Boston, MA -- (SBWIRE) -- 11/06/2013 -- Recovery in 2013 Will Lose Impetus In 2014

Since our last quarterly report Prime Minister Shinzo Abe has strengthened his position, given that after the Senate elections in July he now controls a majority in both the Upper and Lower Houses. The first two instalments of 'Abenomics' - economic policy announcements that eased monetary policy and provided a fiscal stimulus - have been pro-growth. BMI has consequently edged up its GDP forecast for 2013 to 1.8% (up from 1.4% in our last report). However, we are less optimistic about the upcoming third instalment (or 'Third Arrow' as it is known), which is intended to focus on industrial revitalisation. The government's intention appears to be to use tax incentives and credits to aid industrial consolidation in areas such as consumer electronics, to help Japanese companies compete more effectively on the global stage. However, there seems to be little appetite to tackle high domestic costs or to reduce staffing levels: Western-style redundancies remain socially unacceptable. Because of this we see the strength of the recovery beginning to fade next year with growth falling to 1.3%. On balance we believe that the economic improvements will fade in 2014 and, instead, heighten worries surrounding the country's precarious fiscal position.

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Headline Industry Data

- 2013 Port of Nagoya tonnage forecast to grow by 3.5% to reach 209.727mn tonnes, slower than the 8.8% growth rate achieved the preceding year. Box traffic at the same port will grow by 1.0% to 2.681mn twenty-foot equivalents (TEUs).
- The Port of Tokyo will remain Japan's largest container terminal, with box traffic gaining 4.3% to 4.997mn TEUs, down from 5.2% growth in 2012.
- The Port of Yokohama will see a 3.0% tonnage contraction to 117.749mn tonnes, and 4.9% container growth to 3.202mn TEUs.
- 2013 total trade growth forecast to expand by 2.9% in real terms, a little faster than the 2.5% achieved in 2012. Import growth will exceed exports.

After MOL Comfort Break-Up, New Safety Measures

The 7,000 TEU MOL Comfort split in half and sank on June 17 in waters near Yemen, raising a series of safety concerns. Around 17,000 containers full of consumer goods and other merchandise were lost. Initial reports suggested the accident was caused by structural flaws in the hull. MOL has taken precautionary measures strengthening the hulls of six vessels in the same class. The company engaged the services of London-based shipping design certification company Lloyd's Register as technical consultant, investigating the causes of the ship's breach.

Northeast Passage Seen As Promising For Japan

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