Category: Japan

Musical Chairs

Ichiro Ozawa resigned last week as leader of the Democratic Party of Japan (DPJ) over a fundraising scandal. The opposition democrats had a leadership election on Saturday and were faced with the choice between Yukio Hatoyama and Katsuya Okada, two former DPJ leaders with solic track records as total losers. Hatoyama won by a comfortable margin.

dpj-race

The basic political profiles of the two men are:

* Hatoyama was head of the DPJ from 1999 to 2002, after which he resigned after taking responsibility for the “confusion” over rumors about the merger with the Liberal Party, which was at the time lead be former DPJ leader Ichiro Ozawa. The two parties ultimately did merge, and Hatoyama took a role in party leadership. (Hatoyama’s tenure was preceded and followed by Naoto Kan, another regular in the leadership roster of the DPJ).

* Okada became head of the DPJ in 2004 and led the party to one of its largest electoral victories in history during the 2004 upper house election. The winning streak didn’t last — he resigned a year later after his party suffered a dramatic losses in the 2005 general election that saw Koizumi’s ruling party the Liberal Democratic Party take its strongest win in history.

For an opposition party that has been floundering in defeat for more than a decade as it struggles to take power, the candidates for the leadership are a sorry pair. Not only are they both uncharasmatic repeat losers, it shows the party has a poor ability at cultivating new leaders.

Hatoyama’s selection is especially ironic when you consider that weeks ago, the DPJ suddenly made their public pet issue the ending of hereditary elected positions. In many districts in Japan, long-serving members of the Diet retire and have sons run in their place. I don’t have current figures, but I’ve read that at one time, as many as one third of the districts had such hereditary members. The DPJ is trying to end the practice, but this new and sudden moral mission is amusingly ironic now that Hatoyama is the party leader. Hatoyama is the grandson of former Prime Minister Ichiro Hatoyama, the son of former Foreign Minister Iichiro Hatoyama, and his brother is the current ruling party Minister of Justice. Do the rules, or at least the spirit of the rules, not apply to the leaders?

Hatoyama’s impending task is leading the party into an election that is just months away. The DPJ was favored to win for months, but with the new fundraising scandals facing the party and PM Aso finally finding his mojo, the LDP may now manage to win yet another election. And when Hatoyama and Okada are the best possible men to be proposed to lead the nation, perhaps that’s for the best.

This post also appears at ComingAnarchy.com — please comment here.

Kyoto’s 縁切り神社 (The Shrine of Cutting Bonds)

Shinto Shrines (Jinja:神社 or sometimes Jingu:神宮 in Japanese) tend to be full of wooden prayer tablets (ema:絵馬), which can generally be bought for a few hundred yen, allowing the patron to write a prayer to the kami (神god, spirit) of that particular shrine, hang it on the ema rack, and hope for the best. Although some shrines are known for having specialties, such as education (specifically, passing exams), romance, health, etc. most shrines tend to have a pretty repetitive mixture of prayers based on these commonplace themes. There are exceptions though, with the best I have run across being Kyoto’s Yasui Engiri Jinja (安井の縁切り神社, official name is Yasui Konpiragu:安井金比羅宮).

While you may find an occasional prayer for good grades or such by someone who doesn’t quite realize where they are, the majority of ema at Engiri Jinja, appropriately enough, contain prayers related to the theme of engiri, literally meaning “cutting of bonds”-which is commonly used today in reference to the ending of relationships, especially romantic ones. The first part of the word, en (縁) has a few different meanings, including “edge” or “porch-like area in old Japanese buildings”, but most importantly the Buddhist concept of pratyaya which I have not read up on but has something to do with causation, and by extension is taken in reference to such concepts as “fate”, “destiny”, “familial bond”, or “relationship”. The second part, giri or kiri (切り) simply means to cut or sever. This concept of severing “en” originally meant something more along the lines of cutting away the threads of negative destiny to relieve one’s bad luck, but today has come to refer primarily to the more conceptually simple act of severing personal relationships.
Continue reading Kyoto’s 縁切り神社 (The Shrine of Cutting Bonds)

Follow Adamu on Twitter

After following Neojaponisme’s experiment with Twitter for a while, I’ve decided to get in the game myself to respond to others’ tweets and post my own brief comments and linkage.You can see my page here and sign up for the RSS feed or join Twitter yourself to follow me! Here’s a sampling:

  1. Adam RichardsAdamukunWhy support Hatoyama for DPJ? These insane flash animations of course… http://bit.ly/Llcyu5 minutes ago from TwitterFox

  2. Adam RichardsAdamukunMatsumoto Kiyoshi record sales/profit. 3 cheers for garish yellow signs http://bit.ly/X4aHm7 minutes ago from TwitterFox

  3. Adam RichardsAdamukunRighteous old-school Sesame St. crayon-making video! http://bit.ly/14dYye15 minutes ago from TwitterFox

ENOUGH with the masks already! インフル予防効果のビミョーなマスク着用は不要

(Updated below)

DEAR JAPAN – YOU DO NOT NEED TO WEAR MASKS IF YOU ARE NOT SICK OR PARTICULARLY AT RISK FOR SWINE FLU!!!!!

In Japanese for clarity:

日本の皆様へ：豚インフルエンザを予防するには、マスク着用の効果は低いのである。これはＷＨＯの発表でも明らかであり、日本の各メディアでマスクの推薦は、十分な裏づけがあるとは言えないだろう。

世界保健機関（ＷＨＯ）及び米当局の米疾病対策センター（ＣＤＣ）は、マスク着用に関するガイドラインを発表しており、いずれも「どちらかというとマスク着用を推薦しない」との立場だ。主な理由は、マスクを正しく使用しないと逆に危険だからである。ＣＤＣによると、インフルエンザの症状が出ている者に対して、一人じゃない時や公共の場にいる時などはマスクの着用を推薦しているが、それ以外のケースについてはあえて「マスクの着用や呼吸装置の使用を推薦しない」としている。オバマ大統領なども言うように、よく手を洗ったり、うがいをしたり、セキをするときは袖で口を防いだりすることで十分らしい。

一方、ＷＨＯのサイトをそのまま引用すると「気分が悪くなければマスクを着用する必要はない。患者の面倒を見ている方は、その患者に近くなるときのみマスクを着用し、接触した後にすぐマスクを廃棄し、手を良く洗ってください。気分が悪いときでも出かけないといけないときは、口と鼻をふさいでください。マスクは、いつも正しく使用することが大事。もし誤った使い方をしてしまうと、かえって感染のリスクを高めるのである。」

要するに、日本でみるような、一日中同じマスクを着用し続ける習慣は逆効果ということだ。花粉症対策などでは、マスクの効果はあるようだが、周りの人の顔が見えないなど、社会的デメリットも多いと思う。豚インフルエンザの問題はともかく、日本のマスク文化のメリットがそのコストに見合うのか、疑問を抱かざるを得ない。

English translation:

People of Japan:  Sanitary masks have little effect in preventing swine flu. This is clear from  WHO reports and indicates that the Japanese media’s recommendations to wear masks do not have sufficient basis in fact.

Both the WHO and American CDC have released guidelines for the use of masks, and they have both taken the position that on balance masks are not recommended. The main reason is that they could actually be dangerous if not used correctly. According to the CDC, masks are recommended for people who have flu symptoms if they are not alone or if they go in public, but for all other cases they specifically state “masks and respirators are not recommended.” As President Obama and others have stated, it is likely enough to gargle, wash your hands often, and be sure to cough into your sleeve.

To quote from the WHO website, meanwhile, “If you are not sick you do not have to wear a mask. If you are caring for a sick person, you can wear a mask when you are in close contact with the ill person and dispose of it immediately after contact, and cleanse your hands thoroughly afterwards. If you are sick and must travel or be around others, cover your mouth and nose. Using a mask correctly in all situations is essential. Incorrect use actually increases the chance of spreading infection.”

In other words, the practice of wearing the same mask all day long as seen in Japan is actually counterproductive. They may have some effect in fighting hay fever, but there are social costs such as not being able to see people’s faces around you. Setting aside the swine flu issue, I cannot help but be doubtful as to whether the benefits of Japan’s mask culture justify the costs.

Even as concern over swine flu appears to be subsiding, Japan remains on high alert.  The conspiracy theorist inside me wonders if the hysteria has to do with PM Aso’s fight for political survival, as the economic turmoil has apparently whetted his appetite for building public support through fanning crisis. My case in point was a dead-tree op-ed in the Nikkei last week by a member of the editorial board (I think) who openly wondered if the swine flu would open the door to a glorious LDP-DPJ grand coalition (this was before Ozawa stepped down).

Even without a potential pandemic, many people in Japan wear masks when they are sick or stricken with allergies during hay fever season (starting at the end of winter and lasting off and on through May or so), backed by common recommendations by doctors. In fact, a recent Nikkei article noted that while masks used to be limited to hay fever season and when some people were worried about spreading colds to others, the practice has increased in recent years as people have become more used to them and earlier flu epidemics resulted in official campaigns to encourage people to wear masks. Today, they have become so widespread that people now use masks for non-health related reasons, such as to hide their faces. Some even report prefering to use masks in public to guard from germs in general or just as a kind of coping mechanism. It has gotten to the point that masks are a big business, and various innovations have come out to meet the needs of regular users. A recent article in magazine Hansoku Kaigi (Promotional Meeting) featured the success of campaigns to promote more advanced masks that are designed not to fog glasses (glasses-wearers make up a disproportionate share of mask wearers).

While railing against mask use is probably one of the most tired gaijin complaints, my gripe is not categorical – I am willing to accept actual, justified uses for the masks. For instance, on the topic of hay fever, the US-based Mayo Clinic website (itself sponsored by drug companies) only recommends them “when doing outdoor activities such as gardening.” I will accept that for some people  the pollen season in Tokyo can feel like you are constantly working in the garden. Hay fever in Japan is all too common due to the widespread cedar forests planted in the 50s in a failed attempt to develop a homegrown lumber industry. I too have felt as if I might develop hay fever just sitting at my desk. But even still, their widespread use outdoes even this justifiable concern.

Still, my chief gripe with them is only tangentially related to their effectiveness. I simply feel like a society where a third of the people is constantly hiding their faces is kind of depressing and unfriendly. If the masks were saving hundreds of lives a year it would be one thing, but the WHO actually warns against their widespread use!

This revelation really hit home on my way back from the US on a JAL flight direct from New York earlier this week. All the flight attendants wore masks to prevent infection during the height of the alert. While I will not fault them for protecting themselves, the usually sunny customer service came up a little lacking when I couldn’t be sure whether they were even smiling or not.

Worst of all is the uncritical recommendation of masks by the Japanese media (as can be currently seen on the Asahi.com front page), flying in the face of WHO recommendations.  Considering that the pharmaceutical companies (who make the masks) are ubiquitous advertisers in the media conglomerates (this blogger caught a documentary with one drug company executive laughing his ass off at how easy it is to sell masks), it is probably difficult to push back if it’s suggested that masks are the answer.

I realize that this post may in fact trigger a backlash among Japanese readers as I am a foreigner. I have heard it said from both Japanese and foreign commentators that using a mask to prevent the spread of germs is a uniquely Japanese form of politeness and selflessness that is hard for foreigners to understand (this phenomenon is also mentioned in the Wikipedia page on masks as a “decisively different” aspect of mask culture as opposed to other countries).

But I feel like this kind of misses the point. According to that same Wikipedia article, other countries, including the US, have seen widespread use of sanitary masks at various times in the past, such as the 1918 Spanish flu epidemic. But that is no reason to support the situation in Japan today.

Supposed folk beliefs and customs in all modern societies are often manufactured or encouraged by marketers with something to peddle (diamond wedding rings, it’s unlucky to light three cigarettes with one match, etc.), and I feel like this is a case in point. In this case, the marketers are preying on perceived danger as a ploy to develop regular customers of an ultimately unnecessary product with side effects that are, as I mentioned, generally depressing and antisocial.

UPDATE: Reuters points out that masks are far from the only official recommendation to prevent swine flu.

Asahi op-ed: Indonesian nurse program a cruel joke

There is an interesting opinion piece on the Asahi English site (thanks JapanProbe) on the Japan’s program to train Indonesian nurses started last year, under a bilateral economic treaty:

POINT OF VIEW/ Atsushi Takahara: Foreign nursing trainees face unfair hurdles

… Having finished a six-month Japanese-language study program, they started working in January and February. All of them are qualified to work as nurses in their home country and many of them have a lot of nursing experience. But most of those I met expressed anxiety and frustration.

This is because of the system that requires them to pass Japanese state exams within specified periods. If they fail, they must return to their home country. Would-be nurses have three chances to sit for the exams in three years of their stay. Conditions are tougher for aspiring care workers. Since foreign trainees are required to have actual working experience in Japan for at least three years before they can take the exam, they only have a single chance to pass in four years.

The language barrier weighs heavily on them. In particular, learning kanji characters is very difficult. For example, they must struggle with such technical terms as jokuso (bedsores) and senkotsubu (sacral region) that are difficult to read and understand, even for the average Japanese. Holding a Japanese-Indonesian dictionary, one trainee lamented: “I feel as though my head is about to burst.”

…
Under the comprehensive EPA, Japan accepts the trainees from Indonesia in exchange for the economic benefits, including abolition or reduction of tariffs on its exports of cars and electronic equipment. The government stands by the traditional policy of refusing to accept unskilled foreign laborers. Therefore, the government’s stance is that the acceptance of nursing trainees this time is a form of personnel exchange and is not meant as a measure to address a labor shortage. The government’s cold attitude seems to be a reflection of such a position.

After the government-sponsored six-month language training in Japan, the nurses must either study on their own or receive assistance from their workplaces to get their Japanese levels up to that of a practicing nurse’s. All for an all-or-nothing attempt at Japanese nursing qualification after four years! Sure, that’s what the program has been from the beginning, but I think what Takahara is trying to say is that what started as unfair remains unfair and should be changed.

So let me get this straight –  in order to fulfill the letter of a treaty requirement that benefits Japanese companies with tariff relaxation, the Japanese government has decided to use these already-qualified nurses as pawns and in the process waste years of their lives. A similar fate no doubt awaits the Filipina nurses slated for acceptance under a similar bilateral arrangement with Japan.

According to an overview of potential benefits of the Japan-Indonesia “economic partnership agreement” (EPA) (PDF) released at the time of signing in August 2007, Japan is the largest single export destination for Indonesian products. Japan, for its part, chiefly benefits from Indonesia’s abundant natural resources (a key factor in their decision to invade during WW2). The country is Japan’s second most important supplier of liquid natural gas after Australia. LNG provides 35% of the household gas supply in Japan, according to Wikipedia. As with most trade agreements, the sheer number of line items and flood of statistics makes it tough to get through in a matter of hours let alone minutes, but suffice to say this agreement provides considerable tariff reduction, promises of market access, and non-tariff regulatory reforms that all serve to lower the cost and hurdles to doing business in either country. Also like other bilateral trade agreements, Japan is likely getting the better deal thanks to Japanese companies already superior competitive position.

Though I loved studying kanji and pursued it with a passion, I am a spoiled American and that was when I was in my prime learning years in my late teens and early 20s. These experienced nurses, who are in this country to make a living and previously had little inclination to study a foreign language, must find the task quite daunting (and distracting from the actual practice of care-giving). If my experience with a much simpler examination is any indicator, Japan’s exam culture will be no joke for a tightly regulated profession like nursing.

Could no compromise be found to help actually make this program work? Of course, that would assume that the Japanese government wants the program to work. As the op-ed notes, the acceptance of these nurses was essentially a token gesture to the Indonesian government, not a good faith effort to do right by anyone, either the nurses who want to work in Japan or the hospitals, patients, and other stakeholders in Japan. While I cannot know the intentions of the crafters of this program (it appears to have been hammered out through bilateral negotiations led by the foreign ministry), it’s entirely possible that they’d prefer to see these programs fail so other countries won’t demand their inclusion or expansion in future economic negotiations.

This points to a possible problem with making these decisions within the framework of comprehensive trade agreements rather than Japan unilaterally deliberating on its own future. While I understand the rationale of international “free trade” agreements as a way to circumvent narrow national interests for the greater good of efficient economies, the tight restrictions on these nurses constitute anything but free trade. And as part of a treaty covering billions of dollars in trade and the entire economies of two countries, how can 208 nurses hope to be anything but a footnote?

But once negotiated, this program has in fact benefitted from a relatively high level of scrutiny, since it is a pilot program, the foreign, Muslim nurses stand out, and ironically because they are negotiating tools in high-level bilateral trade ties. As Takahara notes, “If the trainees go home feeling angry with Japan’s ‘cold policy’ and such a reputation spreads, it could cause a deterioration in Indonesian public sentiment toward Japan. ” For that reason and the real need to find solutions to Japan’s aging society, the government and the public have an interest in seeing programs like this succeed, though whether that interest will translate into a fair shake for these nurses or better results down the line is another issue entirely.  

Takahara and I may be proven wrong to conclude that the nursing exam is just too hard for most of these nurses, but I doubt it. As unjust as the Indonesian nurses’ situation sounds, perhaps the experience of these programs can open the issue to more public criticism and maybe some solutions (Takahara seems to be in favor of giving the nurses more time to pass the test and more flexibility and support in general). That way, what began as a farce can be turned into a workable program.

McDonald’s offering 8,000 yen in savings in exchange for your FREE MONEY

I have already received my FREE MONEY from the government, but it is already spent on my recent trip to the US. But for those who haven’t spent the 12,000 yen handout yet, McDonald’s has an idea – give it to them! In exchange, they will give you a coupon booklet worth 20,000 yen.

According to Sankei, purchasers of the coupons will have until November 14 to eat the equivalent of 69 value meals (or value “sets” as they are called in Japan). Booklets will be available to buy at McDonald’s restaurants throughout Japan from May 15 through July but might sell out at some stores before others.

A 40% discount is significant and a better deal than some of the other campaigns out there, but consuming 69 value meals in six months could be a challenge. A single person who buys one of the booklets on May 15 and never shares it would have to eat a value meal once every 64 hours or two or three times a week to use up all the coupons. I know I’d get sick of the food after a while, and surely just about anyone will have tried everything on the menu and then some after a few visits. The coupons might make more sense for large families who could space out their visits more and still use all the coupons. While some savvy shoppers might figure out ways to profit from the deals, I am not that sophisticated (sell them for a 20% markup and pocket the difference?).

Like most gift card programs, McD’s must be counting on a) lazy customers never bothering to use up the coupons’ full value, and b) those who do use them to generate additional sales by bringing friends or picking up side dishes. It could also have a PR element designed to deflect some of the negative publicity of its labor practices or even its own recent runaway success thanks to 100 yen burgers’ popularity in the recession.

My verdict – keep your money and spend it on what you really need/want, and save by skipping McDonald’s and making delicious home-cooked meals. They are cheaper AND better for you.

History of Book-Off

I happened to run across this neat little history of the Japanese used bookstore chain Book-Off from a 2003 brand profile. Perhaps surprisingly to many readers, I was actually familiar with Book-Off long before I first came to Japan due to their Manhattan outlet at 41st Street, just east of the main NYC Library building and Bryant Park. I cannot actually recall if I had ever visited before I started taking Japanese classes in the summer of 2001, but once I started learning Japanese I started making occasional trips to the NYC Book-Off, located a very short distance from either the Port Authority or Penn Station, which were the terminals by which I would enter the city from either my home town of Montclair or my college town of New Brunswick, respectively, at which I would buy things like childrens books of folktales or very easy manga, with which to work on my reading. Mirroring the Japanese chain’s pricing, it was divided into sections of variable but far less than cover price, and $1 books. Naturally, I have been to plenty of Book-Off’s in Japan over the years. Book-Off in NYC looked even more attractive when compared with the Kinokuniya outlet, which sells imported Japanese books at a significant markup from cover price. Interestingly, the Book-Off manages to acquire their used books from the local Japanese population. For example, a Japanese girl I knew in NYC who devoured stacks of $1 novels, which she would then sell back to Book-Off for a nominal fee (I believe slightly higher in store credit).

The profile paints Book-Off as a major revolution in used book-selling.

Twelve years ago, Sakamoto was abandoning his career as a piano salesman for a new adventure in sales. His idea, as good ideas so often are, was simple: establish a clean, well-lit used bookstore staffed with friendly, well-trained employees and create a pricing system designed to yield a high margin of profit.

In the service-oriented society of today, setting up shop with these ground rules might seem like a given. But in the Japan of 1990, used bookstores were dark, cramped, dusty affairs. Furthermore, an elite group of publishers, wholesalers, and bookstores had for years been cooperating closely with one another to squeeze their competitors out of the business. One of their main assets was a stipulation of the ironically named Antimonopoly Law, which prohibits the sale of books at prices other than what the publisher has fixed. This provision effectively eliminated competition among wholesalers and bookstores and raised the publisher/wholesaler/bookstore relationship to a level of prime importance.

Fortunately for the entrepreneurial Sakamoto, the Antimonopoly Law has nothing to say about used books. In less prosperous times, he reasoned, people would be forced to change their reading habits. They would be less willing to pay the exorbitant cover prices demanded by the big-title publishers. He came up with a simple but ingenious pricing system whereby his shops purchase books at 10 percent of their original cover price. They are then retailed at half the cover price. If, after three months, the books have not sold, they are then discounted to ¥100 (US .85, € .75).

I had of course never been to Japan before the advent of Book-Off so I am not sure quite how exaggerated or accurate the portrayal of all pre-Book-Off used bookstores as “dark, cramped, dusty affairs”, but it is true that a clear majority of old bookstores do match that description, usually tended by one very old man or woman who barely notices the customers’ presence except at checkout time.

The most interesting thing to me about this profile was the tidbit that “Sakamoto’s used books are cleaned and sanded using special techniques that he developed to make them look near mint.”

More details on getting FREE MONEY in Adachi-ku

And now the latest installment of the FREE MONEY saga, which started with our translations of the MLIT announcement and the system to be employed by Adachi-ku, the city where Adamu and I maintain our abodes.

(For those of you who don’t know, Adachi-ku is a somewhat dumpy residential ward on the northeast side of Tokyo. It is the fifth most populous of the 23 wards, and has the third-highest population of resident aliens after Shinjuku and Edogawa, so you would expect them to be close to the bleeding edge of gaijin affairs.)

Although I had some objections to the size of the reply envelope, the materials to apply for the stimulus payment were very straightforward.

I scanned a copy and uploaded it here. A couple of general comments before opening the floor for discussion:

Gaijin customization

To Adachi-ku’s credit, they prepared the explanatory materials in four languages. Besides the English one-pager I scanned, the application packet contained one-page instructions in Japanese, Chinese and Korean. The guide on filling out the form is also quad-lingual.

Identification

Some commenters at Debito’s blog have noted that their city demands a copy of ID and only accepts alien registration cards for foreigners. This is pretty lame.

Adachi-ku sent all of its applications as registered mail. In order to receive the application, you have to either (a) pick it up at your residence, or (b) go to the post office and show them some ID (driver’s license, passport, whatever). For them, that level of identity verification was enough; they don’t require any further showing of ID. They do require a copy of the cash card or passbook for the recipient’s bank account, which I suppose makes slightly more sense, although I don’t see why that verification is needed in order to *receive* money.

One side effect of this is that people who didn’t update their address or other registered information on time are probably screwed. One of my co-workers, for instance, still has his alien registration at an address which he left about two years ago didn’t update his visa renewal on his gaijin card, so city hall assumes he is an overstayer. Poor sap.

Komakai cash flow planning for the cross-border professional

I’ve been intrigued lately by some good pieces on gaijin personal finance. First there’s the blog Frugalista Japan, which is all about saving money and has some interesting tips to share. Then came this great piece on budgeting for the inaka lifestyle by Deas at “Rocking in Hakata.” And, of course, our own Adamu wrote recently about borrowing his way out of debt.

This stuff is great. For those of you who don’t know, I work in structured finance at a bank in Tokyo, which is an inherently unstable job these days (lots of going-away parties lately). To make matters worse, although my salary is pretty decent, going through three years of grad school gave me several figures of student loan debt to pay off, and I have to wire money to the US on a regular basis to cover these bills. So money management has been in the forefront of my mind for a while.

I started out keeping track of my accounts manually, but this carried three significant drawbacks. One was that it took a hell of a lot of time. One was the ongoing annoyance of fluctuating exchange rates and wire transfer fees, which really add up if you are doing things on a paycheck-to-paycheck basis. The other was that I would sometimes miscalculate something, or overlook a pending payment, and end up overdrafting one of my accounts, which can be REALLY expensive.

If you are rich, you can get an account with HSBC Premier and avoid many of these headaches. I am not rich, though, and even if I were, I would not want to stick 100 grand of cash into an uninsured account. Not in this economy.

Fortunately, the right accounting solution was in front of my eyes the whole time. Structured finance — whether in the form of asset-backed securities or syndicated loans (i.e. loans extended by a big group of banks rather than a single bank) — often revolves around the concept of “waterfalls.” This is the notion that some constant flow of money (business revenues, mortgage payments, etc.) trickles into an account somewhere and then gets divided among a bunch of recipients in a predetermined order on a regular basis, much like a multi-level waterfall pours water in different directions. For instance: “Bank A gets paid interest on its share of the loan, then any remainder gets split evenly between Banks A, B, C, and D, then the company which took out the loan gets to keep the rest.”

This concept works pretty well when you are getting a regular paycheck and need to pay bills in two countries. I set up a spreadsheet using Google Docs, and now I have an idea of exactly what to do with my money each month. I’ll start with the Japan side.

                        4/19/09   5/19/09
JAPAN
Last Balance            xxxxxxx   xxxxxxx
Paycheck          19th  xxxxxxx   xxxxxxx
Other Income                       57,550
JAL Card          27th   11,800         0
View Suica         4th  207,431    60,000
E-Bank Deposit          158,000   183,000
Rent              Last   90,000    90,000
Extraordinary             8,000
Discretionary            90,000    93,000
Wire to US                        199,040
End JPY Bal             xxxxxxx   xxxxxxx

Each column represents the cash flows from one incoming paycheck (I get paid on the 19th) and any extra income, such as my commuting allowance or the upcoming teigaku kyuufukin bonanza. I pool my yen in the bank account where the paycheck comes in, and my two credit cards automatically pull payments from that account. (My utilities get billed to these cards as well; the April payment is high because I put a few sizable nomikai on my card for the points.)

Then I stick spending money in a separate account with eBank, which I use because of its awesome cash card (it works as a Visa card and can pull money for free from Yucho and 7/11 ATMs) and easy online banking interface. The “E-Bank Deposit” line gets automatically calculated based on how much I plan to spend in rent, extraordinary expenses and discretionary expenses.

The “discretionary” line is my pocket money, which I use for groceries, restaurants, booze, gadgets, hot dates or whatever else comes up during the week. I keep this budgeted at 3,000 yen per day/21,000 per week for simplicity’s sake: it varies in monthly amount because the months have slightly different lengths. Then there is a line for “extraordinary” payments: gifts, travel and other potentially big-ticket items which I know are coming up.

Finally, I have to send money to the US to pay student loans. The rather random-looking “wire to US” number comes from the bottom half of my spreadsheet, which looks like this.

                        4/19/09   5/19/09
USDJPY rate               99.56     97.52

US
Last Balance            xxxxxxx   xxxxxxx
Wire from JP                     2,000.00
Interest                   2.48      0.44
Wire Fee                            18.00
Chase SLS         Last   389.62    389.62
KHESLC            10th   456.00    456.00
Chase CC          15th   400.00  1,400.00
Other Spend              405.64
End USD Bal             xxxxxxx   xxxxxxx

It’s easiest to read this from the bottom. I have two student loan accounts, which draw from my US checking account automatically every month, as well as a US credit card which is still carrying the bill from my last trip to the States. I simply set up the spreadsheet to calculate the ending balance for each month based on the starting balance and the scheduled payments in between. Then, whenever the ending balance comes up negative, I drop in a big wire transfer to top it up.

The spreadsheet automatically updates the USD/JPY exchange rate based on Google Finance data (one of the advantages of using Google Docs for this purpose), and the formula for the outgoing transfer amount accounts for the transfer charge and the rate spread. So whenever I go to make a transfer, I overwrite the auto-updated exchange rate formula in the spreadsheet with whatever exchange rate was actually used (generally the same one if I am quick enough), and all the numbers line up perfectly.

The beauty of this system is that it makes it really hard to run out of cash or miss a payment on any of your accounts; you can simply tweak a couple of numbers (like wire transfer amounts or credit card payments) to keep everything in the black in any given pay period. Setting the spreadsheet to make negative numbers bold and red helps a lot. This also makes it easier to game exchange rate fluctuations, as you can move your transfers around based on your own estimates of when the rates will be good.

Just to be even more komakai, I also set up a running balance sheet for myself so that I can track how my net worth is doing. Although I started out doing this on a monthly basis, I switched to quarterly accounting recently after reading Nassim Taleb’s book Fooled by Randomness. Taleb makes many good points in this book, but one that stuck out in my mind is that keeping a very tight eye on financial indicators which are mainly relevant in the long term (stock prices, property values, etc.) is likely to cause more stress than the benefit of the additional information can justify. Personal net worth is one such indicator: it’s nice to know when you will pay off your debt, or how much dough you are set to hoard by retirement age, but you don’t need to know it on a monthly basis, as those months where you buy a plane ticket, give to charity or have a wild night in Roppongi are likely to turn you off to the whole idea of accounting for yourself.

Paypal coming to Japan

UPDATE: Just to be clear, this article is about an expansion of Paypal’s services in Japan  into bank remittances. Paypal already offers some services in Japan linked to credit cards. Thanks to commenter Adrian for pointing that out.

The Nikkei has an article noting that thanks to law revisions set to pass in the current Diet session, restrictions on the remittance business will be substantially relaxed in a move that will finally allow Paypal to offer its services in Japan. The article contains an example of how sending money will change starting some time in 2010:

Current money transfer services offered by banks are not ideal for sending small amounts of money overseas. For example, a major Japanese bank charges 5,500 yen for wiring money to a U.S. bank account regardless of the amount.

PayPal and other online money-transfer services offer a cheaper, more convenient alternative to traditional bank wires. High fees have stopped a grandmother in Nagoya from sending a 5,000 yen birthday gift to a grandchild in the U.S., since she would have to spend more on fees than the amount she is sending.

If an online money transfer service such as PayPal can be used, the grandmother probably would have sent the money without hesitation because fees for sending 5,000 yen to the U.S. using that service come to no more than 200 yen.

This sounds tempting, but the numbers presented are misleading, especially in this English-language summary of the original Japanese article.

According to the print edition of Nikkei, Paypal will charge fees of 1.9-2.7% of the amount, plus an additional 30 yen fee, in contrast to banks which take a flat fee (usually around 4,000 yen, but Lloyds charges just 2,000) plus a foreign exchange fee of around 1%. So while the service looks cheap for small amounts like the example above, in reality the fees are cheaper than banks only up to around 150,000 yen, according to a company spokesperson quoted in the article (vs. Lloyds that number falls to 100,000 yen). For debt slaves like me who routinely send 200,000 yen overseas each month, this would make no difference at all.

And of course Paypal’s service has other benefits besides overseas remittances – it’s mainly a convenient way to pay for online auction purchases (without giving out credit card info) and other ventures that can turn into profits similar to those on https://bitcoinapex.com/, so maybe it will catch on here as well. Other benefits touted by the article included 24-hour service and “lower fees” though they did not present examples as to how the fees for domestic transfers would be cheaper.

Plus other businesses such as NTT Docomo are planning their own services, so maybe at some point someone will find a profitable way to make overseas remittance cheaper.