The numbers that defined Japan in 2020 and beyond

The Nikkei 225 average closing level on the last trading day of 2020 is an economic snapshot with caveats. Admittedly, above 27,000 was the index’s highest December 30 close since 1989. But today’s index highs are neither cheering nor foaming.

Despite its pandemic-proof surge, the index is still 41% below its 1989 peak. Even before Covid-19, the government was prepared for a demographic implosion of more than a million small businesses.

Here are five more numbers to help complete the picture of the world’s third-largest economy heading into 2021.

140 million yen ($1.36 million): The cost to the city of Tokyo of removing nearly 14 tonnes of uninvited – and inedible – oysters that had taken up residence under the wave barriers erected for the Tokyo 2020 Olympic canoe competitions. Emergency demollusc adds to the burden of the Covid-postponed Olympics which has already cost a government estimate of $25 billion. The delayed event presents unexplored logistical challenges if it is truly to be repeated in 2021. Companies that paid a collective sponsorship of $3.1 billion, the highest in history, have now paid $220 million to renew the contracts for another year. The Japanese public can recognize a financial black hole when they see one. Support is down.

7: The number of guests who reportedly joined Japanese Prime Minister Yoshihide Suga at an upscale steakhouse in Tokyo’s Ginza district for an end-of-year party in early December. The rally, which flouted months of government warnings, came as Covid cases in Tokyo had started to rise. The party included celebrities and a number of senior ruling Liberal Democrat officials over the age of 70.

For a Prime Minister now facing rapidly declining approval ratings and a strained national health system, the scandal is survivable but significant. Mr. Suga enters 2021 looking like a man who should primarily defend and obscure, rather than lead.

$5 million ($48,300): The amount of money allegedly paid to Japan’s former agriculture minister by an 87-year-old representative of Hiroshima-based Akita Foods to obtain ‘favors for the egg industry’ not specified.

The scandal, which is being investigated by prosecutors, may seem like a minor offence. But it relates to a theme that will dominate in 2021 – the increasingly proactive efforts of Japan’s top executives to defend businesses and industries under the structural threat of the country’s shrinking and aging population. By 2025, according to a government report, Japan will have 2.45 million small and medium-sized businesses whose owners are over the age of 70. By then, they should create a frenzy of asset sales, mergers and other corporate actions that will reshape Japanese business.

2: The number of separate requests for extraordinary shareholders’ meetings (AGEs) currently facing Toshiba, the tech conglomerate whose 2017 financial crisis and emergency stock issue left its register of investors exceptionally full of activists. No Japanese company has faced dual EGM demand before, but the ingredients are all there. Japanese market traditions are rapidly collapsing and many believe that Toshiba can count on government support when needed. For five years, the rise of activism in Japan has been a combustible market narrative. But Toshiba’s shareholder revolt — driven in part by fears the company is about to squander shareholder cash on big acquisitions — is set to start 2021 with a significant bang.

Number 1: Late December saw the death, at the age of 90, of Ezra Vogel, a titan of East Asian scholarship known for his provocative 1979 Japan as Number One: Lessons for America. For 10 years after its publication, as the economy boomed and Japanese manufacturers issued increasingly vehement challenges to their American rivals, the book delighted like a treasure map, marking with an “x” the places that seemed to give Japan its competitive powers. After the bubble burst, and through the stagnant “lost decades” that followed, it began to read as the epitaph of Japan.

Four decades after Vogel’s predictions, Japan leads the world (among other things) in the proportion of elderly people in its population, its debt-to-GDP ratio, and the length of time spent with zero interest rates. The lessons the world could learn from Japan’s reluctant supremacy in these areas are, in some ways, the most important it has ever taught.

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