Archive for the ‘Japan’ Category
November 14, 2011
I have faith in Japanese resilience and will still stick my neck out and stay with my forecast that the Japanese economy will become a global “driver” through 2012 and 2013.
Japanese Gross Domestic Product grew by 1.5 % over the 3rd quarter (July – September) representing an annualized growth rate of 6 percent. This is the fastest rate of growth for 18 months. The Cabinet Office said today in Tokyo that at 543 trillion yen ($7 trillion), the economic output was back to levels last seen before the March 11th Great Tohoku quake and tsunami.
The growth seems to have been led by exports rather than the domestic impetus measures to recover from the earthquake or the subsequent spending on rebuilding infrastructure. These probably need 2 more quarters to kick-in but that means that this growth is still vulnerable to current global weaknesses.
However the optimistic “glass half full” view would be that Japanese exports have grown mainly to Asia and the earthquake rebound has yet to come. Moreover this has happened in spite of a very high Yen. Any recovery in Europe and N. America would be a further boost to an economy which is large enough to then act as a global motor.
NY Times:
The rebound underscores the speed at which Japanese industry has been able to get back on its feet after the March 11 earthquake and tsunami, rebuilding factories and re-establishing supply chains severed by the destruction.
Exports jumped 6.2 percent as manufacturers got production back on track. Private consumption, which accounts for almost two-thirds of Japan’s economy, grew 1 percent, helped by a rebound in consumer sentiment and replacement demand in the tsunami zone.
Still, policy makers and economists also worry that the punishingly strong yen of recent months as well as weak growth in major trading partners, like the United States and China, will take a toll on Japanese exports. The crisis at the Fukushima Daiichi nuclear plant, meanwhile, has thrown the country’s energy policy into disarray and cast a pall over Japan’s recovery.
Related: Could the disaster in Japan power a wave of sustainable growth?
Tags:Economy of Japan, GDP growth, Great Tohoku quake and tsunami, Gross domestic product, Japan
Posted in Economy, Japan, Natural Disasters | Comments Off on Japan back to growth with a bang with GDP up 1.5% in 3 months
July 24, 2011
I was recently invited to write a contribution for a Japan Colloquium for the Indian Institute of Management – Ahmedabad.
My contribution entitled ” Sound judgements must not be stifled by Crisis Management Protocols” appears in Japan’s Tragedy and Aftermath: Lessons for Crises Management, Vikalpa, Volume 36, No.2, April – June 2011, pages 81 – 118.
Sound Judgments Must Not be Stifled by Crisis Management Protocols – Vikalpa June 2011
The story is told that at the Fukushima Dai-Ichi nuclear plant, the three reactors in operation began an orderly shutdown when the Great Tohoku quake of 2011 struck, even though the magnitude at 9.0 was significantly higher than the 8.3, the plant was designed for. But when the tsunami wave rolled in and all the 13 back-up diesel generators and all the emergency cooling pumps were knocked out, then an unprecedented and unforeseen chain of events was set in motion. It is said that the site management quickly came to the conclusion that sea water cooling was necessary even though this would render the reactors permanently inoperable. But it took a further eight hours for the Tokyo Electric Power Company (TEPCO) management in Tokyo to agree. In the event the meltdown of the fuel rods may have been unavoidable in any case but an additional eight hours of cooling with sea water could not have hurt. A similar story is told about Hurricane Katrina where an operating engineer had the possibility of opening some valves and preventing flooding of some areas of New Orleans but did not do so because such a decision was explicitly excluded from his authority and his superiors were unreachable.
The question that arises is whether the culture of an organization helps or hinders individual managers to make judgments at times of crisis or impending disaster? Should the site manager at Fukushima or the operating engineer in New Orleans have had to wait for higher authority as they did or should the organizational culture have permitted him to bypass the chain of command? ……
The “goodness” of a judgment can only be assessed long after the judgment itself and therefore it is the soundness of judgment which must be sought rather than the intangible goodness of a future result. But a sound judgment must also be consummated by the willingness to exercise it.
Tags:crisis management, Fukushima crisis, Indian Institute of Management Ahmedabad, Japan, sound judgement, Tokyo Electric Power Company, Vikalpa
Posted in Behaviour, India, Japan, Management | Comments Off on Japan Colloquium: Lessons for crises management
July 4, 2011
Tepco shares rose almost 20% today as reports on Sunday described government plans to break-up the Japanese utility and to nationalise its nuclear plant assets.
Market Watch:
Senior members of Japan’s government have been involved in secret plans to break up the operator of the beleaguered Fukushima Daiichi nuclear power plant, according to reports.
The plan would see the nuclear operations of Tokyo Electric Power Co. JP:9501 +19.82% come under government control, said Reuters, citing a report Sunday in a local paper.
The plan has been devised by Deputy Chief Cabinet Secretary Yoshito Sengoku, said Reuters, citing the Mainichi daily. The newspaper said its information was from unnamed sources.
As well as nationalizing the nuclear business, the plan would see Tepco sell its power distribution business, said Reuters. Power-generation operations that use thermal and hydraulic power plants would remain as the company’s business.
The plan would shred Tepco’s size, according to the reports, leaving it with 1.6 trillion yen ($19.8 billion) in power industry assets compared to its current 7 trillion yen.
The reports state that Sengoku has met several times with Tepco Chairman Tsunehisa Katsumata, and has informed Katsumata about the plans.
Also Sunday, The Wall Street Journal said the company has restarted the use of contaminated water to cool the reactor cores at Fukushima, one week after an initial attempt was suspended because of leaks. Tepco is hoping to achieve a cold shutdown, lowering the fuel rods’ temperature to below 100 degrees Celsius, by January.
Related:
https://ktwop.wordpress.com/2011/03/29/tepco-leadership-in-disarray-as-share-price-drops-to-47-year-low-and-government-considers-nationalisation/
https://ktwop.wordpress.com/2011/03/30/tepco-stocks-are-on-their-way-to-losing-all-value/
Tags:Japan, Tokyo Electric Power Company
Posted in Business, Energy, Japan, Natural Disasters | Comments Off on Tepco shares rise sharply on reports of planned break-up and nationalisation
July 4, 2011
Having a very strong belief in the resilience of Japan and the Japanese in the face of natural disasters, I have – paradoxically – been anticipating that the Great 2011 earthquake and tsunami will actually lead to a wave of infrastructure spending which can actually lead to a new spurt of economic growth. If political changes are also forthcoming this could be a wave of sustainable growth.
Now 3 months after the quake and tsunami the first signs are visible that the recovery is beginning. There is a long way yet to go but I remain convinced that over the next 2 or 3 years we will see Japan re-emerging as a significant motor driving the world economy.
Bloomberg:
Japan’s industrial production rose at the fastest pace in more than 50 years, led by carmakers as they restored operations at plants after a record earthquake and tsunami on March 11.
Factory output increased 5.7 percent in May from April, the biggest gain since 1953, the Trade Ministry said in Tokyo today. The median estimate of 30 economists surveyed by Bloomberg News was for a 5.5 percent gain.
Output in the transportation industry advanced 36 percent from the previous month as automakers including Toyota Motor Corp. and Nissan Motor Co. restarted production lines. Manufacturers said they plan to increase output 5.3 percent this month and 0.5 percent in July, according to a survey of companies included in today’s report.
“The report shows that the auto industry is a strong driving force” in boosting production, said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “The post-quake shock is running its course and production is undergoing a V-shaped recovery.”
The output report follows data this week showing that retail sales rose 2.4 percent in May from April, in a sign that consumer demand is rebounding.
Business World:
THE AUTOMOBILE INDUSTRY foresees a more stable supply situation at the very least following reports that Japanese parts production has picked up following March’s deadly earthquake and tsunami. Timing of a return to full output, however, remains uncertain given power shortages caused by the shutdown of the Fukushima nuclear plant, industry officials said.
Japan’s Ministry of Economy, Trade and Industry last week said industrial production rose by 5.7% month-on-month in May from 1.6% in April, with transport equipment among the sectors leading growth. Inventory was said to have similarly increased by 5.1% in May from previous month on improved production of electronics parts and devices, among others.
Tags:economic recovery, Great 2011 earthquake and tsunami, Industrial production, Japan
Posted in Economy, Japan, Natural Disasters | Comments Off on Signs that the Japanese recovery is beginning
June 10, 2011
NYT: On Thursday, shares in Tokyo Electric again fell to a record low, at one point slumping to 148 yen ($1.85), down 93 percent from prequake levels. Shares finished at 192 yen ($2.40), down 4 percent from the previous day, and the company already had a 1.25 trillion yen loss in the year ending March 31, the largest annual loss for a nonfinancial institution in Japanese history.
The physical damage from the accident at the Fukushima Daiichi nuclear power plant has been so widespread that even conservative estimates of compensation claims amount to tens of billions of dollars — a burden that could render Japan’s largest utility insolvent….
….
And banks were so certain of this that they agreed, in early April, to lend almost 2 trillion yen ($25 billion) to the struggling utility company. In the eyes of the market, Tokyo Electric was too big to fail.
Now, three months later, the market is not so sure.
…. Meanwhile, the head of the Tokyo Stock Exchange, Atsushi Saito — who was once the president of a state-sponsored organization that assisted ailing companies, — shocked investors when he suggested in an interview last week with local media that Tokyo Electric should go through court-led restructuring, similar to the path Japan Airlines had taken since declaring bankruptcy last year.
Tokyo Electric is Japan’s biggest corporate bond issuer, representing about 8 percent, or about 5 trillion yen, of the country’s 70 trillion yen corporate bond market. And because many of Japan’s largest banks hold shares in Tokyo Electric, they have already taken a direct hit from the utility’s difficulties.
The Tokyo Metropolitan Government owns about 3 percent of Tokyo Electric’s shares, and the city’s finances have been thrown into disarray as share prices plunge and dividends are canceled.
Tags:Fukushima cosequences, TEPCO insolvency, Tokyo Electric Power Company
Posted in Business, Japan, Natural Disasters | Comments Off on Tokyo Electric close to insolvency
April 9, 2011
In the long term Tokyo Electric will need Government support probably in the form of a partial nationalisation but now it is the market traders and their games which control the movement of the share price.
From the Wall Street Journal:
Shares of Tepco ended at their limit-up level of Y420, up 24%, as the Tokyo Stock Exchange imposed a temporarily higher margin rate requirement on new investors. The TSE hiked the margin rate on Tepco shares to a minimum of 50%–of which at least 20% must be cash–from 30% (with no cash requirement), in line with a pre-existing rule set up by the exchange. “The selling pattern has changed, and some people are covering their existing short positions as they are nervous about even stricter rules in the future,” said Yukifumi Watanabe, a trader at Himawari Securities.
Tags:The Tokyo Electric Power Company, Tokyo Stock Exchange
Posted in Business, Japan | Comments Off on TEPCO shares recover – somewhat – as short sellers get nervous
April 5, 2011
Update! BBC:
A leak of highly radioactive water into the Pacific Ocean from Japan’s crippled Fukushima Daiichi nuclear plant has been stopped, its operator reports. Tepco said it had injected chemical agents to solidify soil near a cracked pit, from where the contaminated water had been seeping out.
TEPCO reports the first signs that at least one of the leaks has been found and that preventive measures seem to be having some effect according to NHK:
TEPCO has injected a hardening agent beneath a leaking concrete pit in a bid to stem the flow of highly radioactive water into the sea. The firm says the leakage seems to be decreasing, following the infusion of the hardening agent.
The utility showed reporters a photo of the leak on Tuesday evening, saying it indicates such a decrease. TEPCO said it will infuse another 1,500 liters of liquid glass. Tokyo Electric Power Company started infusing liquid glass into gravel below the pit near the Number 2 reactor at 3 PM on Tuesday.
Leakage - before and after: screen shot from NHK
TEPCO spotted a crack in the pit 3 days ago while trying to find the source of the leakage of contaminated water into the Pacific Ocean. Since then, the utility has tried in vein to seal the pit with concrete, or to plug piping leading into it with a polymer mixture. A test using a dye agent showed the possibility that the radioactive water is leaking from a cracked pipe, and then seeping through gravel into the concrete pit.
TEPCO is planning to board up the breached sections of an offshore dike to prevent the tainted water from spreading further into the sea. It is also considering building underwater barriers at 3 locations, including one near a water intake for the Number 2 reactor
Tags:Fukushima Dai-ichi nuclear plant, radioactive leaks, TEPCO
Posted in Japan, Natural Disasters, Nuclear Power | Comments Off on Fukushima radioactive water leakage now stopped
April 4, 2011
Fukushima Dai-ichi reactors #1 to 4 will never operate again. Politically, it is difficult to see how reactors #5 and 6 could be brought back into operation though technically it may well be feasible. But right now the focus is on finding where exactly the radiation leaks are coming from. The process of tracing all leaks and gradually bringing them all under control is likely to take months rather than weeks.
Some of the nuclear hysteria is dying down and some media attention is returning to the people affected by the quake and the tsunami. And nobody has received anything like a fatal dose of radiation from Fukushima.
And mentioning Fukushima in the same breath as Hiroshima and Nagasaki (which our instant media pundits are inclined to do) is obscene.
TEPCO seems to be getting its house in order and perhaps the efforts of Chairman Tsunehisa Katsumata are having some effect.
Update from NHK:
TEPCO, is continuing its efforts to identify the exact route of the highly radioactive water flowing into the Pacific from its damaged Fukushima Daiichi nuclear power complex.
TEPCO poured a white liquid into a tunnel leading to a concrete pit where the contaminated water is leaking through a crack. This operation was undertaken to determine the exact route the water is taking to the ocean from the pit, located near the plant’s Number 2 reactor.
Monday’s work follows a failed attempt on Sunday to stop the flow of contaminated water by injecting a polymer absorbent into a duct connecting the tunnel with the pit. TEPCO says it will inject the chemical again to block the duct as soon as it has identified the leakage route.
The utility company has also been working on removing radioactive water from the basements of the turbine buildings for two of the plant’s reactors.
The radioactive water in the condensers for the two reactors is being transferred to storage tanks. As soon as the condensers are emptied, the water from the reactor will be drained into them to allow work to begin to restore the reactors’ cooling systems.
Work to remove the water was begun on Sunday at reactors Number 1 and 2. A similar operation will start at the Number 3 reactor on Monday.
As a temporary measure, the Nuclear and Industrial Safety Agency is considering setting up silt barriers near a water intake for the Number 2 reactor.
Tags:Fukushima Dai-ichi nuclear plant, The Tokyo Electric Power Company, tracing radiation leaks
Posted in Japan, Natural Disasters, Nuclear Power | Comments Off on Fukushima Dai-ichi – Tracing the leaks
April 2, 2011
It is becoming increasingly clear that the Fukushima nuclear plant successfully withstood quake accelerations which were somewhat higher than had been designed for but the real damage came from the tsunami which overwhelmed the defences of the plant and then knocked out all the emergency generators (13 of them in the basement apparently). That in turn knocked out all cooling pumps and cooling functions and then the die was cast…..
image IAEA - credit Google Earth
From JAIF:
The chief executive of General Electric has stressed that the GE reactors at the Fukushima Daiichi nuclear plant have no structural problems. Jeff Immelt spoke to NHK and other media outlets on Thursday. Some observers say the No. 1 and 2 reactors, the oldest types at the plant, have a flaw in their designs. He said the GE reactor has been in service for more than 40 years and is well tested and well-designed and has been upgraded over time. Immelt said in Washington on Thursday that he was aware of the doubts expressed about nuclear power plants. But he said it is necessary to diversify energy sources at a time of rising oil prices. In the United States, more than 20 reactors are in use that have similar structure to the Fukushima No. 1 and 2 reactors. Questions were raised about their safety after the Fukushima reactors were damaged last month.
Meanwhile TEPCO released further information about the forces measured during the quake:
TEPCO says 3 of the plant’s 6 reactors were shaken on March 11th by tremors exceeding forces they were designed to withstand. Reactor No.2 suffered the largest horizontal ground acceleration of 550 gals, which is 26 percent stronger than the reactor’s design limit.
(A gal – is named after Galileo Galilei (1564-1642) – and is a unit of acceleration equal to 1 centimetre per second per second – 1 cm /s/s)
TEPCO says the readings were 548 gals at the No.5 reactor, about 21 percent higher than its design limit; and 507 gals at the No.3 reactor, topping the capacity by about 15 percent. The power company says the strength of ground motions were close to or within the design parameters at the remaining 3 reactors, and at all 4 reactors of the nearby Fukushima Daini nuclear plant.
The utility says it had been planning to reinforce the reactors so they could withstand horizontal shaking of 600 gals, after the government reviewed their quake-resistance standards 5 years ago. But the work was not finished.
In the event strengthening the earthquake resistance would not have helped. By all accounts the tsunami wave was more than twice the height of the existing wall defences.
Reactors 3 and 4: image TEPCO
Tags:Fukushima Dai-ichi nuclear plant, GE reactors, The Tokyo Electric Power Company
Posted in Japan, Natural Disasters, Nuclear Power | 1 Comment »
March 31, 2011
From Kyodo News:
Radiation fears have prevented authorities from collecting as many as 1,000 bodies of victims of the March 11 earthquake and tsunami from within the 20-kilometer-radius evacuation zone around the stricken Fukushima nuclear plant, police sources said Thursday.
One of the sources said bodies had been ”exposed to high levels of radiation after death.” The view was supported by the detection Sunday of elevated levels of radiation on a body found in Okuma, Fukushima Prefecture, about 5 km from the Fukushima Daiichi Nuclear Power Station.
The authorities are now considering how to collect the bodies, given fears that police officers, doctors and bereaved families may be exposed to radiation in retrieving the radiation-exposed bodies or at morgues, according to the sources.
Even after the bodies are handed over to the victims’ families, cremating them could spread plumes containing radioactive materials, while burying the victims could contaminate the soil around them.
The following are the latest casualty figures related to the earthquake and tsunami that hit northeastern and eastern Japan on March 11, according to the National Police Agency as of 9 p.m. Thursday:
Number of people killed 11,532
Number of people missing 16,441
Tags:earthquake and tsunami, Japan, radiation in corpses, toll of dead and missing
Posted in Japan, Natural Disasters, Nuclear Power | Comments Off on The dark side of black
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