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 AOYAMA VIEW

  New Emperor, Two Buddies, State Visit and Sumo

So it's Reiwa 1 now and the longest ever Golden Week is over. The nation was back at work last week to face pile of tasks waiting after being 10 days away. As afraid, Tokyo stocks opened in steep decline pummeled by failed US-China talks, Trump's tweets and tariffs, while Japan was on holiday. The spring seem to be turning into summer as temperature is rising in Tokyo, but cold winds are blowing from outside Japan and black clouds keep getting darker for international business.

Media comments around the world about the change on the throne were pretty much same: undivided admiration for what the Emperor Emeritus did during his 30 year rule and wishes that his son would continue in same way, bring the Imperial House even closer to the people and further modernize and internationalize the 2000 year old institution. Aoyama View thinks he can do all that and yet hopefully maintain the tradition and respect that the Chrysantemum throne enjoys.

The seremonies themselves were solemn and highly formal, yet simple and short. No pomp and bling, shiny crowns, golden carriages and colorful parades here. Just coat tails and short announcement from both the abdicating Majesty and the ascending one. Even the ancient sword and mirror, symbols of the throne, were kept in nicely wrapped gift boxes like they just came from Mitsukoshi department store. Yet, there never was doubt of the big impact of the Imperial change for the nation. On his fourth day, the new Emperor appeared on palace balcony for the public and 140,000 people were there to cheer him.

In contrast to the stiff ceremonies, the celebrations among the people for the new era were wild and rowdy, like a true New Year or even more. The pubs around the country were filled with revellers and in Shibuya Crossing huge crowds counted the moments to Reiwa start at midnight. Tokyo had Heisei period disco dances with glitter balls and skintight dresses, while countryside held traditional Bon Odori-style folk dances in kimono. Every one could openly rejoice this time as there was no incumbent death to tone you down from showing your feeling.

30 years ago, when Showa emperor died, it was quite different: the whole country went into funeral mood. All bright neons were turned off, theaters closed, concerts cancelled, TV-programs changed. It was rude to be funny and laugh openly, even talk loud. Bright colored clothes were bad taste and, unusal in Japan, their wearers were openly told that. The mourning period lasted six months, if my memory still serves me. Can't recall any celebrations for the new Emperor at all.

Either way, both tell us how cherished the Imperial system still is to the nation. Fresh survey shows over 80% support it wholeheartedly. Many companies changed their name or their product's name into Reiwa-something in hopes it would help their business. In China, over 4000 applications were made for copyright on Reiwa-kanji in hope of making money out of it, too.



GOLDEN WEEK HOLIDAY: NOT FOR ALL

With the uninterrupted 10 day Golden Week, the annual rush with crowded trains and congested highways was even worse than normally. Extra spending for the Reiwa GW was estimated to have brought in JPY 380 billion (USD 3,4 billion) business boost.

Traditionally, Golden Week is one of the three times in year that whole Japan takes holiday and travels, the story goes.

Not true anymore despite the sold-out trains and hotels. Media still loves to tell us the old story of all companies closing for holidays - same as the story that big unions negotiate with big companies the wages for the whole country - but in reality major part of the Japanese people don't work today in big companies and old industries with permanent job, but for small companies and service industries, often with temporary work contract. Many of those companies - like retail, travel, hotels and restaurants or mail and parcel delivery - don't close for the Golden Week any more than for weekends. In fact, for many of them, GW is an extra busy business time and all hands are needed on deck.

With temporary work and hourly wages like almost 40% of Japanese have today, you don't easily take time off. Yet, the newly born confidence about jobs showed out this time: many "arbeiters" took holiday as well and forced companies to ask managers and staff from head office refrain from theirs to help serving in shops, restaurants and hotel receptions. Quite a change of order!



ABE & TRUMP: TWO BUDDIES

Our globe trotting Prime Minister was working, too, and managed to visit 6 countries in 6 days to meet their leaders in preparation for the June G20 meeting. His last stop was Washington and President Trump. The two chums got along again amicably, played golf and celebrated Mrs. Trump's birthday, even managed some business talk in the limited

time they were together. As for the US-Japan trade talks that just started, it seems Abe-san waxed so lyrical about Japanese corporate investment in USA - USD 43 billion last year and USD 27 billion already committed this year making Japan No.1 foreign investor there - that the Tariff Man was impressed and reconfirmed he won't raise tariffs for Japanese car imports. At least for now.

For agricultural products, a crucial point for US farm vote, it was agreed Japan will grant the same lower tariffs for US products as the TPP members and EU countries recently got and USA missed for pulling out of the deal. Surprisingly, Trump even agreed to wait for the announcement of the agreement until July when Abe-san has cleared the G20 meeting and Parliament election here out of the way. This is important for the PM: LDP lives on farmers' vote so it's not a good idea to give away more concessions now to make voters angry just before the election. They still smart of new tariffs given to EU and TPP countries.

Another bait that Abe was dangling to Trump is the official state visit this month. It will make the US president the first foreign leader to meet the new Emperor, to have state dinner in palace and maybe even the horse carriage that he missed in London. Abe's

assurance that "Emperor is hundred times bigger than Super Bowl" really went home. Moreover, Trump will attend the final day of May sumo tournament that just started and hand over the "huuuge" trophy to the winner in the dohyo. He loves pro-wrestling, they say, and probably thinks sumo is about same. He has even insisted to sit in the ringside row instead of Imperial box on the balcony, a big worry for his security men. It will be interesting to see how he manage crosslegged without shoes in the "masu", then step up to the ring in slippers.

Yet behind all the comedy, the growing inflow of Aussie beef, Danish pork and Aussie grain to Japan at new lower tariffs instead of US products since beginning this year must be smarting Trump bad, especially when it's all thanks to his own wrongheaded decision. Moreover, it comes at a time when much bigger exports of US products to China are missing out. We'll see if Trump will stick to his promises to Abe now that he failed to get Beijing sign on his wide spread of demands.

With pressures piling up at home and bad news from Korea, too, The Big Man needs quickly some PR wins. Saber rattling against Iran and Venezuela is small fry, something bigger and more concrete is needed. If not Japan, it must be Europe that will be attacked instead. Get ready, Wolfsburg!



TAX INCREASE OFF?

As for the VAT increase scheduled for autumn, a top bureacrat slipped out that it might be postponed again despite all government assurances it will definitely go ahead this time. He blamed worsening economic outlook for his reserve, yet it is clearly also related to the election: tax hikes are never popular with the voters and with opposition parties strongly opposed to this one to gain votes, it would be good tactics from ruling parties to play them out by joining the bandwagon.

What about the fiscal balance target? It has been postponed already before, so it can wait a few more years - maintaining parliamentarian majority is much more important - and, anyway, Prime Minister has already declared that this tax hike will be used to pay for the free pre-school and child care that just took effect, not to reduce public debt.

Making tax issue the main topic of the election could even attract more people to voting places than what we had in the nationwide community elections last month. If all looks good, the Upper House election could be spread to cover Lower House as well.



DISAPPEARING VOTERS, DISAPPEARING POLITICIANS

The 48% voting rate in the community election was indeed deplorable in comparison to countries were political participation is active like Finland and European countries in general. Yet, it is much more scary that hundreds of seats in assemblies in villages, towns, cities and even prefectures went unopposed to candidates, who just showed up, as there was no other candidate at all. Even in Tokyo's neighbor Chiba, a big central prefecture in comparison to some backwoods, there were only 130 candidates competing for 96 prefectural seats. It is not only that Japanese people are not interested to vote - they are not interested to participate in politics in general. For many, it is embarassing to stand out in public.

Some say it's also because you have to spend so much time and money in campaigning. But there is money in reward, too. A Chiba Prefecture Assembly member earns JPY 10,5 million annual salary - more than many business managers do - plus generous coverage for campaigning costs. Even in Chiba City Assembly, an elected member pulls JPY 730, 000 per month, much more than JPY 450,000 an average civil servant earns in same city. So being an elected politician is not a bad job considering that city assemblies across Japan are in session just 85 days a year in average.

In fact, it seems political career attracts special types of characters, not only good. The career progress outlook looks good: you don't have to be a rocket scientist, just talk nice to voters and to your party superiors. If you manage to get elected into Parliament and re-elected a few times, you might be even rewarded to take your turn as a minister. We have seen recently what kind of characters can reach that high.



NEWS FROM FINLAND

In Finland, a new coalition government is shaping up following April election based on winner Labor allied with Center, the leader of the old government and biggest loser in the election. Such combination must sound strange to anybody following politics outside of Finland. The two are augmented by Labor's old friends Left (former Communists) as well as Green Party, who scored well. When adding liberal Swedish Party this colorful coalition commands majority of 117 seats in the 200 seat Parliament. Details for policies remain to be hammered out at the writing moment, but would not be surprised if all will be clear this week or next.

Another special feature of Finnish politics is that the populist True Finns, whose popularity rose in the election even more than Labor's, was totally played out in the party talks and put in opposition together with the Conservatives. It will be bigger there than Conservatives, who took some drabbing. A fresh survey indicate that True Finns could be now even bigger than Labor in terms of popular support. The biggest party left out of government - quite a puzzle to ponder for outsiders!

Apart from politics, the news is that there will be lots of events celebrating Finland-Japan 100 year diplomatic relation also in Finland, not only here in Tokyo. On the serious side, there will be seminars and receptions, on the fun side a Helsinki "matsuri" where locals dressed in happi coats carry a big "mikoshi" through the town. This colorful event that will surely attract plenty attention was instigated by Kansai Finland Friendship Association, who also sent the mikoshi from here. The sporty carriers are all locally organized, of course.

If you're in Helsinki this Saturday, come and watch. I'm lucky to be there.



Timo Varhama  
Tokyo, May 13, 2019  


Previous Columns

22 April 2019
"New era, new year and new money"

29 March 2019
"Japan's Best Kept Secret and Legacy of Heisei Time"

11 March 2019
"New Moomin Valley and Chic Starbucks Riverside - Architecture, Art and Economic Views"

28 February 2019
"Finland's onmarch continue, Japanese companies awash in cash but Prime Minister's headaches grow"

19 February 2019
"Europe attracts, Brexit bites - consumers rule Japan"

6 February 2019
"Celebrity Cheers Boost Sales, Olympic Fever Gets a "Dent" and Government Data Doubted"

28 January 2019
"Virus and snow in Japan - heavy turbulence outside"

16 January 2019
"New Year News Review"

19 December 2018
"Japan: The Only Safe Place From Global Turmoil?"

6 December 2018
"Political Theater at World Stage, Media Play in Nissan Case"

21 November 2018
"Different inroads into Japan: Finnish forest knowhow vs French corporate genius"

7 November 2018
"Moomin, Muji, Movies and Mobile Phone Fees"

29 October 2018
"Towards better world? Circular economy, collaboration with China"

15 October 2018
"Circular economy, fish market and construction boom"

2 October 2018
"Abe's "third reich": challenges abound"

17 September 2018
"From Osaka typhoon to Osaka fever - dark side and bright side of Japan"

6 September 2018
"Emperor: love, peace and reverence"

23 August 2018
"Summer heat, new scandals and export worries - but Tokyo is best"

8 August 2018
"Petty politicians, bungling bureaucrats and profitable business"

30 July 2018
"While we were on holiday"

17 June 2018
"From Singapore to soccer - wrapp up for summer"

11 June 2018
"Showdown in Singapore, commotion in Canada and cover-ups in Tokyo"

28 May 2018
"Morals and responsibility, blind loyalty and power harassment"

17 May 2018
"Big Business in record results again, but consumer are not convinced - North Korea spectacle continues under Kim direction"

26 April 2018
"Political spectacle approaches grand finale
- people's trust sinking ever lower"


17 April 2018
"Cruise missiles and cronyism, business boom, old people and sumo"

6 April 2018
"Mystery train and other unpredictable moves in geopolitics around Japan"

26 March 2018
"Trump Unchained and Abelympics – Can PM Make the Party?"

16 March 2018
"Anniversaries, updates, fallacies and deception"

5 March 2018
"WHILE WE WERE WATCHING OLYMPICS..."

26 February 2018
"Korean Olympics: sports shine, politics stink"

14 February 2018
"Korea: Murky Politics and Big Business Behind the Sport Spectacle"

4 February 2018
"It's "smile time" in politics, Olympics, economics and business"

23 January 2018
"Moomin crisis, panda frenzy and Olympics turned into political farce"

12 January 2018
"Heisei 30 looks good: share prices soar, PM rides high "



About the Columnist

The columnist is a Japan veteran among Finnish business, our Chamber ex-president and today Member of the Board of Trustees.
After running a major Finnish industry company's Japan business for over 20 years, he is now Senior Associate in a strategic consulting company.

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