Forums / Property Investing / Overseas Deals / Japan (and its Real-Estate market) Rides Again

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  • Profile photo of FreckleFreckle
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    Death by a 1000 cuts continues I see. But hey I hear CRE is up….. whhoopy!!

    Misery Index Rising to 33-Year High on Abenomics: Japan Credit

    Profile photo of FreckleFreckle
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    It seems Japanese firms aren't listening to Uncle Abe… it's now raise wages or else!.. 

    Japan turns more and more into a basket case by the day. The similarity in Argentinean and Venezuelan government last ditch tactics to make economies do what they want it to do is all too familiar. 

    When governments start telling business what prices they can sell at, what wages will be and other dictatorial legislation and regulation that makes business conform to the communist socialist model you know things are getting closer to the end. The desperation is almost palpable.

    Japan to name, shame firms that refuse to hike pay

    ……last night the Japan labor ministry reported that monthly wages excluding overtime and bonus payments fell 0.2 percent in December from a year earlier to 241,525 yen on average per worker, a series of declines which has now stretched to 19 consecutive months.

    What say you comrade Ziv

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    So the "misery index", a funky name for a measure of, simply, inflation plus jobless rate, will rise to its highest level in 33 years, in a country that's been suffering from deflation in the last 25 years. Is it just me, or does it actually sound like a good sign, with the deflationary cycle finally eliminated?

    Interesting name, by the way – so a country that's been suffering from chronic deflation (or negative inflation numbers, in other words), would have virtually no "misery" indexing whatsoever, as long as it makes sure deflation is higher than jobless rates – brilliant!

    Here are some interesting excerpts from that very same article –

    Quote:
    …Toyota Motor Corp., forecasting a record 1.9 trillion yen ($18 billion) profit this fiscal year, agreed to increase base wages in Japan for the first time since 2008. The average Toyota Motor Workers’ Union member will earn 2,700 yen more in base pay per month, the nation’s largest carmaker said today. Toyota also will pay an average bonus of 2.44 million yen, the equivalent of 6.8 months of salary and the most in six years. Companies including Panasonic Corp., Hitachi Ltd. and Fujitsu Ltd. will raise base pay by 2,000 yen ($19) a month, the first increase in six years, the Nikkei reported on March 9. Nippon Telegraph & Telephone Corp.’s eight major group companies, including its mobile-phone unit, NTT Docomo Inc., will raise base salaries, the newspaper reported the following day….

    “Exiting deflation is positive for growth because it assists recovery in the job market,” said Takuji Aida, the Tokyo-based chief economist for Japan at Societe Generale SA, another primary dealer. “Even as the pace of growth in pay per worker lags behind the rise in the cost of living, expansion of employment will increase total wages.”…

    as for for wages excluding overtime and bonuses falling down – nice way to try and ignore the fact that the total including them has actually gone up, as we've discussed here previously. Please don't make me rehash the same info.

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of FreckleFreckle
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    zmagen wrote:

    as for for wages excluding overtime and bonuses falling down – nice way to try and ignore the fact that the total including them has actually gone up, as we've discussed here previously. Please don't make me rehash the same info.

    Let me see if I'm understanding you Comrade Ziv. 

    The total wages are up but on an individual per person basis they're down and that inflation growth that exceeds wage growth is OK because at least you don't have deflation which actually increases the buying power of the individual.

    Not sure if you actually figured it out that the wealth of the 99% is surely but slowly being transferred to the 1%. 

    I luved this one;

    “Exiting deflation is positive for growth because it assists recovery in the job market,” said Takuji Aida

    …and this guy's a Chef Economist no less. It's scary when we've got idoits like that in charge and even scarier when the masses can't tell there's an idiot at the wheel.

    Profile photo of FreckleFreckle
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    I see Abe's getting ready to stir the pot again. I sometimes think Abe is on a Kamikaze mission when it comes to Japan.

    Sorry for Nothing

    NEW YORK – Japanese Prime Minister Shinzo Abe is once again stirring Asia’s cauldron of national rivalries and historical resentments. This time, he has instructed a committee of historians to reexamine the official apology delivered in 1993 to World War II-era sex slaves held in Japanese military brothels. It is clear from various recent statements that some of Abe’s closest advisers believe that the apology was not in order, so the committee might well conclude that Japan was never officially involved in prostitution, and that its “sincere remorse” should therefore be withdrawn.

    What perverse reason could Abe have for pursuing such an outcome?

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    And on the other hand, in spite of your apocalyptic predictions to the contrary ("those xenophobic racist bigots will never allow more immigrants, and will all die out!"), Japan has finally introduced a skilled migration scheme (points based migration) similar to Australia's – no quota limits – making it officially easier to migrate to the land of the rising sun than it is to the USA ;) (and, insider's tip – a lot cheaper and easier than it is to migrate to Australia, too, since outcomes are truly based on case officer discretion, as opposed to automated computerised pass/fail algorithms) –

    JAPAN, AT LONG LAST, ADOPTS SKILLED MIGRATION POINTS SYSTEM

    (Gotta love the cute drawings attached, too ;))

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    Abe's just pandering to the elderly, nationalist vote – no apology will be retracted, but the "venerable historians committee" will pay lip service to those who want it done, that's all. If you really want to see how "racist" Japan is, feast your eyes on this –

    J-LEAGUE SHAMES RACIST FANS IN THE MOST AWESOME WAY POSSIBLE

    Quote:
    …J-League unleashed an incredible Zinedine Zedane headbutt-level can of whoopass on all involved in the incident, banning the fans who posted the sign for life, forcing the Reds to play their next game in an empty stadium, and banning Reds team supporters from displaying banners of any kind for the foreseeable future…

    or this –

    RACIST ANTI-KOREAN DEMONSTRATION MEETS 3 to 1 RESISTANCE IN TOKYO

    Quote:
    …Much to the surprise and chagrin of the Zaitokukai, however, they found themselves outnumbered three to one by a huge cluster of counter-protesters holding anti-racist signs and shouting down the right wingers as they marched…

    go, Japan :) 

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of FreckleFreckle
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    Hey you're not conning me… I'm no April fool ;-)

    Profile photo of Long JohnLong John
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    Have you ever heard the sound of disappointment?

    It tangles your head like a winter rose

    Comes up eager and shining

    And it likes to leave a scar before it goes

    Here comes that sinking feeling

    Here comes that sinking feeling

    Here comes that sinking feeling

    Here comes that sinking feeling

    Annie Lennox

    YouTube Clip

     

    The Japanese Sales Tax Hike Verdict Is In: It’s A Disaster As Sales Plunge

    Chinese Exports Collapse Leading To 2nd Largest Trade Deficit On Record

    Japan To Downgrade Economic Assessment In April, So More BOJ QE Right? (Spoiler Alert: No)

    Abe can’t take a trick these days but I’m sure property’s doing just fine.

    • This reply was modified 4 years, 7 months ago by Profile photo of Long John Long John.
    • This reply was modified 4 years, 7 months ago by Profile photo of Long John Long John.
    • This reply was modified 4 years, 7 months ago by Profile photo of Long John Long John.
    • This reply was modified 4 years, 7 months ago by Profile photo of Long John Long John.
    • This reply was modified 4 years, 7 months ago by Profile photo of Long John Long John.
    Profile photo of TerrywTerryw
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    i am in Japan now – 8% GST on goods is not easy to calculate and most things seem to be GST excluded on the market price.

    I don’t think it will have much of an effect, initially it may be a bit of a shock but once people are used to it they won’t feel it.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
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    Profile photo of Long JohnLong John
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    i am in Japan now – 8% GST on goods is not easy to calculate and most things seem to be GST excluded on the market price.

    I don’t think it will have much of an effect, initially it may be a bit of a shock but once people are used to it they won’t feel it.

    Had a mate many years ago who was made a paraplegic after a vehicle accident. He reckoned after 12 months you adapt and get used to it.

    Profile photo of Long JohnLong John
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    PMI (production) is crashing

    and wages are falling…

    everything must be alright

    • This reply was modified 4 years, 6 months ago by Profile photo of Long John Long John.
    • This reply was modified 4 years, 6 months ago by Profile photo of Long John Long John.
    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    To reply to your latest comments, here and on that other thread –

    The problem with Japan is that while you can make the numbers appear good right now going forward they can become extremely poor under what looks like an inevitable devaluation of the yen…If the yen heads to 200 as many are beginning to speculate…

    This is the first in a long string of speculations you’ve put forth that are nowhere near a certainty – while I can’t profess to know what will happen to the Yen, Japan’s economy (nor any other country’s) or the price of eggs on Mars, your assumption seems to completely ignore the other global forces in play here. Abe is actually pushing as hard as he can, bending things to just shy of breaking point, to get the Yen to devaluate to around 120, which is his exports-driven goal, but is having quite a hard time of it – so far the US didn’t even have to retaliate with any QE, since their mellow recovery is actually doing the job for them – but they still have room to push if and when this becomes the case – and this doesn’t even touch upon China, Australia or other, closer countries and their respective economies. To say the Yen will go to 200, post-WW2 figures, is a bit of a stretch, to put it mildly, and when put forth with such conviction as you seem to have is mildly perplexing, to say the least.

    …the wrong type of inflation…Incomes are declining in real terms and more in inflation adjusted returns which doesn’t support capital values…

    Again, you seem to be speculating with great conviction here. Reality, while no where nearly as conclusive as your wishful thinking reasoning, is actually pointing, ever so slightly, in the opposite direction, as latest indicators seem to suggest (and this is just basic wages catching up to the complete package, including overtime and bonuses, which has already been rising for the better part of the last 12 months) –

    Bloomberg – Japan Basic Wages Rise for the First Time in 22 Months in Response to Abenomics

    …A 14% annual return may look somewhat anemic after 5 years given the current economic picture and that it will take around 13 – 15 months to claw your entry costs back…

    Couldn’t quite follow this statement – what economic picture? If you look at the overall picture, and not at a temporary or single-quarterly currency of GDP fluctuation, which the sales tax and other regional issues will always bring about, things actually haven’t been this good since the bubble economy burst in the 1990s –

    Market Realist – Japan Business Conditions Haven’t been This Good for a Decade

    …As a result of the aggressive monetary and fiscal policies being employed, the Japanese yen has weakened 30% since late 2012 and has made a major contribution to the growth in profitability among Japan’s exporting companies…

    the non-manufacturing sector (the green line) has made a significant recovery, outpacing manufacturers on the recovery for the first time since the bubble economy burst in 1990. This points to a fairly broad-based recovery in Japan…

    corporate profits have begun to grow rapidly. Plus, the slack production capacity in Japan is out of the danger zone post-2008, and headed back to the 2007 levels. Should this trend continue, we might expect to see fixed investment data, as noted above, move back to the levels seen during the 2002–2006 period of expansion, when the Nikkei stood at 18,000—roughly 30% higher than the Nikkei is today…

    the worst is over as far as excess capacity is concerned. Given the current trend, it’s conceivable that capacity levels could reach the levels seen during the recent 2006 peak, pushing the capacity utilization operating ratio back to the 2007 highs as well…

    fixed investment recovery in Japan is finally accelerating and supporting growth…fixed investments as a percentage of corporate profits are at post-1998 peak levels, suggesting that there’s plenty of room for more investment…

    the willingness of Japanese banks to lend—nearly the best levels we’ve seen since 2007. With ultra low rates, ultra high cash levels, and growing corporate profits in Japan, this data would suggest the growth of a positive environment for Japanese equities…

    And it goes on and on…

    As for your opinions on the shrinking population and its reflection on the tenant base – for starters, at the moment, there are droves of people moving out of the dying villages and teeny tiny towns, and into capital cities and formerly small towns which are slowly conglomerating into bigger and bigger townships – so even for the short-medium term, there are now far more substantial investment hubs in Japan that have seen population growth in recent years (which is where property investors purchase in the vast majority of cases, unless looking for a mountain or ski slopes holiday home etc) – So not only Tokyo and Osaka, but now Sapporo, Nagoya, Fukuoka, Kumamoto and even smaller, formerly unheard of towns/cities like Kikoochi, Utsunomiya, Fuji city, and others, are now experiencing a growth in population, in sharp contrast to national trends.

    As for immigration, you write –

    … not only is Japan’s population getting older but it is also contracting. Just to hold their population requires immigration to jump to some crazy figure like 17 million which isn’t going to happen in this lifetime. So buyer demand is progressively falling off a cliff so to speak…

    Quite a long cliff to fall off, considering Japan is Asia-Pacific’s biggest property investment market. Not sure where you got your 17 million figure from, but regardless, not only has migration laws gone through two huge overhauls, the latest round of which has introduced skilled migration scheme to the country, but is now also officially considering increasing the number of migrants to around 200,000 a year, which government officials believe will keep the population stable –

    Japan Times – Japan may Boost Immigrant Numbers

    …The Sankei Shimbun reported Friday that the Abe administration has decided to consider accepting a massive number of immigrants, possibly as many as 200,000 a year, to make up for the rapid aging and shrinking of the Japanese population.

    “It is true (the Council on Economic and Fiscal Policy) is now having discussions to promote mid- to long-term development of Japan, with an eye on structural changes such as the shrinking of the population,” Suga, the top government spokesman, said during his daily news conference…

    Japan will be able to maintain a population of more than 100 million if it accepts 200,000 immigrants a year and the total fertility rate, a key indicator of a country’s birth trends, recovers to 2.07 by 2030 from the current 1.39

    The other point you forgot to mention – there’s more than one solution to Japan’s shrinking population – one is increased immigration, and yet another is re-enabling family support services, to allow women out of the vicious “Be a housewife or have a life” cycle they’re currently avoiding by remaining single in most cases – one of the major causes for population decline – this is an integral part of Abe’s latest policies as well.

    Bottom line – it’s great to speculate, but really, we (and our clients) generally follow the three rules outlined time and time again – 1. Achieve reasonable monthly cashflow in reasonable tenant base localles
    2. Don’t invest with money you’ll need back in a hurry (i.e. to pay a mortgage back home or live off, etc)
    3. Pad your forex transfers and always leave extras behind, hedge your currencies and investments, and allow ample timeframes for transfers

    Follow these three, and you’re guaranteed to ride the booms and busts of whichever market you choose to invest in. In fact, you’ll be utilizing the drops just as well (sometimes better) than the hikes. Japan is no different, and anybody’s crystal ball is as good as the next guy’s, really. I have no idea what tomorrow will bring (although I think Abe’s having the best go at improving things that Japan’s seen in decades) – but I position myself (and my clients) to benefit in the long term, and on any dips in the interim, as I’m hoping most people here do.

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
    http://www.nippontradings.com
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of EngeloRumoraEngeloRumora
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    I might be a tad premature but is this one of those ‘I told you so’ moments…

    Japanese Bond Futures Volume Collapses To Zero Even As Service Sector Implodes

    It seems Abe san has broken the JGB market… amazing. I believe Bass predicted something along those lines… there’s more to come I’m sure… perhaps that 3rd arrow everyone talks about might actually appear. I won’t hold my breath.

    Of course there are those who believe it’s all going splendidly…..

    So its Catinthehat now??? haha

    Love it lol

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    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    Yes, you might be a tad premature, or just wrong, as bass and his cronies have been for the past two decades (at least as far as doom and gloom prophecies go – economies go up and down of course, but the Armageddon they describe is somehow not happening, much to their chagrin) ;) sorry but can’t delve deeply into this now – on my way to Tokyo, to meet a group led by a QLD gov mp who are here to develop new business with Japan’s collapsing economy (now with growth rates higher than China’s).

    But promise to come back and play more shortly! I’d recommend going for “willy wonka” next time, since big brother (maybe paid off by a coalition of Obama, Abbott and Abe San???) seems to have something personal against you – or maybe it’s just that knocking everyone and everything out just for the sake of being argumentative doesn’t actually fly that well with most people, who prefer a more balanced and constructive approach to discussion (I know, I know, everyone’s so stupid except you, you just can’t help it, right?)

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    I think you’re confusing bragging with providing information which you don’t like to hear, and gravy train flogging with work expanding business ties (judging by the vast amount of Japanese and expat Australian business folk who have gathered here to speak to these guys today, I’m not the only one who thinks they’re doing excellent work) – but somehow I didn’t expect anything more cordial from you, thanks for never failing to provide entertainment value.

    As for the growth numbers – don’t have time to search for the original Bangkok Post item – here’s our re-publishing of it. China’s 1st quarter growth was 5.4 or 5.7%, from memory – Japan’s was almost 6% –

    JAPAN ECONOMY SEES FASTEST GROWTH RATE IN 3 YEARS

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    Yes, you’re exactly right, what I said was that this event will solve all of Japan’s problems. Oh, yes, and also I said that Japan’s growth this last quarter will last forever and also cures cancer. Thanks for the translations. Freckle, did you actually want to say something except “boo boo boo everything you say is boo and I don’t like it”? Getting a bit tired of this childish banter…

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    @zmagen
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    Aloha, fellow forumites, and apologies for absconding for so long – been crazy busy here (not just us, of course, everybody here – http://asianpropertyreview.com/the-sun-rises-again/), but thought I’d drop by and see how everyone’s doing, which of the old-timers were still here, if at all?

    Peace, love etc…

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of Richard TaylorRichard Taylor
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    Don’t like the tag old timer but still here after 14 1/2 years.

    Currently over in the UK buying property for our forum clients.

    Cheers

    Yours in Finance
    0-40 properties in a decade. Ask me how.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    Is foreign interest still expanding out of London, Richard, or has it shrunk back to mostly capital borders again?

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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    Ziv Nakajima-Magen - Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

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