The Government's New Growth Strategy Plan
May 20, 2021 (Thursday) Cloudy then rain
- Defense Minister Nobuo Kishi said in an interview with Nikkei on the 19th that the budget request for defense will be increased without sticking strictly to the 1% of gross domestic product (GDP).
This includes strengthening defense around the Okinawa Prefecture and the Senkaku Islands in light of China's maritime expansion, and addressing new domains such as space and cyber-attacks.
- U.S. customs authorities have, as of the 19th, halted imports of Uniqlo shirts operated by Fast Retailing Co., Ltd. (Ticker: 9983) [close: 8,470 yen].
The measure involved prohibited imports related to medical supplies linked to groups in China's Xinjiang Uygur Autonomous Region.
Fast Retailing issued a comment on May 19 calling the U.S. decision "very regrettable."
The company's North American sales account for only a few percent of total, and the direct impact on its business from the stoppage is expected to be minor.
- The Development Bank of Japan (DBJ) will allocate about 40% of its total lending and investment over the next five years, amounting to 5.5 trillion yen, to ESG (Environmental, Social, and Governance) sectors.
This will raise the share by roughly 50–80% from conventional levels, encouraging funded companies to develop green technologies such as hydrogen energy.
For borrowers, focusing on ESG will become an even more important condition for obtaining funds.
- The recovery from the COVID-19 crisis shows a clear K-shaped divergence between developed and emerging economies.
The IMF, in April, projected that the growth rate of the G7 would exceed 5% in 2021, rebounding sharply from a negative 8% in 2020.
This contrasts with regions like Latin America, which slumped to around -7% in 2020 and remained only in the 4% range in 2021.
A major determining factor for the outlook is the movement of the anchor currency, the dollar.
The dollar index, comparing currencies of 60 countries/regions, hit a trough in the 110s in January and rose toward around 120 by April.
If U.S. economic expansion continues and interest rates rise, a stronger dollar could have a direct impact on the finances of emerging economies.
If credit crises spread from emerging economies with slow economic recovery, stock prices could fall, and developed countries could also suffer indirect impacts.
Solidarity to bridge the K-shaped gap is being tested.
- New construction of Russian-made reactors begins in China.
The China-Russia leaders plan to expand cooperation in the nuclear power sector, which does not emit CO2 during electricity generation, and take the lead on climate change issues.
It is also aimed at deterring through the U.S.-Russia foreign ministers' talks on the 19th.
- NTT, <9432> [Close: 2,895.5 yen] will start practical use of a system that processes data in space.
Data obtained from ground vehicles and power plants will be processed among satellites and returned as information that leads to more efficient operation.
NTT's optical communication technology can reduce data transmission power consumption to one hundredth of wireless communication.
SKY PerfecTV! (JSAT) <9412> [Close: 432 yen] will partner, starting from 2022 with a demonstration, aiming to launch a commercial satellite in 2025 and start services in 2026.
- The new coronavirus is causing an increase in severe cases among the working-age population during the fourth wave.
From data collected by the Ministry of Health, Labour and Welfare between March 31 and May 12, the share of severe cases among people 50 and under is a bit over 20%, a sharp increase from around 10% in the third wave.
- U.S. IT majors are strengthening features that protect personal information on smartphones.
Google announced on the 18th that, starting this autumn with a new OS, it would change how app usage of personal information is notified and make it easier for users to configure settings.
- The government has summarized a new growth strategy.
It centers on pillars including “investment in people” to support diverse work styles, decarbonization, economic security, and digitalization.
- Key points of the growth strategy framework
Investment in people: expand freelance protection systems and promote introduction of side jobs, part-time employees
Decarbonization: accelerate transmission networks, rapid-charging facilities for electric vehicles, and hydrogen station development
Economic security: support for establishing domestic plants for advanced semiconductors and storage batteries; attract data centers domestically
Digital: promote next-generation communication standard “6G”
Revitalizing corporate vitality: revisit price-setting processes for initial public offerings (IPOs), and consider the SPAC (special purpose acquisition company) framework
Pharmaceuticals: support for development of domestically produced vaccines
- Japan National Tourism Organization (JNTO) on the 19th reported that the number of foreign visitors in April was 10,019, a 99.6% decrease from April 2019 before the COVID-19 outbreak.
- The price of Bitcoin, a representative cryptocurrency, continues to fall.
In the Asian markets on the 19th, there were moments when it briefly fell below the psychological threshold of $40,000.
Falling below $40,000 for the first time in three months since February 9, with a drop of more than 10% from the previous day.
Bitcoin has fallen about 40% from its mid-April all-time high.
- As of 4:00 p.m. on May 19, the number of COVID-19 cases (deaths) worldwide totals 164.24 million cases and 146,09 thousand deaths, according to Johns Hopkins University.
United States 32,996,981 (84,4); India 25,496,330 (4,529); Brazil 15,732,836 (2,513)
United Kingdom 4,466,220 (7); Italy 4,167,025 (201); Spain 3,619,848 (70); Germany 3,615,962 (266); Argentina 3,371,508 (744); Colombia 3,144,547 (482)
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