meti ministry of economy, trade and industry ministry of economy, trade and industry corporate...

METI Ministry of Economy, Trade and Industry

1. “Abenomics” and the major achievements


1

• Maximize power of private sector through investment promotion, business restructuring and deregulation.

• Make best use of human potential by creating a society where all can participate. • Create new frontiers through innovation and globalization.

1. Bold monetary policy

2. Flexible fiscal policy

3. Growth strategy (Japan Revitalization Strategy)

• ¥10tr fiscal stimulus package (FY2012 supplementary budget). • ¥5.5tr fiscal stimulus package (FY2013 supplementary budget). Address downside risks to the economy, w/o issuing additional government bonds.

• Price-stability target (2% inflation), within about two-year time frame. • Double monetary base and JGB holdings in two years. Double average duration of

purchased JGBs. → Create inflationary expectations. End deflationary mindset.

Revitalize the Japanese Economy ～The Three Arrows～ METI Ministry of Economy, Trade and Industry

2

▲ 3.7

▲ 2.0

3.5

0.4 1.0

2.1

▲ 0.9

1.7 1.7

▲ 4.6

▲ 3.2

1.4

▲ 1.3

0.1

1.8

1.6

2.8

2.3

▲ 6.0

▲ 4.0

▲ 2.0

0.0

2.0

4.0

Real growth rate Nominal growth rate

(%) Key contributors

• BOJ monetary easing

• Falling crude oil prices

• Anticipated real wage increases

• Improvements in employment and income conditions

Key indicators

• Q1 2015: GDP +3.9% at an annual rate

• Rising for 2 quarters

The Japanese economy is expected to exit deflation and is on track for steady recovery.

Sources: Cabinet Office (actual) and Japan Center for Economic Research (forecast)

GDP Growth Rate


Effects of Abenomics Emerging in the Real Economy Upward Trends Visible Across Principal Economic Indicators

GDP Growth Rate

3

Stock price nearly doubles in recent 2 years (since the start of Abe administration in Dec 2012) and hits the highest record in recent 15 years.

The number of IPO hits 77 in2014, growing for 5 consecutive years , 67% growth from 2012.

49

19 22

36

46

54

77

0

10

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 2013 2014


9,000

11,000

13,000

15,000

17,000

19,000

21,000

2012 2013 2014 2015

Trends of Stock Price (Nikkei 225) (JPY)

Stock Market


Number of IPOs

source：VEC yearbook 2015 source：Nikkei Online

46 (2012) → 77 (2014) (+67%)

2015.7.27 JPY 20,328.89 (+99%)

2012.12.26 JPY 10,236.36

4


Corporate Profits


0

3

6

9

12

15

18

21

1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3

11 12 13 14 15

Transition of Current Earnings （Seasonally-adjusted figure）

Source: Financial Statements Statistics of Corporations by Industry (Ministry of Finance)

All Industries

Manufacturing

Non-Manufacturing

（Trillion yen）

All Industries

Manufacturing Non-Manufacturing

2015.1-３ 16.4trillion yen ▲6.4％

(compared to previous quarter)

Corporate profits have been growing steadily.

5

Corporate recovery is driving wage increases.

The Spring Offensive resulted in a 2.23% average wage increase for FY2015. ※Source : Japanese Trade Union Confederation(2015.6/4 announced）


Employee Income


Gross income of employees (YoY)

-4

-3

-2

-1

0

1

2

3

4

1 4 7 10 1 4 7 10 1 4 7 10 1 4

2012 13 14 15

Real gross income of employees

excluding impact of consumption tax increase

Nominal gross income of employees

Source: ・ Job/employment placement services statistics (Ministry of Health, Labour and Welfare ) ・ Labour Force Survey (Ministry of Internal Affairs and Communications ) ・ Japanese Trade Union Confederation(2015.6/4announced）・ General incorporated Foundations: Institute of Labor administration “view of wage increase rate”（2015.１/29announced

1.71

2.23

1.64

2.07

2.18

1.5

1.6

1.7

1.8

1.9

2.0

2.1

2.2

2.3

06 07 08 09 10 11 12 13 14 15

Trends of wage increase rate in the Spring Offensive

6

0

1

2

3

4

5

6

Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

（Source）Ministry of Internal Affairs and Communications ”Labor Force Survey”, Japan Institute for Labor Policy and Training ”Useful Labor Statistics” ※Unemployment Rate : a ratio of unemployment people to labor force Equilibrium of Unemployment Rate : Vacant people are equal to unemployment people

2015.1-3 3.5％ 1997.7-9

3.4％

Equilibrium of Unemployment Rate

Unemployment Rate

2014.10-12 3.40％

（％）

Trends of Unemployment rate

Unemployment rate is as low as 3.5% in 2015.1-3, which has come down to the level of Equilibrium of Unemployment.



Employment

7


Foreign Direct Investment (FDI) Inward FDI is rapidly increasing more than 10 times between 2012 and 2014.


Source: Ministry of Finance “Japan's Balance of Payments” 8

7.3 8.3 8.4

6.8 8.6

6.2

8.4 10.4

13.4

9.1

0.02.04.06.08.0

10.012.014.016.018.020.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015(H1)

(Mil) Tourist Visited Japan


In 2014, Japan's travel balance turns positive 1st time in 55 years.

The number of tourists who visit Japan exceeds 13.4 million in 2014, as a result of the relaxation of visa application requirements to tourists.

Tourists visiting Japan


Source: Japan National Tourism Organization

2012-2014 +60%

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Enhance Corporate Earning Power

• Reinforce proactive corporate actions by promoting a constructive dialogue between companies and investors.

• Growth-oriented corporate tax reform

• Promote ventures by bridging international hubs and domestic entrepreneurs.

• National University Reform to facilitate innovation.

• Promote economic partnership negotiations such as TPP and Japan-EU EPA.

Accelerate Challenges to the New Era

• Facilitate the use of IoT, big data and AI

• Promote the utmost use of IT while ensuring cyber security.

• Enhance earning power of SMEs and micro enterprises.

• Improve productivity in the services industry.

Productivity Enhancement Everywhere - Local Abenomics -

Develop Individual Potential

• Increase labor participation of women, the elderly and talented foreigners.

• Transform working styles by correcting long-hours work.

• Promote career development driven by individuals.

• Autonomous car, hydrogen society, advanced robots and others.

Productivity Revolution by Investment for the Future

Leading Projects for 2020

Japan Revitalization Strategy 2015


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Japan-EU・EPA

TPP ( Trans-Pacific Partnership )

In Force ( 13 countries and 1 region )

Asia

Singapore Asia

Viet Nam

Malaysia India

Thailand Pacific Australia

Indonesia Latin

America

Mexico

Brunei Chile

ASEAN Peru

Philippines Europe Switzerland

Under Negotiation ( 3 countries and 5 regions )

Asia

C-J-K Europe EU

RCEP North

America Canada

ASEAN (Services and

Investment Chapters, Substantial Conclusion)

Latin America

Colombia

Asia/ Pacific

TPP Middle

East Turkey

In Force

Under Negotiation

Signed

China-Japan-Korea FTA

<Others> Republic of Korea: Negotiations Suspended GCC (Gulf Cooperation Council: UAE, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia): Negotiations Postponed

RCEP ( Regional Comprehensive

Economic Partnership ) ( ASEAN, Japan, China, Korea,

India, NZ and Aus. )

Signed ( 1 country )

Asia Mongolia

Japan’s EPA/FTA Networks

2. Growth strategy and Israel

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Reinforce measures to support creating global ventures.

Initiatives for innovation and venture creation

• National University Reform

Making the best use of globally competitive national universities resulting

from the National University Reform as a global platform for creating

ventures.


• Venture Challenge 2020

A project to show the capacity of creating innovation by 2020.

Holding a Global Venture Summit in conjunction with Tokyo Olympic and

Paralympic.

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Reinforce the measures against cyber threats to protect the population and society ・Enhance abilities to respond to cyber threats (government and public institutions etc.)/ Protect “My number system” ・Encourage the actions of companies, creation of new industries, human resources capable of responding to cyber

threats.

Diffusion of ICT to the whole society ・Promotion of education on programming in primary/secondary/higher education ・Vitalization of competition in mobile phone sector,

extension of the frequency band for IoT or drones

New legal framework to be prepared

・Creation of an institution in charge of safe and

security-ensured distribution of personal information ・Shift from the principle of documents /face-to-face

interaction to that of ICT utilization ・Promotion of sharing economy, drones, autonomous

cars etc.

Utilization of “My Number System” ・Enlarge the application scope - Census registration, residence report, transaction

of stocks, in addition to deposit/saving accounts, and medical examination (after 2019).

・Promote utilization of “My Number Card”

- Able to receive certificates such as resident cards, seal impressions, or family registers, at convenience stores from FY2016. - Integrate with health insurance card, credit card

・Introduction of online monitoring system

- Provide one-stop service of procedures such as change of residential information, notice of death etc. through electronic post office box system, after Jan. 2017.

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Promotion of ICT utilization in medical and nursing sectors

・Introduction of different number system in medical and

nursing sector (to avoid information leakage, but linkage with My number system) and promote information exchanges in the sector

・Examine methods to evaluate effects of information

exchanges at the next revision of medical treatment fees (effect of reducing medical expenses to be expected)

Realization of the most advanced ICT based society METI Ministry of Economy, Trade and Industry

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Major global IT and manufacturing companies place R&D centers in Israel.

Israel as a global R&D Center METI Ministry of Economy, Trade and Industry

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INCJ (Innovation Network Corporation of Japan ) venture investment steadily increases.

Under the Industrial Competitive Advantage Law, government qualifies the venture funds that have certain hands-on support abilities for venture businesses.

Private companies can get tax deductions by investing in the qualified funds.

Enables INCJ to accelerate venture investment with quick decision making.

INCJ early stage investment trend (cumulative)

Venture Support Program in Japan METI Ministry of Economy, Trade and Industry

0

5

10

15

20

25

30

35

0

100

200

300

400

500

600

FY2010 FY2011 FY2012 FY2013 FY2014

Amount (left)

Deals (right)

Amount (¥100M) Deals

Qualified Venture Funds

Venture Businesses

Companies

Tax Deduction

INCJ

Enhance Venture Investment

Qualification

16 16

Venture investment exceeds JPY 100B in 2014. Lack of entrepreneurship mind and skills (while Israel is extensively high).

0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012 2013 2014

VC investment trend in Japan (¥100M)

Source： Japan Venture Research

VC Investments and Entrepreneurship METI Ministry of Economy, Trade and Industry

Entrepreneurship mind of Japan

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