Benefits alone cannot satisfy enterprises.

Editor’s note: This article comes from the Nikkei Chinese website.

Makoto Kawara: Japanese life insurance companies will buy U.S. Treasury bonds in large quantities in the near future. Such predictions appeared in the financial markets of New York, the United States.

Japan’s long-term interest rates have been hovering at a low level, while the United States’ long-term interest rates have begun to rise because of the expected economic recovery, and the investment attractiveness of US Treasuries has increased. In August 2020, both the 30-year Japanese Treasury Bond and the 10-year U.S. Treasury Bond had yields above 0.5%, but the current yield is about 0.7% in Japan and 1.7% in the United States. It is normal for life insurance companies to start taking actions after March’s end-of-term settlement and entering new investment management.

In this case, the yen will face depreciation pressure. The reason is that if you want to buy U.S. Treasury bonds, you must sell Japanese yen to raise dollars. Life insurance companies have the financial strength to purchase 2 trillion yen in foreign bonds within a month, and they have shaken the yen exchange rate before.

The route starts from Wall Street, passes through Tokyo’s foreign exchange street “Nihonbashimotoshicho”, and finally arrives at the stock street “Dorocho”. The depreciation of the yen can bring benefits to corporate performance and Japanese stocks.

In 2020, many companies have announced their performance expectations at the exchange rate of 1 U.S. dollar to 106 yen. When the yen appreciates to 1 U.S. dollar to 102 yen in early 2021, concerns about performance decline have increased. The yen has recently depreciated to around 110 yen per dollar. If life insurance companies sell the yen, there will be less concern about yen appreciation.

Japanese companies have ushered in a new fiscal year due to two positive factors. One is that the economic stimulus policies and monetary easing measures of various countries have promoted the recovery of overseas economies. The Organization for Economic Cooperation and Development (OECD), which shows the prosperity prospects of major countries, has already surpassed the level of “before the epidemic” in January 2020.

Another positive factor is the depreciation of the yen. After the Nikkei stock index regained 30,000 points, there was a shock. Although it is not noticeable under this shadow, the Topix Stock Index (TOPIX) in March has set a new high for five consecutive months.

However, these benefits are all external factors, and the Japanese companies as the parties have not ignited their enthusiasm for management. The Purchasing Managers Index (PMI), which reflects the boom in the manufacturing industry, has not improved as fast as European and American companies. Japanese companies are hesitant to invest, which has resulted in listed companies having funds on hand exceeding 100 trillion yen at the end of 2020, reaching the highest level in history.

Enterprises from all over the world have begun to fight the sequence of “post-epidemic”. Intel previously announced that it will invest 20 billion US dollars to build a semiconductor factory in the United States.

The purpose is to enter the semiconductor foundry business and grab the market share of Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics of South Korea, which occupy a dual position in the industry. After the announcement, the stock prices of the two companies fell, and the market also sounded the clarion call for fierce competition.

Warren Buffett, a well-known American investor who bought a lot of Japanese trading company stocks in 2020, should now cheer Japanese companies on. He said: “Companies that forget about animal spirits (bloody) will only perish.”

The author once heard Buffett say, “If you want to invest successfully, you need to read Chapter 12 of the General Theory.” Chapter 12 of The General Theory of Employment, Interest and Currency by British economist Keynes in 1936 emphasized that the development of enterprises cannot be separated from Animal Spirits.

Animal instincts are like “risky” and enterprising thoughts like Intel’s large-scale investment. This is easy to say, and even innovative companies representing Japan have missed opportunities.

In 2000, Sony applied for a digital corporate currency patent that supports major currencies and is rarely seen in the world. The purpose is to deal with drastic changes in exchange rates. Sony also has businesses in which losses are settled in Japanese yen and profits are settled in U.S. Dollars. The current currency does not serve as a standard for measuring business. Japan needs to prepare a large amount of yen when issuing bonuses, and the cost of exchange transactions is also getting higher and higher.

So, Sony issued “Sony Coins” based on the currencies used in the world for internal company transactions and business evaluation. Just like airline mileage, as long as customers can use Sony currency to buy Sony products, they will be widely used outside the company. When customers who purchase currency come to Sony, Sony can increase the use of the funds raised.

But this idea was aborted. The management also made a lot of negative voices: “Sony alone can’t do this kind of thing” and “Worry about the processing power of the computer.”

“The bigger the company, the harder it may be to decide to start a new business.” Gao An Xiushu, a researcher at the Sony Computer Science Institute who was responsible for the development of Sony Coin, saw signs of a major corporate illness.

At the peak of financial technology, digital currencies are no longer uncommon. If it took the lead in research 20 years ago, Sony might become a more concerned company.

Gao An thinks it’s not too late to start. In response to the new crown epidemic, countries have strengthened their debt dependence. As a result, even major countries are at risk of losing trust in their currencies. The price of Sony Coin, which supports multiple currencies, is definitely more stable than that of each country’s own currency.

Gao An published an article in the company newspaper in 2020, advocating that Sony Coin will become an infrastructure supporting human life around the world, and calling for a renewed discussion. He pointed out: “This is a great way for Sony to achieve rebirth.Opportunity”.

This is also an appeal for all Japanese companies that are facing changes in the new business environment after the epidemic.

Hitachi Manufacturing Co., Ltd. invested 1 trillion yen in the acquisition of GlobalLogic Corporation of the United States, which shows that Japanese companies still have animal instincts. To what extent will this affect? Crazy investment funds will not go away, and the benefits alone cannot satisfy the business.

The author of this article is Makoto Kajihara, commentator of the Nikkei (Chinese version: Nikkei Chinese Net)

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