going bankrupt in the last financial year, marking the highest number in the past five years.
The decline in arcades has been attributed to factors such as operating costs increases, including consumption tax hikes, coin exchange fees, and electricity rate hikes. Crane games have become popular, making it challenging for arcades to attract customers with traditional arcade machines. This focus on crane games has also made businesses vulnerable to increases in prize costs. The profitability of game center operating companies has been low, with an average operating profit of only 6 yen per 100 yen of sales.
The decline in arcades predates the pandemic, with a significant decrease in the number of arcades across Japan reported in recent years. Sega ended its 50-year association with Japan's game centers in 2022, with its iconic arcade branding disappearing from Tokyo.
Japan’s games industry Galapagos Syndrome effect relaxing
April 4, 2024
The Japanese games industry, particularly in the realm of mobile gaming, has long been seen as a unique and isolated market. However, recent shifts in the industry are challenging this perception. While mobile gaming has been a dominant force in Japan, the market is evolving, with companies like CyGames branching out into console gaming. This shift is also evident at events like the Tokyo Game Show, where mobile games are no longer the sole focus and PC and console gaming are gaining prominence.
The rise of PC gaming in Japan, fueled in part by the success of the Nintendo Switch, is changing the landscape of the industry. This shift is also leading to a broader embrace of non-domestic titles and international collaborations. For example, Microsoft has been focusing more on the Japanese market in recent years, recognizing the growth potential of the region.
The popularity of the Nintendo Switch, with its hybrid nature, is also influencing the gaming preferences of consumers in Japan. The ability to play games anywhere and the perceived safety and quality of console gaming compared to mobile gaming are driving the preference for consoles among Japanese gamers.
Furthermore, the growth of eSports and the engagement of younger audiences with competitive gaming are reshaping the industry. Tokyo Game Show has become a hub for eSports events, showcasing the growing appeal of competitive gaming in Japan. This trend is also reflected in the rise of gaming cafes and the incorporation of gaming experiences into real-world settings.
Overall, the Japanese gaming market is in a state of transition. While it has long been known for its insular nature, the industry is becoming more international and diverse, embracing new platforms, developers, and experiences from around the world. Events like Tokyo Game Show serve as a barometer for these changes, showing a market that is evolving and adapting to the desires of modern players.
Japan to finance chipmaker Rapidus
April 2, 2024
Japan has approved a substantial amount of subsidies, totaling ¥590 billion, for chip venture Rapidus Corp. This funding will assist Rapidus in purchasing chipmaking equipment and developing advanced back-end chipmaking processes. The goal is to enhance Japan's semiconductor manufacturing capabilities and compete with industry leaders like Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.
The additional funding for Rapidus comes on top of ¥330 billion the startup has already received in a bid to mass produce chips in Hokkaido. This move aligns with Japan's broader strategy to regain its chipmaking prowess, with Prime Minister Fumio Kishida aiming to provide ¥10 trillion in financial support to chipmakers, both public and private.
Growing global tensions have led many countries, including the US and Japan, to bolster their domestic semiconductor capabilities. This is seen as crucial for various industries, including automotive, power, defense, and consumer electronics. Rapidus is collaborating with Japanese researchers to close the gap with TSMC in cutting-edge fabrication technology.
The allocated subsidies will be used to set up equipment for the pilot line at Rapidus's Chitose plant, engage IBM researchers, develop advanced packaging technologies, and enhance production control systems. These funds are instrumental in helping Rapidus achieve its goal of mass producing semiconductors using 2-nanometer processes by 2027 and streamlining production cycles to outpace competitors.
Economy Minister Ken Saito emphasized the significance of semiconductors for Japan's industries and economic future. He highlighted the role of chips in digitalization, decarbonization, and economic security. The subsidies aim to address Japan's previous stagnation and loss of competitiveness by acknowledging the foundational importance of semiconductors.
Japan to increase disabled worker quota
April 1, 2024
The Japanese government has increased the required ratio of employees with disabilities in the private sector to 2.5 percent starting April 1, with plans to raise it to 2.7 percent by July 2026.
The labor and welfare ministry reports a growing number of people with disabilities employed in private firms, estimating over 1.1 million by June 2023. However, only half of companies with over 43.5 employees reached the previous 2.3 percent quota.
The new rule applies to businesses with 40 employees or more, with subsidies offered to those hiring disabled individuals. Companies failing to meet the quota may have their names publicly disclosed by the ministry.
Standard Chartered predicts imminent yen intervention
March 28, 2024
Japan is on the brink of intervening in the yen as it continues to weaken, with the currency hitting multi-decade lows against the U.S. dollar.
Steven Englander from Standard Chartered Bank believes that Japanese authorities are very close to stepping in, as there is no demand for a weaker yen. Market speculation has grown over potential intervention, with officials signaling a readiness to act against disorderly FX moves. The aim of any intervention would be to buy time until the Federal Reserve cuts interest rates or the Bank of Japan increases rates.
Englander pointed out that previous yen interventions have been successful, despite investor skepticism. The Bank of Japan recently made a historic move by ending its negative interest rate regime, but this did not prevent the yen from weakening.
In contrast, the Federal Reserve has indicated plans for multiple rate cuts in the near future. Overall, Japan's potential intervention in the yen is seen as a temporary measure until more substantial changes in interest rates occur.
Finance Ministry ready to respond to yen movements
March 25, 2024
Japan's vice finance minister for international affairs, Masato Kanda, cautioned against speculators selling off the yen, stating that its current weakness against the dollar did not reflect underlying fundamentals. The yen was hovering near a 32-year low of around 152 to the dollar, with significant fluctuations of 4% in just the past two weeks. Kanda described these moves as speculative and expressed concern about the situation.
Despite the weakening yen potentially leading to higher costs of living due to more expensive imports, the Japanese government has not taken aggressive measures to intervene in the currency market. Analysts believe that officials may not view the weak yen as a major crisis, especially compared to previous interventions when the yen broke past 145 to the dollar in 2022.
Kanda emphasized that the weak yen has both positive and negative aspects for different economic players. He did not specify a target exchange rate at which intervention might occur, but he did stress that he is closely monitoring the situation and is prepared to respond appropriately.
The yen was trading around 151.27 to the dollar on Monday morning, with experts suggesting that despite Kanda's warnings, intervention may not occur even if the dollar reaches 155 yen.
Union calls out record wage hikes
March 16, 2024
Japan's largest companies have agreed to raise wages by 5.28% for 2024, marking the highest pay hikes in 33 years. This move comes as the Bank of Japan considers ending its negative interest rate policy. The increase, which exceeded expectations, is expected to boost household spending and support the country's economic growth. Trade union group Rengo had been pushing for raises exceeding 3% in base pay, with analysts expecting a rise of over 4%.
Rengo represents around 7 million workers, many of whom work at major firms. The wage hikes are anticipated to have a positive impact on part-time workers as well, with a projected 6% increase in pay for this fiscal year. The government hopes that these raises will benefit smaller and medium-sized companies, which make up the majority of enterprises in Japan. However, many of these businesses may struggle to pass on higher costs to customers.
The ongoing labor negotiations, including a significant pay increase from Toyota Motor, suggest a positive economic outlook for Japan. Amidst chronic labor shortages and Prime Minister Fumio Kishida's efforts to combat deflation, these wage hikes are seen as crucial for economic revival. The annual pay negotiations, known as "shunto" or "spring labor offensive," reflect the collaborative relationship between labor and management in Japan.
Overall, the wage increases are expected to support economic growth, alleviate income inequality, and contribute to a more stable economy. The move towards higher wages aligns with Japan's efforts to address longstanding economic challenges and boost consumer spending.
Recession avoided – technically
March 11, 2024
Japan's economy narrowly avoided a technical recession as official GDP figures for the last quarter of 2023 were revised to show a 0.4% growth compared to the previous year. Initial data had indicated two consecutive quarters of economic contraction, which would have met the definition of a recession. Expectations were for a higher revision, with some economists predicting a 1% increase in GDP.
Despite hopes that Japan had escaped a recession, private consumption fell by 0.3%, and uncertainties remain due to factors like China's economic slowdown and production halts at Daihatsu. The revision comes amidst speculation that the Bank of Japan may soon raise interest rates, as the current -0.1% rate has been in place since 2016.
Negative rates were meant to stimulate spending and investment by lowering the yen's value, but the Nikkei 225 index dipped 2.5% following the revised GDP figures.
Doubling of skilled foreign workers considered
March 6, 2024
The government of Japan is considering raising the cap on the number of foreign workers with specified skills accepted under a special residency status to more than 800,000 over a five-year period starting in fiscal 2024. This is in response to severe labor shortages in various sectors. The two types of residency statuses for skilled workers allow them to live and work in Japan for extended periods, with Type 1 covering 12 areas like nursing care and agriculture, and Type 2 for highly skilled workers.
To address labor shortages in sectors like automobile transport and forestry, the government plans to expand the scope of Type 1 status. The current limits on accepting foreign workers aim to prevent employment issues among Japanese citizens. The shortage of labor is expected to surpass 800,000 workers, even with improvements in wages and productivity for Japanese workers.
The government also plans to grant vocational school graduates in Japan equivalent residency status to university graduates, allowing them to work in Japan under more flexible visa categories. These changes aim to increase the number of foreign vocational school graduates finding employment in Japan by around 3,000.
Surname changes for married Japanese may soon be coming
February 20, 2024
Akiko Saikawa, a Tokyo office worker, experienced administrative difficulties after getting married due to the requirement for married women to change their surname in Japan. The outdated law forbids married couples from using separate surnames, but in 95% of cases, it is the woman who changes her name, reinforcing gender inequality.
Campaigners argue that this outdated law creates administrative burdens and hinders career development, with female executives facing challenges during overseas business trips due to mismatched IDs. Business leaders, including Shiseido CEO Masahiko Uotani, and the Japan Business Federation, have joined the call for change, emphasizing the barrier the current system poses to women's advancement in the workplace.
Despite allowing maiden names alongside married names on some official documents, Japan remains the only country mandating spouses to share a surname. Prime Minister Fumio Kishida has called for public discussion to build support for the change, while Saikawa advocates for separate surnames to avoid career disruptions and maintain a connection to family history and individual identity.
University of Tokyo expanding foreign student volume
February 19, 2024
The University of Tokyo is planning to introduce a new five-year combined Bachelor's and Master's degree program starting in fall 2027. Half of the 100-student capacity will be reserved for foreign students. The interdisciplinary college of design program will focus on addressing global issues like climate change and will allow students to take courses across various fields of study. The program will also offer classes to students from other faculties within the university.
Students will be required to gain one year of experience outside the university through internships or studying abroad. The program will be taught in English and will have a different admissions process to ensure diversity in student backgrounds. The university aims to increase the ratio of foreign students at both undergraduate and graduate levels by 2049.
Foreign researchers will be invited to teach courses in the program using funds generated from the university's investments. The details of the entrance examinations and graduation requirements will be finalized by March 2025.
Japan tech company makes data transferral easier
February 18, 2024
Rakuten Symphony has launched its cloud storage service, Rakuten Drive, in Japan, offering 10GB of free storage and unlimited file transfer. The service is designed for both individuals and businesses, providing secure file storage and sharing on the cloud. Users can view and edit documents and spreadsheets in Microsoft 365 in real-time. Rakuten Drive, previously known as Sendy, has seen significant growth since being acquired by Rakuten Symphony in 2021.
The CEO of Rakuten Symphony Korea, Ryan Son, emphasizes the importance of safely managing personal and business files with Rakuten Drive. The consumer version is integrated with Rakuten ID, allowing the 100 million Rakuten members in Japan to access the service with their existing login details. Rakuten Symphony ensures strict data storage and information security policies for Rakuten Drive.
In the future, Rakuten Symphony plans to add more features for the business-to-business market, supporting freelancers, small businesses, and large enterprises. They are also considering integrating Rakuten Points, the company's loyalty program, into Rakuten Drive.
Groundbreaking lawsuit by foreign-born residents alleging racial profiling
January 31, 2024
Three foreign-born residents of Japan have filed a lawsuit against the national and local governments over alleged illegal questioning by police based on racial profiling. This lawsuit is a first in Japan and comes amid a sharp rise in foreign workers coming to the country to help stem labor shortages as the population ages and declines.
The lawsuit also comes amid a renewed debate over what it means to be and look Japanese, after a Ukrainian-born, naturalized Japanese citizen was crowned Miss Japan last week.
The plaintiffs demand that the national, Tokyo Metropolitan, and Aichi Prefecture governments recognize that it is illegal for police officers to stop and question people solely on the basis of their race, nationality, or ethnicity. They claim to have suffered distress from repeated police questioning based on their appearance and ethnicity, which they say is a violation of the constitution.
The lawsuit seeks 3 million yen (about $20,250) in damages for each plaintiff. The Tokyo Metropolitan Government, Aichi Prefectural Government, and National Police Agency have so far declined to comment.
Coercive contraception treatments undergone by Vietnamese trainees
January 25, 2024
A Kyodo News survey uncovered that female Vietnamese technical trainees were encouraged to participate in contraceptive programs, raising worries about their reproductive freedoms. The Japanese government is thinking about rejecting the ongoing specialized temporary job program for foreign trainees, which started in 1993 as a means to provide training to non-industrial nations. Vietnam, according to the Organization for Technical Intern Training, sends the largest number of such trainees.
The study uncovered that organizers for sending trainees to Japan had advised nine women to go through preventative treatment, five of whom receiving internal birth control rings on the understanding that they would be sent back to Vietnam should they get pregnant. One woman explained her belief that the contraceptive process was a requirement to take part in the program.
Coercion and discrimination against workers is not allowed under Japanese law, and foreign workers are entitled to childbirth and childcare benefits just as Japanese nationals are.
A Japan Immigration Services Agency official expressed concern that contraceptive treatment be given without the individual's assent, pointing out that people should be treated fairly, regardless of their nationality.