Osaka – Sunday, June 27, 2010
Nikkei, Japanese newspaper specialized in business/economy, reported today that Asia business is driving revenue recovery of Japanese Companies. It came clear that Asia is the engine of generating revenue (profit) for one out of four companies when they analyzed operating revenue of financial data by region for fiscal year ending March 2010.
Operating profit from Asia business has recovered to the level of 82% of those of before the worldwide financial crisis in 2008. This is far greater than Americas (43%) and Japan (30%). It is true that there are risks such as increase in personnel cost of China. However, the Japanese government has developed the new growth strategy as explained in the previous article Japan's New Growth Strategy Approved - What Is It? making the most of growth in Asia economy and therefore it is likely that further shift in Asia business will take place among Japanese companies.
1. How did Nikkei come to the conclusion?
Nikkei collected and analyzed financial data of 419 listed companies (excluding financial and new companies) that are:- a)fiscal year ends in March; b)discloses revenues by region; and c)sequent data is available since 2000.
2. How much was the operating profit generated by Asia business?
Operating profit generated by Asia (including Oceania) business was 1.8814 trillion yen in total, which covers 26% of total operating profit generated worldwide. Although this percentage is behind Japan, which was 52%, it is far greater than Americas (11%) and Europe (3%).
3. How is Asia business driving recovery of major companies?
Companies covering 25% of 419 companies analyzed have been recovering driven by Asia business. Most of them are of major manufactures of automobile and electronics. Operating profit generated by Toyota’s Asia business was the greatest, totaling 203.5 billion yen. This attributed to Toyota’s consolidated operating profit returning to black even though their America and Europe business still remains in red.
Major Companies Generating Revenue/Profit Primarily from Asia Business
(Source: Nikkei, translated by the author)
Company Name / Amount of Operating Profit from Asia Business (billion yen) / % of Operating Profit from Asia Business*
Toyota / 203.5 / 139
Denso / 75.3 / 54
TDK / 65.9 / 251
Suzuki / 56.1 / 67
Toshiba / 46.1 / 41
Daikin / 37.9 / 88
HOYA / 34.1 / 58
Seiko Epson / 27.2 / 158
Hitachi Construction Machinery / 26.5 / 219
Rohm / 26.5 / 108
* above 100 = the total operating profit from business in other regions are negative (i.e. loss)
Suzuki’s business is strong in India, where they have market share of approximately 50% in passenger cars. Card produced locally topped 1 million for the first time. The top management commented “operating profit generated by business in India covers almost 70% of consolidated operating profit”.
Toshiba’s operating profit from Asia business doubled from previous year totaling 46.1 billion yen. This was because of business growth in their infrastructure and digital consumer electronics businesses.
4. How is Asia business recovery compared?
Revenue and profitability recovery from Asia business is outstanding. Sales have recovered to 70% and operating profit has recovered to 82% of the level of fiscal year ending March 2008, i.e. before the worldw ide financial crisis. Profitability of Asia business is also high compared with other region. Operating profit of Asia for the analyzed companies turned out to be 9% in average, which is far greater than Japan (45), Americas (3%) and Europe (1%).
This is because profit tends to expand in the process of market recovery for Asia where cost is comparatively low and inflation is comparatively high, compared with, for example Japan, whose profitability is more difficult to improve with high yen and deflation.
5. What is the outlook for fiscal year ending March 2011?
Asia is assumed to remain the engine of further business/financial performance recovery of Japanese companies for fiscal year ending March 2011.
For example, UniCharm Corporation estimates to increase its operating profit by 19%. For sales increase, third plant in China has been constructed in the end of 2009. TOTO plans to generate approximately 70% of assumed worldwide operating profit from China business. To achieve this, they will strengthen sales of housing equipment in inland area.
The government’s new growth strategy leading to strengthening economic relationship with Asia countries could mean positive effect on Asia business of Japanese companies. However, there are risks such as devaluing of the Chinese yuan (RMB) and increase in personnel cost of factory workers in high growing market of China, which has big impact on management. In addition, competition with strong companies of the west and Korea is severe. It is high likely that the quality of Asia business strategy determines how their Asia business further grows.
2010年6月27日日曜日
2010年6月20日日曜日
Japan’s New Growth Strategy Approved – What Is It?
Osaka – Sunday, June 20, 2010
Nikkei, Japanese newspaper specialized in economy/business and politics, reported through June 17 to 19 about the New Growth Strategy of Japan under the new leadership of the Kan Administration, which was announced on June 17 and was approved in a Cabinet meeting on June 18.
The objective of the strategy is to realize “strong Japanese economy” advocated by the new Prime Minister Naoto Kan by creating new demand in 4 sectors of environment, healthcare, tourism and Asia to create total of 5 million jobs by 2010. The target economy growth is to mark real GDP (taking inflation into account) growth at 2% and GDP growth not taking inflation into account at 3% in average over the next 11 years. And the policy is to turn rate of increase in consumer price index from negative to positive in 2011 and get out from deflation.
1. Summary of the New Growth Strategy
Chapter 1: Objectives of the New Growth Strategy
Realize strong economy, finance and social security
Chapter 2: Policy of the New Growth Strategy
Consolidated reorganization of economy, finance and social security
Chapter 3: Policy of the 7 strategic fields/focuses and target outcome
Details explained later in the article.
1) Target 2020
(1) Growth to achieve at least GDP of 2% (taking inflation into account) and of 3% (not taking inflation into account).
(2) Turn rate of increase in consumer price index from negative to positive by the end of 2011 (to terminate deflation)
(3) Decrease unemployment rate below 4% at an early stage.
2) Measures to achieve Target 2020
The Government Strategy Projects consist from 7 fields. The 7 fields are the 6 major fields (focuses) from the growth strategy announce in December 2009 as mentioned in the previous article How Japan's Growth Strategy Should Be? including environment/energy, healthcare, Asia, tourism/local community activation, science/technology, employment/human resources, plus newly added “finance”.
(1) Gradually lower corporate tax (effective tax rate) to the level of other major countries.
(2) Establish medical stay visa.
(3) Promote infrastructure export targeting mainly Asia by collaboration between public and private.
(4) Decentralization of people having holidays (execution from 2012 if possible).
(5) Create “Integrated Exchange” by 2013 that trades deals bonds & securities, finances and products.
3) Targets to achieve
Create new demand and jobs
Sector / Demand (trillion yen) / Jobs (million)
Environment / 5 / 14
Healthcare / 5 / 28.4
Asia / 1.2 / 0.19
Tourism / 1.1 / 0.56
Total / 12.3 / 4.99
2. Summary of the Government Strategy Projects consisting from 7 fields
1) Environment / Energy
(1) Accelerate expansion of regenerable energy: to expand the market size to 10 trillion yen
Implement a system purchasing all regenerable energy such as wind & water power and biomass, implement smart grid (next generation transmission network); promote construction of wind power and geothermal generation.
(2) Create “Environmental Future City”: to expand environment/energy market to more than 50 trillion yen and create 1.4 million new jobs
Establish new law necessary for deregulation and tax measures; export know-how of urban development to overseas such as China.
(3) Revitalize forest / forestry: to establish foundation competitive against imported timber within 10 years, and make self-sufficiency ratio of timber over 50%.
Implement new “Forestry Management Plan” and support management strengthening attributing to upsizing; strategically allocate budget for woods and fiends management, and implement a system directly supporting forest management / environmental preservation.
2) Healthcare (Medical, Nursing etc.)
(1) Expand proliferation of advanced medical: to expand new medical equipments/pharmaceuticals and regeneration medicine, to generate positive economic effect of 700 billion yen/year.
Build consortium including medical organizations and administrations in the fields of cancer and dementia, and invest strategically research cost and talent; simplify evaluation procedure of advanced medical; abolish “drug lag” (new drugs launched in Japan after approved in western countries).
(2) International medical exchange: to have 500,000 people equivalent to 10% of Asia demand visit Japan, to generate positive economic effect of 1 trillion yen/year.
Accept more patients from abroad; implement new “medical stay visa”; enable medical treatment by non-Japanese doctors and nurses in Japan.
3) Leveraging economic growth of Asia
(1) Expand overseas business of infrastructure industry: to sign orders for overseas plant of 7000 billion USD to create 19.7 trillion yen market.
Establish Government Strategy Project Committee and strengthen top sales; expand function of public finance such as JBIC (Japan Bank for International Cooperation)
(2) Lower effective corporate tax rate and promote Japan as hub of Asia: to double interaction of resources between Japan and other Asian countries.
Lower effective corporate tax rate to the level of major countries; pay attention to obtaining tax revenue source including increasing/expanding taxation base; develop tax measures etc. as incentives in attracting foreign capitals; all to be implemented from 2011.
(3) Promote and increase development of global talent and acceptance of advanced talents: to accept 300,000 foreign students.
Implement “Point System” covering western and Asian countries; treat immigration control favourably depending on work history and achievements; support so that more Japanese students would have international experience.
(4) Develop and execute intellectual property strategy / Cool Japan overseas roll out: to acquire content revenue of 1 trillion yen from Asia.
Establish a strategic organization of science, technology and innovation to drive standardization of Japanese technology; strengthen digital distribution of Japanese software; prevent proliferation of pirated copy in overseas market.
(5) Establish Free Trade Zone for Asia Pacific: to double interaction of resources between Japan and other Asian countries.
Develop basic policy regarding comprehensive economic alliance/collaboration such as EPA (Economic Partnership Agreement) by the autumn of 2010; promote accepting talents in medical and nursing fields by embedding system of accepting nurse and care worker candidates to Japan from abroad based on EPA.
4) Tourism oriented country / Activating community
(1) Create “General Special Zone System” and promote Open Sky: to increase foreigners in Japan to 25 million, to generate positive economic effect or 10 trillion yen and create 560,000 new jobs.
Create International Strategic General Special Zone targeting urban development of certain cities that will be the economic growth engine; special treatment in deregulation and tax in improving infrastructure; make Haneda Airport “International Airport that operates 24 hours”.
(2) Increase foreigners staying in Japan and decentralize people having holidays: to achieve target of 2.5 million foreigners staying in Japan and then increase to 30 million.
Speed up procedures to issue visa for foreign tourists; study to revise law related to public holidays such as decentralizing holidays by region; all to be implemented from 2012.
(3) Expand used housing and reform market: to double to 20 trillion yen.
Establish synthetic plan including construction inspection/assurance, proliferation of housing history information; set new energy saving standard for housing.
(4) Open public facilities to private: to expand business size of disposal business management right by PFI to 10 trillion yen.
Open to private construction management by public sector; dispose of business management right by PFI (Private Finance Initiative) system leveraging private capital.
5) Science / Technology
(1) Strengthen global competitiveness and develop talent: to increase to over 100 research centres ranked top 50 globally in each fields.
Improve “leading post graduate schools” responsible for advanced researches; leverage talents such as post doctorates.
(2) Leverage information communication technologies: to realize “FTTH (Fibre To The Home” that makes all households able to benefit from broad band services.
Improve electronic administration enabling one stop use of information communication technologies at any time; utilize information communication in medical, nursing and education.
(3) Expand R&D (Research & Development): by expanding total R&D cost of public and private to over 4% of GDP.
Strategic organization responsible for science, technology and innovation will develop cross functional execution plan.
6) Employment / Human resource
(1) Unify kindergarten and nursing schools etc.: to eradicate by 2017 children waiting to enter nursing schools regardless of how their parents work.
Abolish requirements to enter nursing schools; establish service supply system such as users being able to freely choose facilities and business owners freely can set prices.
(2) Implement “Career Rank” system and support work-force etc.: to optimize employment rate to 80% and decrease part-time jobber to 1.24 million which is minus 40% from the peak.
Create system of evaluating vocational capability in growth fields of nursing and environment; strengthen support to people who have been unemployed for a long time.
(3) “New Public”: to make 50% of the citizen to participate in “new public” such s volunteer of their community and workplace.
Design tax system from which citizens benefit from public policy; review financial system for small organizations that support NPOs.
7) Finance
Create Integrated Exchange: to assure presence of Japan market in Asia.
Create Integrated Exchange that can trade bonds & securities, finances and products altogether by 2013.
3. Comments and evaluations from experts
There are so my challenges to overcome. Roadmap to achieve over 300 policies by 2020 has not yet been clarified. Many issues/obstacles remain such as breaking barriers among ministries, filling insufficient measures for deregulation, acquiring financial resources etc. Concrete processes are set only for 2010 – 2013 and no specific targets are set at milestones. Processes to achieve the targets are left to each ministry; therefore, many experts point out it is quite possible that policies that truly need to be executed will remain unexecuted. It is not easy to realize GDP growth of 3% (not taking inflation into consideration) while increasing consumption tax that Prime Minister Mr. Kan clearly implied to study to implement on June 17.
Comments and evaluation from 5 experts are as below.
1) First commentator / evaluator (Economist)
Focusing on environment and healthcare is good. Making Haneda Airport international that operates 24 hours is something that could not have been challenged when LDP was the ruling party.
2) Second commentator / evaluator (Economist)
Productivity improvement is vital for an economy when population is decreasing. Deregulation in healthcare and nursing is insufficient.
3) Third commentator / evaluator (Economist)
Stance of overcoming deflation by collaboration with the BOJ (Bank of Japan) is good. Policy from the supply side such as deregulation is desirable from the perspective of achieving both growth and sound financial status.
4) Forth commentator / evaluator (Professor)
Balancing of the policies has been improved but feasibility is a question. Blueprint for restructuring finance and social security is necessary.
5) Fifth commentator / evaluator (Professor)
Target of overcoming deflation by collaboration of the government and BOJ can be evaluated but lacks detail or specifics excluding lowering corporate tax. GDP growth of 3% (not taking inflation into consideration) is insufficient.
4. The author’s thought
Comments and evaluations from the 5 experts are all valid. The DPJ, the current ruling party, would need time to restructure and reorganize to realize strong economy, finance and social security, after LDP had ruled for 50 years making Japan as it is today. Although it might lack in details or specifics, roadmap and milestone targets, the new Kan administration did announced clearly the policy. Having said that, the situation is extremely urgent and if it should take too much time Japan would end up like Greece, as many experts point out, and therefore it is highly more concrete roadmap, milestone targets etc. are expected to follow soon.
Breaking various barriers and financial resources are the two major challenges.
The former is about game/power change and change in culture. Prime Minister Mr. Kan is from a family of non-politician (unlike many other politicians in Japan who become prime ministers) and has made an apology statement against bureaucrats when he was the Minister of Health and Welfare, so if he cannot achieve, it is probably that no one else can achieve.
The latter can only be achieved by increasing revenue (i.e. tax) and/or decreasing annual expenditure (i.e. cost). On June 17 Prime Minister Kan clearly implied that he is thinking of increasing (doubling) the consumption tax. It is understandable but other measures should be taken before increasing consumption tax such as eradicating practice of high-level government officials taking jobs in the private sector, slashing number / salary etc. of people in the Congress, and initiate further screening process that started last year. Otherwise, Japanese citizens would not be convinced.
We all hope strong leadership from Prime Minister Kan, and support from public and private sectors, with minimum resistance.
Nikkei, Japanese newspaper specialized in economy/business and politics, reported through June 17 to 19 about the New Growth Strategy of Japan under the new leadership of the Kan Administration, which was announced on June 17 and was approved in a Cabinet meeting on June 18.
The objective of the strategy is to realize “strong Japanese economy” advocated by the new Prime Minister Naoto Kan by creating new demand in 4 sectors of environment, healthcare, tourism and Asia to create total of 5 million jobs by 2010. The target economy growth is to mark real GDP (taking inflation into account) growth at 2% and GDP growth not taking inflation into account at 3% in average over the next 11 years. And the policy is to turn rate of increase in consumer price index from negative to positive in 2011 and get out from deflation.
1. Summary of the New Growth Strategy
Chapter 1: Objectives of the New Growth Strategy
Realize strong economy, finance and social security
Chapter 2: Policy of the New Growth Strategy
Consolidated reorganization of economy, finance and social security
Chapter 3: Policy of the 7 strategic fields/focuses and target outcome
Details explained later in the article.
1) Target 2020
(1) Growth to achieve at least GDP of 2% (taking inflation into account) and of 3% (not taking inflation into account).
(2) Turn rate of increase in consumer price index from negative to positive by the end of 2011 (to terminate deflation)
(3) Decrease unemployment rate below 4% at an early stage.
2) Measures to achieve Target 2020
The Government Strategy Projects consist from 7 fields. The 7 fields are the 6 major fields (focuses) from the growth strategy announce in December 2009 as mentioned in the previous article How Japan's Growth Strategy Should Be? including environment/energy, healthcare, Asia, tourism/local community activation, science/technology, employment/human resources, plus newly added “finance”.
(1) Gradually lower corporate tax (effective tax rate) to the level of other major countries.
(2) Establish medical stay visa.
(3) Promote infrastructure export targeting mainly Asia by collaboration between public and private.
(4) Decentralization of people having holidays (execution from 2012 if possible).
(5) Create “Integrated Exchange” by 2013 that trades deals bonds & securities, finances and products.
3) Targets to achieve
Create new demand and jobs
Sector / Demand (trillion yen) / Jobs (million)
Environment / 5 / 14
Healthcare / 5 / 28.4
Asia / 1.2 / 0.19
Tourism / 1.1 / 0.56
Total / 12.3 / 4.99
2. Summary of the Government Strategy Projects consisting from 7 fields
1) Environment / Energy
(1) Accelerate expansion of regenerable energy: to expand the market size to 10 trillion yen
Implement a system purchasing all regenerable energy such as wind & water power and biomass, implement smart grid (next generation transmission network); promote construction of wind power and geothermal generation.
(2) Create “Environmental Future City”: to expand environment/energy market to more than 50 trillion yen and create 1.4 million new jobs
Establish new law necessary for deregulation and tax measures; export know-how of urban development to overseas such as China.
(3) Revitalize forest / forestry: to establish foundation competitive against imported timber within 10 years, and make self-sufficiency ratio of timber over 50%.
Implement new “Forestry Management Plan” and support management strengthening attributing to upsizing; strategically allocate budget for woods and fiends management, and implement a system directly supporting forest management / environmental preservation.
2) Healthcare (Medical, Nursing etc.)
(1) Expand proliferation of advanced medical: to expand new medical equipments/pharmaceuticals and regeneration medicine, to generate positive economic effect of 700 billion yen/year.
Build consortium including medical organizations and administrations in the fields of cancer and dementia, and invest strategically research cost and talent; simplify evaluation procedure of advanced medical; abolish “drug lag” (new drugs launched in Japan after approved in western countries).
(2) International medical exchange: to have 500,000 people equivalent to 10% of Asia demand visit Japan, to generate positive economic effect of 1 trillion yen/year.
Accept more patients from abroad; implement new “medical stay visa”; enable medical treatment by non-Japanese doctors and nurses in Japan.
3) Leveraging economic growth of Asia
(1) Expand overseas business of infrastructure industry: to sign orders for overseas plant of 7000 billion USD to create 19.7 trillion yen market.
Establish Government Strategy Project Committee and strengthen top sales; expand function of public finance such as JBIC (Japan Bank for International Cooperation)
(2) Lower effective corporate tax rate and promote Japan as hub of Asia: to double interaction of resources between Japan and other Asian countries.
Lower effective corporate tax rate to the level of major countries; pay attention to obtaining tax revenue source including increasing/expanding taxation base; develop tax measures etc. as incentives in attracting foreign capitals; all to be implemented from 2011.
(3) Promote and increase development of global talent and acceptance of advanced talents: to accept 300,000 foreign students.
Implement “Point System” covering western and Asian countries; treat immigration control favourably depending on work history and achievements; support so that more Japanese students would have international experience.
(4) Develop and execute intellectual property strategy / Cool Japan overseas roll out: to acquire content revenue of 1 trillion yen from Asia.
Establish a strategic organization of science, technology and innovation to drive standardization of Japanese technology; strengthen digital distribution of Japanese software; prevent proliferation of pirated copy in overseas market.
(5) Establish Free Trade Zone for Asia Pacific: to double interaction of resources between Japan and other Asian countries.
Develop basic policy regarding comprehensive economic alliance/collaboration such as EPA (Economic Partnership Agreement) by the autumn of 2010; promote accepting talents in medical and nursing fields by embedding system of accepting nurse and care worker candidates to Japan from abroad based on EPA.
4) Tourism oriented country / Activating community
(1) Create “General Special Zone System” and promote Open Sky: to increase foreigners in Japan to 25 million, to generate positive economic effect or 10 trillion yen and create 560,000 new jobs.
Create International Strategic General Special Zone targeting urban development of certain cities that will be the economic growth engine; special treatment in deregulation and tax in improving infrastructure; make Haneda Airport “International Airport that operates 24 hours”.
(2) Increase foreigners staying in Japan and decentralize people having holidays: to achieve target of 2.5 million foreigners staying in Japan and then increase to 30 million.
Speed up procedures to issue visa for foreign tourists; study to revise law related to public holidays such as decentralizing holidays by region; all to be implemented from 2012.
(3) Expand used housing and reform market: to double to 20 trillion yen.
Establish synthetic plan including construction inspection/assurance, proliferation of housing history information; set new energy saving standard for housing.
(4) Open public facilities to private: to expand business size of disposal business management right by PFI to 10 trillion yen.
Open to private construction management by public sector; dispose of business management right by PFI (Private Finance Initiative) system leveraging private capital.
5) Science / Technology
(1) Strengthen global competitiveness and develop talent: to increase to over 100 research centres ranked top 50 globally in each fields.
Improve “leading post graduate schools” responsible for advanced researches; leverage talents such as post doctorates.
(2) Leverage information communication technologies: to realize “FTTH (Fibre To The Home” that makes all households able to benefit from broad band services.
Improve electronic administration enabling one stop use of information communication technologies at any time; utilize information communication in medical, nursing and education.
(3) Expand R&D (Research & Development): by expanding total R&D cost of public and private to over 4% of GDP.
Strategic organization responsible for science, technology and innovation will develop cross functional execution plan.
6) Employment / Human resource
(1) Unify kindergarten and nursing schools etc.: to eradicate by 2017 children waiting to enter nursing schools regardless of how their parents work.
Abolish requirements to enter nursing schools; establish service supply system such as users being able to freely choose facilities and business owners freely can set prices.
(2) Implement “Career Rank” system and support work-force etc.: to optimize employment rate to 80% and decrease part-time jobber to 1.24 million which is minus 40% from the peak.
Create system of evaluating vocational capability in growth fields of nursing and environment; strengthen support to people who have been unemployed for a long time.
(3) “New Public”: to make 50% of the citizen to participate in “new public” such s volunteer of their community and workplace.
Design tax system from which citizens benefit from public policy; review financial system for small organizations that support NPOs.
7) Finance
Create Integrated Exchange: to assure presence of Japan market in Asia.
Create Integrated Exchange that can trade bonds & securities, finances and products altogether by 2013.
3. Comments and evaluations from experts
There are so my challenges to overcome. Roadmap to achieve over 300 policies by 2020 has not yet been clarified. Many issues/obstacles remain such as breaking barriers among ministries, filling insufficient measures for deregulation, acquiring financial resources etc. Concrete processes are set only for 2010 – 2013 and no specific targets are set at milestones. Processes to achieve the targets are left to each ministry; therefore, many experts point out it is quite possible that policies that truly need to be executed will remain unexecuted. It is not easy to realize GDP growth of 3% (not taking inflation into consideration) while increasing consumption tax that Prime Minister Mr. Kan clearly implied to study to implement on June 17.
Comments and evaluation from 5 experts are as below.
1) First commentator / evaluator (Economist)
Focusing on environment and healthcare is good. Making Haneda Airport international that operates 24 hours is something that could not have been challenged when LDP was the ruling party.
2) Second commentator / evaluator (Economist)
Productivity improvement is vital for an economy when population is decreasing. Deregulation in healthcare and nursing is insufficient.
3) Third commentator / evaluator (Economist)
Stance of overcoming deflation by collaboration with the BOJ (Bank of Japan) is good. Policy from the supply side such as deregulation is desirable from the perspective of achieving both growth and sound financial status.
4) Forth commentator / evaluator (Professor)
Balancing of the policies has been improved but feasibility is a question. Blueprint for restructuring finance and social security is necessary.
5) Fifth commentator / evaluator (Professor)
Target of overcoming deflation by collaboration of the government and BOJ can be evaluated but lacks detail or specifics excluding lowering corporate tax. GDP growth of 3% (not taking inflation into consideration) is insufficient.
4. The author’s thought
Comments and evaluations from the 5 experts are all valid. The DPJ, the current ruling party, would need time to restructure and reorganize to realize strong economy, finance and social security, after LDP had ruled for 50 years making Japan as it is today. Although it might lack in details or specifics, roadmap and milestone targets, the new Kan administration did announced clearly the policy. Having said that, the situation is extremely urgent and if it should take too much time Japan would end up like Greece, as many experts point out, and therefore it is highly more concrete roadmap, milestone targets etc. are expected to follow soon.
Breaking various barriers and financial resources are the two major challenges.
The former is about game/power change and change in culture. Prime Minister Mr. Kan is from a family of non-politician (unlike many other politicians in Japan who become prime ministers) and has made an apology statement against bureaucrats when he was the Minister of Health and Welfare, so if he cannot achieve, it is probably that no one else can achieve.
The latter can only be achieved by increasing revenue (i.e. tax) and/or decreasing annual expenditure (i.e. cost). On June 17 Prime Minister Kan clearly implied that he is thinking of increasing (doubling) the consumption tax. It is understandable but other measures should be taken before increasing consumption tax such as eradicating practice of high-level government officials taking jobs in the private sector, slashing number / salary etc. of people in the Congress, and initiate further screening process that started last year. Otherwise, Japanese citizens would not be convinced.
We all hope strong leadership from Prime Minister Kan, and support from public and private sectors, with minimum resistance.
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