Japan

Japanese Prime Minister Shinzo Abe, who is to announce next month his much-anticipated strategy for economic growth, has quietly put aside plans to overhaul a rigid labor system that is blamed for many of the woes facing once-dominant Japanese corporations, The Wall Street Journal reported. Mr. Abe touts the growth program as indispensable to turning recent improvements in the economy into sustainable growth, and says that part of this effort must involve changing entrenched labor practices.

Investment banks are among the first and biggest beneficiaries of Japan’s new economic-stimulus policies, known as Abenomics. Since Prime Minister Shinzo Abe came into office in December with a plan to end more than a decade of deflation, banks’ underwriting business for both equity and bonds is soaring. Companies have more than tripled sales of stocks to 1.7 trillion yen ($17 billion) so far this year compared with the same period in 2012, according to data compiled by Bloomberg. Corporate bond issuances climbed to 3.1 trillion yen, the best start to a year since 2009, the data show.

New Bank of Japan Gov. Haruhiko Kuroda quickly and dramatically put his stamp on the long-beleaguered central bank, implanting a policy grand in substance and simple in presentation—a stark contrast with his predecessor, who favored incremental steps, emphasizing the complexity and the risks, The Wall Street Journal reported. Using placards with bright red print to explain the complex package of new policies, Mr. Kuroda boiled it all down to the number two: 2% inflation in two years by doubling the bank's purchase of bonds and doubling the monetary base.

Japan’s central bank governor has told parliament that the government’s vast and growing debt is “not sustainable,” and that a loss of confidence in state finances could “have a very negative impact” on the entire economy, the Financial Times reported. The warning comes as Shinzo Abe’s administration attempts to drag Japan out of more than a decade of deflation with aggressive monetary and fiscal stimulus.

Memory chipmaker Micron said the Tokyo district court issued an order approving its acquisition of Japanese memory chipmaker Elpida after creditors agreed to the plan, Reuters reported. Boise, Idaho-based Micron, which is losing money due to a crumbling PC industry, wants to create larger economies of scale and offered in July to buy Elpida for about $750 million in cash and to pay creditors a total of $1.75 billion in annual installments through 2019. Elpida's creditors voted to approve the deal on Tuesday, Micron said.

Struggling Japanese electronics maker Fujitsu is slashing 5,000 jobs, or nearly 3 percent of its global workforce, as it seeks to boost profitability by reshaping its computer-chip business and its overseas operations, the Associated Press reported. Fujitsu said Thursday the job cuts will be completed by the end of this fiscal year next month, and will rely on early retirement, layoffs and other methods. Details were undecided.

The Bank of Japan appears to have accomplished a tactical masterstroke in giving Prime Minister Shinzo Abe an ambitious inflation target and an "open ended" commitment to buying assets, without expending any of its policy firepower, Reuters reported in an analysis. At least that is financial markets' initial read. Japan's central bankers see it differently; a hard-fought compromise that allowed the Bank of Japan to fend off the most serious threat to its 15-year independence, but which left it obliged to carry out more radical policies in the future.

The Bank of Japan announced on Tuesday its most determined effort yet to end years of economic stagnation, saying it would switch to an open-ended commitment to buying assets next year and double its inflation target to 2 percent, Reuters reported. It issued a joint statement with the government promising to reach the inflation goal "at the earliest possible time," drawing praise from Prime Minister Shinzo Abe, who has piled relentless pressure on the central bank to take bolder measures to pull Japan out of deflation.

Japanese Prime Minister Shinzo Abe seeks a “bold policy leader” as the next Bank of Japan governor as he aims to end deflation and drive a recovery from recession, Bloomberg reported. The choice of a successor to Masaaki Shirakawa, whose term ends in April, will be made after consultations with Yale Professor Emeritus Koichi Hamada and others, Abe said yesterday on public broadcaster NHK’s “Sunday Debate” program. The government and central bank need to agree on implementing a 2 percent inflation target to end deflation, Abe said.

Japan's new government will likely soon follow the U.S. and France in raising taxes on its wealthiest citizens, amid continued concerns about the country's massive government debt, The Wall Street Journal reported. Prime Minister Shinzo Abe has attracted global attention—and turbocharged the Nikkei Stock Average—with pledges of bold new economic stimulus, including a big spending plan to be unveiled Friday, and pressure on the Bank of Japan to ease monetary policy.