June 25, 2021 (Fri) Cloudy

・Price competition is widening in the electric vehicle (EV) market.

Mitsubishi Motors <7211> [Closing price 299 yen] domestically aims to lower the price of commercial EVs for compact cars to under 2 million yen by fiscal year 2023, about a 20% reduction.

It will be the cheapest among EVs from Japanese players.

Renault of France will release a new model at about half the price of the current EV in Europe this autumn.

Widespread adoption will intensify competition with Chinese firms that are ahead in the mass market.

・The Cheap Japan: Galapagos Turn（4）Twilight of Made-in-Japan Anime

Animators are flowing out to Chinese companies. A survey by the Japan Animation Association (Tokyo, Chiyoda) shows 54.7% earn 4 million yen or less annually.

This falls below the national private sector average (4.36 million yen, according to the National Tax Agency). Small and micro animation studios not affiliated with the association face even harsher conditions.

“Young workers earn 90,000 yen per month, cannot make ends meet, and 90% leave within three years of joining,” is the point raised.

With insufficient capital investment, Japanese small and mid-sized production companies are finding it difficult to maintain drawing quality.

Cheap Japan clearly reflects many of the long-standing “k weaknesses” Japan has carried.

A era where the rules of competition and underlying assumptions can collapse in an instant. Could the hints reflected by prices be used to drive reforms?

・The government has outlined the procedures for issuing COVID-19 vaccination certificates.

Municipalities will be the points of contact, aiming to issue them initially on paper by late July.

The certificates are intended only for overseas travelers; domestic use is not contemplated.

・Max restaurant chain Zensho <7550> [Closing price 2,840 yen] will raise approximately 30 billion yen from Japan Bank for International Cooperation (DBJ).

Most of the funds will be used to accelerate overseas store openings.

In regions where vaccination is progressing, they will expand openings of gyudon and sushi restaurants.

(Nikkei, front page)

・The National Police Agency will establish a new organization as early as fiscal 2022 to directly handle major cybercrimes.

With cyberattacks targeting critical infrastructure rising, the aim is to build a state-led system modeled on overseas practice and contribute to an international investigative network.

・European Union (EU) seeks to reset relations with Russia.

The EU and Russia clash over human rights issues, and Germany and France advocate talks with Russia and President Putin as a path to de-escalation.

The EU will discuss responses at the summit that began on the 24th.

・COVID-19 vaccinations are expanding in the U.S. and Europe, and human mobility is rapidly recovering.

Flight numbers are rising for travel and business demand, and bookings at restaurants are returning to pre-pandemic levels.

Recovery in Asia, which lagged in vaccination, is slower, but the U.S. and Europe are leading examples of a “post-vaccine world.”

However, even in the advanced U.S. and Europe, the spread of the India variant (Delta) remains a threat.

・Travel demand is showing signs of recovery in Japan as well.

All Nippon Airways (ANA) <9202> [Closing price 2,692.5 yen] Domestic air travel for the four-day weekend from 7/22 is expected to be double last year’s level;

the Obon holiday period in August is expected to be 2–3 times higher.

Utilization rates for July overall are about 51%, but for the four-day weekend the rate is expected to average about 75% during the period.

Reservations are rising especially among older travelers as vaccination progresses.

Peak number of users during the four-day weekend is expected to exceed 100,000 per day. If it exceeds 100,000, it would reach levels not seen since the peak of November 2020 during the “Go To Travel” period.

JR East <9020> [Closing price 8,000 yen] As for the temporarily suspended reserved-seat sales, 16 of 58 trains will operate from 7/1–15.

HIS <9603> [Closing price 2,558 yen] Requests from elderly travelers for overseas trips are increasing.

In hotels in easily accessible areas from Tokyo, reservations are rising.

There is a tendency for higher-priced rooms to fill first; “Since June, the pace of reservations has suddenly risen.”

・The government, due to tight vaccine supply, will check whether companies and municipalities have secured sufficient supplies.

Nationwide, vaccines needed for all eligible recipients are secured, and excess supply is likely to be reduced, resolving the issue.

・On the 24th, the government announced that, for COVID-19 vaccine administration, on June 9 and 15–17 daily vaccinations exceeded the government target of 1 million doses.

At least among seniors aged 65 and older who have completed at least one dose, the rate exceeded 51%, i.e., more than half.

・Tax revenue for FY2020, despite the direct hit from the COVID-19 crisis, exceeded the FY2019 level.

As of December 2020, tax revenue was projected to exceed 58 trillion yen, up from 55.1 trillion yen due to stronger-than-expected receipts.

The impact of the pandemic was milder than expected, and corporate tax revenues are likely to exceed previous estimates.

・Bank of Japan <8301> [Closing price 31,700 yen] The June Outlook for Economic Activity and Prices (Outlook Report) released on July 1 is largely complete.

The DI for large manufacturers' business conditions is expected to improve from +5 in March to +15, a 2 1/2-year high.

Global economic activity resuming is expected to lift business sentiment.

・On the 24th, the government maintained the overall assessment of the economy in the June monthly Economic Report as the same as the previous month:

“The economy shows signs of picking up, but weakness remains in some areas.”

Private consumption, including dining out and overseas travel, continues to be sluggish.

・The Biden administration is moving to review financial regulations.

While financial institutions have stronger health due to post-Leman crises regulations, wealth inequality has not been resolved.

The aim is to adjust the stance to protect the less affluent, shifting away from the pro-wealthy Trump-era policies.

・Dai-ichi Life Insurance <8750> [Closing price 2,004.5 yen] signs a partnership with DeNA <2432> [Closing price 2,277 yen] on the 24th.

DeNA will leverage its digital expertise to jointly expand healthcare-related services.

・The surge in copper and other nonferrous metals has cooled.

Copper prices are about 10% lower than the May high.

China announced a plan to release nonferrous national reserves to real demand buyers, including metal processing manufacturers, to curb commodity prices.

In May, it also tightened regulations on speculative trading and buying to encourage covering long positions.

・Global COVID-19 infection numbers (deaths) as of 4:00 PM on 6/24, compiled by Johns Hopkins University: World total 179.6 million cases (9,443 deaths)

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There are early signs of tourism demand recovery in Japan