Trying to get them to work better – An EV covered in solar cells at Automotive World 2024, Tokyo

• By the end of 2023, it took twice as long to sell an electric passenger car in the US as it did in January. Things are worse in 2024 as EV sales targets and production are cut. 
• Electric dreams are turning into nightmares. Start-ups are going bust and funding being scaled back, IPOs are being cancelled, and EV production cuts are being reported by the press.
• The relative winners may be the Japanese car makers that never took to EVs, and light runabout makers from China. Losers will be heavy US and European EV manufacturers and major battery makers.

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• Fujitsu Japan and TOTO have announced some smart new public toilet technology to launch the New Year, but no mention of the big PR challenge the company faces in 2024.
• Accusations continue of a UK Post Office cover-up of Fujitsu’s software bugs which, it turns out, were when Fujitsu Japan’s current CEO and President was at Fujitsu UK.
• Fujitsu, meanwhile, has wisely backed away from bidding on UK Govt. contracts, longer-term its reputation, and that of other UK-based Japanese companies could be at greater risk.

In this article JAPANMACRO considers the Public Relations task ahead amid renewed accusations of a UK Post Office - Fujitsu cover-up. 

Takahito Tokita, Fujitsu's current CEO and President, was working at Fujitsu UK at the time, according to GOV.UK having followed Hidenori Furuta, its current COO and VP after his assignment which started in 2014.
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Kyoto

• A total 19.8 million inbound tourists arrived in the first 10 months 2023. With the run rate in October topping that of 2019.
• Post COVID inbound tourist mix has changed; significantly fewer high volume shopping tours, significantly more experience seeking westerners.
• This year there are five key headwinds for tourism revenues, and a risk to domestic consumption and seasonal spending.

In this note JAPANMACRO looks at the inbound tourist boom and the prospects for 2024 with domestic tourism and seasonal consumption - and it does not look good.

Something to consider now as Japanese equities are in demand and the liquidity is good.

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Source ITV

• Buggy software is the nature of new code, that why there are bug-fixes and upgrades. But rarely does it claim the lives of users.
• Fujitsu acquired UK’s International Computers Limited (ICL) in 1998 and with it a horribly flawed Post Office accounting system.
• As Fujitsu is the software developer, even though through an acquisition 25 years ago, this problem will come to Japan’s front door.

In this note JAPANMACRO.com takes a look at the potential issues facing Fujitsu in Japan as the British press and TV is dominated by the Post Office Horizon scandal which, it seems, few in Japan know anything about.

To read this article, please click HERE

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Tourism – too much of a good thing (Kyoto).

A look ahead to what may impact investors in Japan in the coming year.

• Stronger yen and higher interest rates, leads to corporate profit expansion, supports pay rises and domestic consumption.
• A crisis in domestic and inbound tourism develops with multiple issues facing Japan, trouble is brewing from Tokyo to Kyoto.
• Stocks continue to rally and foreigners remain attracted to Japanese assets. Property market does not collapse as rates rise, investment in JGBs return.

This is quite a long article with ten thematics to consider, the top three I feel are the most important for the start of the year; Bank of Japan and Ministry of Finance, Tourism and consumption, and Foreign investor activity, the rest may impact a little later in the year.

​Topics include:

• Stronger yen and higher interest rates
• A tourism crisis, inbound and domestic
• Corporate profit expansion, 17-20% rally in equities
• Consumption; negatives and positives
• Defence and Japan’s alliances in Europe and with its Asian neighbours.

…and some other thoughts for food, water, climate, technology, and space. 

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Tsukiji outer market in the run up to Christmas.

Some observations and thoughts on the Japanese market for December 2023 and the first few days of January 2024 as we return to work.

To read this article, please click HERE

What drove the 30% run up in Japanese equities last year and why is important for 2024.

• TSE reforms, China, record profits, taxes, buy-backs and Warren Buffet all played a key part in the Japanese equity market rally that kicked off in Q2
• Entering a period of rediscovery, Japan became the top investment destination in Asia for 2023 but, a lack of ready expertise has led to over-concentrated buying.
• Investors who acted quickly by buying Topix Core 30 names are well positioned for the start of 2024 as others will likely follow.

In this article, the first for 2024, I take a look at the five main drivers of the Japanese equity market in 2023 and consider their relevance for 2024.

Next week, I will look into detail the themes that are likely to dominate this year in Japan.

To read this article, please click HERE

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A short video on the International Robot Expo in Tokyo. It is an annual event showcasing the latest in industrial robots, including some impressive stands from Fanuc, SMC, Harmonic Drive and Kawada. I came face to face with a real and fake android, a fluffy robot and face to pen with KHI's duAro, a dual-arm Selective Compliance Articulated Robot Arm (SCARA). which drew my picture.

To play the video, click HERE

Japan hosts numerous trade shows annually, I generally attend those which cover themes I consider important. I apologise in advance, I am no Lee Smith, but I hope my rudimentary editing skills with iPhone videos will give you a fair idea of what I see.

Next up are five concurrent shows in the last week of January, including Automotive World, which is primarily electronics technology in cars, autonomous driving and AR/VR wearable Expo which sometimes has a few surprises. If you are in Tokyo and would like to join me, please send me a message on my contact form on JAPANMACRO.com.

Best,
Neil