Japan's international business environment and recent economic developments

¶ … current events from the last six months that relate to the international business environment of Japan. It will include an analysis of Japan's international business activities, Japan's government, private enterprise in Japan, and the impact of international organizations on Japan.

International Business Activites

China's rapid domestic growth has been important in maintaining Japan's economy. Specifically, steel exports to China have been growing, increasing profits for four major Japanese steel companies (Shimbun).

Japan's ongoing business relationship with the U.S. continues to thrive. Almost 20 years after it first began U.S. production, Honda's U.S.-based operations made their 10 millionth vehicle (Yahoo News).

Government

Disturbingly, a recent poll suggests that Japanese citizens are losing faith in their government. Only a week after the November 9th Lower House election, almost 52% of respondents felt that Koizumi would not honor his campaidn promises (Bloomberg.com, Japan's voters).

Japan's government has recently entertained the idea of sanctions against North Korea in retaliation for earlier abductions of Japanese citizens. Prime Minister Junichiro Koizumi has noted that further aggrivation of the situation could lead to economic sanctions (Japan Today, PM eyes N. Korea).

Private Enterprise

Private enterprise in Japan continues on a sluggish path. On the domestic front, Japanese companies have reported that corporate incomes have declined for the second year in a row (Japan Today, Corporate Incomes Drop).

While Japan's international exports are growing; this may not translate into growth in the private sector. Notes Toshiyuki Hara, Mizuho Securities Co.'s senior market economist, "the strength of the recovery is being limited by the fact that companies aren't increasing jobs" (Bloomberg.com. Japan's Export-Led).

Conclusion

In conclusion, current events in Japan indicate that Japan's economy remains strong, especially in the international sector. While steel exports to China, and an ongoing relationship with the U.S. continue to underpin healthy international exports, confidence in the Prime Minister is dropping, and the government is threatening sanctions against North Korea. Further, corporate incomes continue to decline, and few jobs threaten private enterprise. The WTO has recently become involved in the disintegrating dispute on America's restrictions on steel imports, but the continuing effors of organizations like The United States-Japan Foundation afford hope for continuing a positive and healthy international business relationship with the United States. Taken together, the recent news presented in this short report indicates that Japan must improve its domestic economy, and pay careful attention to trade disputes with the U.S. In order to retain a healthy economy.