Japan

Intelligence for Better Decision Making

Yen Slump Amid Bank of Japan's Steady Rate Strategy and Global Economic Uncertainties

Dec. 20, 2024 | Indirect Indicator

On December 18th, the New York foreign exchange market witnessed a significant depreciation of the yen, which fell to 154.87 yen per dollar, marking its lowest level in almost three weeks.

This decline was driven by a rise in US long-term interest rates, resulting in a 1.36 yen drop from the previous day's rate of 153.41-51 yen. The market had opened with the yen at 153.83 per dollar, reflecting a strong dollar against a weakening yen. Although the US Federal Reserve's Federal Open Market Committee implemented a 0.25% interest rate cut, expectations of fewer rate cuts in 2025 influenced market sentiment. Fed Chairman Powell's cautious outlook led to increased yen selling and greater demand for the dollar.

Ahead of the Bank of Japan's monetary policy meeting on December 19th, market participants were cautious, anticipating short-term interest rates to remain around 0.25%. Currency fluctuations continued with the euro trading at 1.0346-0356 dollars and 160.27-37 yen. On December 19th, the Tokyo market noted the exchange rate at approximately 154.82 yen per dollar, a 1.25 yen increase from the previous day's late rate. Persistent dollar buying in Tokyo and a recovery in the Nikkei index were balanced by caution over the Bank of Japan meeting, limiting potential appreciation of the yen.

On December 19th, the Bank of Japan undertook a comprehensive review of 25 years of non-traditional monetary policies. While the significant easing measures initiated in 2013 have negatively impacted financial markets and institutional profits, they have generally benefited the Japanese economy. The review cautioned about potential future issues, such as a slow recovery in the government bond market, emphasizing the need for careful evaluation of non-traditional approaches. The Bank concluded that maintaining its 2% price stability target remains appropriate.

During its two-day policy meeting, the Bank of Japan decided to hold its policy rate at 0.25%, in line with market expectations amid uncertainties tied to the incoming Trump administration in the US Analysts were divided on the prospect of a rate increase, reflecting concerns about Trump's protectionist policies and their potential impact on global markets. The BOJ is also closely monitoring Japan's wage growth as inflation and cost issues for smaller firms add complexity. Since taking office in April 2023, Governor Kazuo Ueda has been navigating the BOJ away from prolonged extraordinary easing measures.

Kioxia's Robust IPO Debut and Strategic Expansion in AI Chip Market

Dec. 20, 2024 | Indirect Indicator

Kioxia Holdings Corp made a significant entry into the Tokyo Stock Exchange Prime Market on December 18, 2024, marking the second-largest IPO in Japan that year.

The initial public offering resulted in a market capitalization estimated at 863 billion yen ($5.6 billion), with shares closing at 1,601 yen, a notable rise from their opening price of 1,440 yen. In raising approximately 29 billion yen through the issuance of 21.56 million new shares, the company plans to channel these funds into research and development to cater to the growing demand for AI chip technology. Despite a challenging landscape in the memory market, analysts remain cautiously optimistic about Kioxia's future prospects.

President Nobuo Hayasaka has championed Kioxia's strengths, emphasizing a strategic pivot towards expanding its product range specifically for data centers and AI applications. Acknowledging the tough business climate, he expressed satisfaction with the IPO's outcome and detailed plans for diversifying the company’s operations to reduce dependence on a singular business line. While earlier merger discussions with Western Digital Corp have concluded with no current negotiations, post-IPO actions saw major shareholders Bain Capital and Toshiba decreasing their stakes. Bain Capital reduced its share from 56% to 51%, while Toshiba's shareholding declined from 40% to 30%.

Kioxia, originally Toshiba's memory chip division, was spun off and sold to a Bain-led consortium in 2018 for approximately 2 trillion yen, a move prompted by Toshiba’s financial difficulties. Although an IPO was initially planned for 2020, geopolitical tensions and US sanctions against Huawei, a significant business partner, led to delays. However, signs of recovery in the memory market by 2022 enabled Kioxia to move forward with its IPO. As an innovator in flash memory technology, Kioxia maintains a prominent role in the NAND flash memory market, a vital component for devices such as personal computers and smartphones.

Despite the successful IPO, Kioxia's market valuation did not reach its target of 1.5 trillion yen. To ensure effective communication with early investors, the IPO was preceded by a strategic "pre-approval submission method" amid the memory market downturn. Although initial share pricing posed challenges, Kazuyoshi Saito of Iwai Cosmo Securities described the market debut as calm. Some analysts remain hopeful for a recovery within the NAND flash memory sector, driven by the demand for AI-related devices. Kioxia is poised to leverage improving market conditions, with aspirations for enhanced performance in the latter half of 2024.

Monitored Intelligence for Japan - Dec. 20, 2024

News
Media
487

Government
Releases
41

City/State
Releases
181

Embassy
Releases
1

Foreign
Service
Advisories
0

Academic/
Think
Tank
19

Podcasts
0

Videos
0

Social
Media
0

Business
Releases
1

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内閣府防災担当予算倍増新年度方針…「防災庁」設置へ体制整備

Cabinet Office Disaster Prevention Division to double budget for new fiscal year... System to establish "Disaster Prevention Agency"

Yomiuri Shimbun | Local Language | News | Dec. 20, 2024 | Natural Disasters

The Cabinet Office's Disaster Prevention Division plans to double its budget for the next fiscal year to improve disaster preparedness in Japan. This increase will fund the establishment of a dedicated Disaster Prevention Agency to enhance the country's response and resilience to disasters.

This initiative underscores the critical need for effective disaster management amid rising natural calamities. The agency aims to streamline response efforts by coordinating local and national resources, reinforcing Japan's commitment to robust disaster preparedness and risk management strategies.

福岡県の所管する特定優良賃貸住宅、高齢者向け優良賃貸住宅、地域優良賃貸住宅の物件一覧

A list of properties under the jurisdiction of Fukuoka Prefecture that are designated as special quality rental housing, quality rental housing for the elderly, and quality regional rental housing.

Fukuoka Prefecture | Local Language | CityState | Dec. 20, 2024 | UndeterminedReal Estate

A list of rental housing properties in Fukuoka Prefecture is categorized into three types: Tokuyuchin (specified high-quality rental housing), Koyuchin (high-quality rental housing for seniors), and Chiyuchin (regional high-quality rental housing).

For property inquiries, including availability and rental prices, individuals should contact the respective management company. For unlisted properties, inquiries can be directed to the relevant city office.

The release features two PDF files: one for Koyuchin and Chiyuchin properties for seniors and another for Tokuyuchin and Chiyuchin properties, excluding senior-specific listings. It outlines the eligibility requirements and general information for each rental housing type.

For further assistance, the Housing Planning Division Main Office can be reached by phone or fax. Feedback on the clarity and accessibility of the information is welcomed, with instructions provided for submitting comments. Adobe Reader is required to access the linked PDF files.

名古屋市の財政(令和6年版)

Nagoya City Finances (2024 Edition)

City of Nagoya | Local Language | CityState | Dec. 20, 2024 | UndeterminedBudgets-Budgeting

Nagoya City's financial overview for 2024 focuses on the ordinary account settlement, detailing current revenue and expenditure trends, expenditure scale, and municipal bond balances. It also includes a per capita comparison of these financial metrics with other designated cities.

The report provides soundness assessment and funding shortage ratios, highlighting the financial strength of Nagoya relative to its peers. A comparison of these ratios among designated cities offers insights into the overall fiscal health of Nagoya City.

Objectives for enhancing the tax and financial system are outlined, emphasizing the need to realign tax allocations between national and local governments, expand urban tax sources for large cities, and establish a special tax system to meet unique administrative needs.

Additionally, the release covers Nagoya City's specific characteristics, including financial traits, employment structure changes, population trends, and the status of public facilities. It presents trends in local financial plans, adjustments in financial indicators, and a detailed breakdown of city tax revenue. Historical financial data from 2015 to 2024 is also linked in PDF format, providing comprehensive insights into the city’s finances.

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