To: Lecture Note Index

Link To: Homepages on most recent Jpns firms and economy

1. Daily news on Jpns business and economy
   1. Nikkei Net
   2. Asahi News Paper
2. It is worth while carefully investigating the corporate homepages, in which most recent management of the Jpns firms (including the financial data as well) is described and summarized:
   1. Jpns firms (Jpns version is here)
   2. Mfg: Automobile [eleven automakers in Jpn]
      1. Toyota
      2. Nissan
      3. Honda
      4. Mitubishi
      5. References
         • Maruyama, et al., Toyota and Nissan, (1991, Ohtuki Shyoten).
         • Oguri, et al., Honda and Mitubishi, (1997, Ohtuki Shyoten). 　
      6. Others: Fuji Heavy Industries, Mazda, Nissan Diesel, Hino, Daihatu, Suzuki, and Isuzu.
   3. Mfg: Electrical Appliances
      1. Toshiba
      2. Hitachi
   4. Mfg: Precisions
      1. Canon
   5. Non-mfg: General trading ("Sogo Shyosya" in Jpns)
      1. Mitui Bussan
      2. Marubeni
3. Jpns economy, business Jpns, etc.
   1. JETRO
   2. Useful links to Jpns govmt ministries
4. Most recent relations between Jpn and the U.S.
   1. Fukuoka American Center
      • RealPlayer files
   2. <<8/31/98>> Some Background Q&A on Japanese Economic Stagnation

To: Lecture Note Index

Lecture Note A: Hot News on Events Most Likely Affecting Jpns Business

1. Why and how do "exchange rate" and "stock prices" affect Jpns firms operating globally?
   Note that, recently, as much as 30% of Sony's consolidataed sales and about 10% of Hitachi 's and Mitubishi's sales is generated in the U.S.

   Jpns corporate global (consolidataed) profit in yen = domestic (parent's) profit in yen + "yen per foreign currency" exchange rate*foreign (subsidiary's) profit in foreign currency

   See "global profit" for the analytics of corporate global profit as influenced by exchange rate and the forward covering.

   1. "yen per foreign currency" exchange rate: The cheaper the yen, the greater the Jpns corporate global (consolidataed) profit.
   2. domestic (parent's) profit in yen: The lower the domestic stock price, the smaller the domestic (parent's) profit in yen might be.
      • In Jpn [For Jpns "shareholders," see Diagrams and Tables on Features of Jpns Firms (including International Comparison)]:
        a decline in the Jpns stock prices
        =>(i) the banks' smaller "Fukumi (latent) profit" from holding stocks, and (ii) credit crunch
        =>less new investment by mfg firms
        
   3. foreign (subsidiary's) profit in foreign currency: The lower the foreign stock price, the smaller the foreign (subsidiary's) profit in foreign currency might be.
      • In USA [For US "shareholders," see Diagrams and Tables on Features of Jpns Firms (including International Comparison)]:
        a decline in the US stock prices
        =>less consumption
        =>further recession
2. <<8/31/98>> The recent Russian economic/financial crisis--significant depreciation of the currency Louvre on 8/17/98, etc. -- worries Jpns (multinational) firms, like Sony, which produce and sell their products globally.
   1. Note that, recently, as much as 30% of Sony's consolidataed sales and about 10% of Hitachi 's and Mitubishi's sales is generated in the U.S.
   2. Chain of economic: Asia crisis (that started in July, 1997) -> Russia -> Latin America -> Indurstrial nations.
   3. Because: The Russian economic/financial crisis caused the sharp fall in the European (German, in particular), Latin American, NYSE on 8/27-31/98, NYSE and GDP for 1995 on, Asian, and Jpns stock prices on 8/28/98.
   4. The recent sharp fall in the NYSE price worries even excellent firms like Toyota, Honda and Sony, all of which succeed in generating a significant amount of profit in the U.S. consumer market.
      1. The U.S. consumer market could shrink in size due to this sharp stock price decrease.
      2. The high level of U. S. sales recently makes up for the poor Jpns sales, thus contributing to the high enough consolidated profit. The importance of the U.S. market in these firms' consolidated financial statements is increasing.
         See also Lecture Note on "Consolidated financial data."
   5. Note that the Russian economic/financial crisis was essentially caused by
      1. the vulnerability of the Russian banks borrowing a huge amount from American and Eruopean banks.
      2. the Asian ecocomic crisis that started back in 1997.
         [For "Unstable Asian currencies": Table : Highlights of yen_dollar exchange rate and Jpn economy; Credit expansion and crunch (1970q1 - present);
         for "Falling Stock Prices in Asia": Plots: Recent Asian Stock Price Behavior: May, 1997 - August, 1998.]
3. <<9/2, 3/98>> Malaysian and Russian governments changed their exchange rate regime as follows:
   
   1. <<9/2/98>> Malaysia: from "system of exchange rate pegged to U.S. dollar" to "fixed rate system," aiming to prevent the speculative investors from further selling the Malaysian currency. [See Plots: Recent Asian Stock Price and Exchange Rate Behavior: May, 1997 - August, 1998.]
   2. <<9/3/98>> Russia: from "fixed" to "flexible rate system." The Russian government repeated depreciating the currency in an attempt to keep the fixed rate system, but eventually failed to do so.
   3. The adverse impact of the unstable international monetary system on Jpns firms operating abroad (in Asia in particular) is obvious.
4. <<9/3/98>> Jpns yen tends to appreciate as NY stock market prices fall:
   See:
   1. Plots : Most recent yen_dollar exchange rate (Jan. - - ?/1998) and
   2. Plots : Most recent stock prices for Jpns and US markets(1995 - - ?/1998).
5. <<9/21/98>> Jpns stock prices fell on 9/21 down to the lowest level since the peak reached in 1989; the stock price on 9/17/98 has become the second lowest (since 1989):
   See:
   1. Plots : Most recent stock prices for Jpns and US markets(1995 - - ?/1998).
   2. The reason for such a drop could be the poor corporate performance this fiscal year and the further stagnation anticipated of the Jpns economy.
   3. This fall in the Jpns stock price led to the fall in the American, European and Asian stock prices: Worldwide stock market crash!!
6. <<10/5/98>> Jpns stock prices fell on 10/5 down to the lowest level since the peak reached in 1989: they turned out the same as those on 1/30/86 (before the bubble started)!!!
7. <<- ?/1998>> Jpns yen/dollar exchange rate for the past two weeks has tended toward being more expensive, though showing large volatility. See:
   1. Plots: Most recent yen_dollar exchange rate (Jan. - - ?/1998) .