Japan: The Land of the Rising CDS

Canary in the coal mine? The cost of insuring Japanese government bonds against default has doubled to 0.75 percentage point in the past three months, as markets fret about debt issuance. Credit risk is assuming ever-greater stature in government-bond markets previously blithely assumed to be risk-free.

Japan’s debt problem is becoming urgent. It is grappling with issues other governments such as the U.S. and the U.K. will face, but is much further down the road already.

Its debt-to-gross-domestic-product ratio is set to rise to a staggering 227% in 2010, the International Monetary Fund forecasts, making it particularly exposed to any rise in market interest rates. Japan’s aging population is a crucial concern, driving a change from saving, much of which went into JGBs, to consuming.(By RICHARD BARLEY,The Wall Street Journal, NOVEMBER 11, 2009)

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Cheap and Trendy Gains as Luxury Fades in Japan

TOKYO—As major luxury brands in Japan delay store openings or quietly slink away from what was once their largest single market, two recent foreign entrants on the other end of the spectrum are aggressively plotting their expansion: Hennes & Mauritz and Forever 21.

Both Forever 21 and H&M are purveyors of “fast fashion”—their shops feature cheap, trendy clothes, with new items hitting the shop floor on a daily basis. In brand-obsessed Japan, the success of both stores underlines a deep shift in consumers’ mentality, as shoppers put value ahead of logos.

Privately owned Forever 21, which entered the market in April with a shop in Harajuku, is aiming to open two to three more stores in Japan over the next nine to 12 months, said Larry Meyer, its chief financial officer.(By MARIKO SANCHANTA,Wall Street Journal, NOVEMBER 10, 2009)

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Wal-Mart’s Painful Lessons

It’s rare that a $100 billion business can be marginalized, but such is the case with the international arm of Wal-Mart Stores (WMT). As a stand-alone company, it would rank among the top five global retailers. Inside the $401 billion retail giant, though, the business has traditionally received short shrift. Its Bentonville (Ark.) headquarters is underwhelming—a drab, largely windowless, one-story structure named after Bill Mitchell, a former Walmart executive whom nobody seems to remember. (By Matthew Boyle, Business Week)

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NKITA Supports: Japan America Society of Greater Cincinnati

RECESSION SURVIVAL TIPS ON COST-CUTTING STRATEGIES FOR THE MANUFACTURING SECTOR: An Open Forum “INFORUM” Tradeshow and Breakfast brought to you by the Japan America Society of Greater Cincinnati.

When: Friday, May 1st, 8:00 a.m.-11:00 a.m.
Where: Crowne Plaza Hotels Cincinnati-Blue Ash
5901 Pfeiffer Rd, Cincinnati 45242
GRAND BALLROOM

Register today!

Japan: Google’s Real-Life Lab

Cutting-edge phones, discerning consumers, and speedy connections make for rich feedback (K. Hall, BusinessWeek, February 14, 2008). Read more