Japan's Prime Minister Highlights Country's Economic Transformation at NYSE

On September 25th, H.E. Shinzo Abe, Prime Minister of Japan, addressed "Abenomics" and the future of the world's third largest economy before a packed audience of over 300 executives, professionals, government officials and media at the New York Stock Exchange.

Abe's ultimate goal: to fire up US corporate and investor interest. The Prime Minister met privately with a select group of US CEOs, and capped his day on Wall Street by ringing the Closing Bell - an historic first by a sitting Japanese Prime Minister - to a rousing round of applause. His NYSE visit followed the the annual United Nations General Assembly, where world leaders converge to for political and economic discussions.

Abe has been particularly successful in tauting his "Abenomics" policies which have revived the Japanese economy through delivery of “three arrows" - monetary easing, massive fiscal stimulus, and structural reforms. The Nikkei stock index is up over 60% since just before the Prime Minister assumed office in December last year, and 2^nd Quarter GDP growth surged to 3.8%, on an annualized basis, exceeding expectations. The wealth and success of Japan's richest is increasing with this rising tide.

Reflecting renewed interest in Japanese economy, the combined trading activity in Japanese companies listed on the NYSE has roughly doubled in first 8 months 2013 vs. same time period 2012. In his opening remarks, Duncan Niederauer, CEO, NYSE Euronext, discussed Japan’s relationship with NYSE, which lists 16 Japanese companies (representing market capitalization totaling $825 billion), employs over 40 NYSE staff in Japan, and has partnerships in the areas of derivatives, technologies, and market data. (He also noted the special place Japan holds for him, as he lived in Tokyo with his family for 3 years when he was working at Goldman Sachs.)

Abe still has much work cut out for him. He has proposed on a controversial plan to increase the consumption tax from 5% to 8% (if approved, the increase could take effect April next year) to help narrow Japan’s bulging budget deficit. This is a part of major structural reform that is seen as key to a sustainable recovery by those inside and outside Japan.

I've summarized some highlights of the Prime Minister's speech here:

In the first “Wall Street” movie, Japan is referred to many times, including as an economic juggernaut. In the 2010 sequel, Japan is conspicuous only by its absence.

When the 1990s bubble burst, Japan entered a 20 year period of economic deflation and stagnation. However, there is now money to be made in Japan - Japan is back!

Japan will survive as long as it releases its intrinsic potential.

Japanese food is an example of what we can market to the world. I have a dream that someday sushi and tempura carts are as popular on the streets of NYC as hot dog carts.

Japanese technology is cutting edge and can contribute to the good of the world. Our trains travel at 205 mph and are quiet and comfortable. Since bullet trains began running in 1964, there has never been a single train-service related injury or fatality. Japan has a train that uses new superconducting magnetic levitation technology that is the fastest train in the world, clocking in at 311 mph. It could shorten a trip from NYC to DC to only 1 hour. Compared to planes and autos, the new train would save time and cut carbon dioxide emissions. I have proposed such a connection from DC to Baltimore to President Obama.

America enjoys economic power through shale gas and oil deposits, which lowers fossil fuel costs. In contrast, Japan faces a scarcity of fossil fuels, but this circumstance has forced us to become masters of innovation, developing green and efficient energy sources. Since 1973, Japan has increased its energy efficiency by 40%, providing new opportunities for growth and more investment opportunities.

70% of the world’s lithium ion batteries (including those used in Tesla autos) are made in Japan.

If the world were to switch its 6.5 billion light bulbs for Japanese LED bulbs – which consume 1/5 the electricity used by incandescent bulbs - 200 new nuclear power plants worth of energy would be saved.

The Fukushima accident must be overcome and we must strive to have the highest level of safety in the world.

There are now only 2MW-class wind energy turbines in the world, but Japan is now working to float 7MW–class wind turbines off the coast of Fukushima.

Japanese energy technologies have great potential, and to accelerate innovation in this area we will reform the electric power system. A new “zero regulation structure” should be created to remove obstacles that impede new companies from creating pioneering technologies - provided these companies independently take measures to ensure safety.

I want to turn Japan into an entrepreneurial powerhouse like the United States and regulatory reform is key to eliminating obstacles in the way of the private sector.

Recent national elections have given the ruling coalition a majority in the Upper and Lower Houses of the Japanese legislature. This will help me translate my decisions into action because “without action there can be no growth.”

With Ichiro reaching the 4,000 hit milestone in Japan and the US, and Caribbean’s Wladimir Balentien breaking Sadaharu Oh’s 55 home run record in Japan, being overly concerned about borders and nationalities are a thing of the past.

Asia Pacific is the center of world growth. Freedom, human rights, and rule of law are values common to the US and Japan. It is historically inevitable that US and Japan join together to help craft the Trans-Pacific Partnership Agreement (TPP).

I have started to blog for the Japanese Huffington Post. Ms. Huffington once said: If Lehman Brothers was Lehman Brothers and Sisters, they might still be around. She also said that men seem to believe in “sleep deprivation and one-upmanship” but she believes that’s not the way to go, as such men typically fail to see the icebergs just ahead. I have given a lot of thought to what she has been saying.

The power of women in Japan is untapped. The first woman to ever have a seat on the NYSE was Muriel Siebert, who once said that American business will find that women in the workforce can be a competitive weapon against Japan and Germany and other countries that limit their executive talent pool to the male 50% of the population.

Japan still limits its talent pool to mostly men. Exponentially increasing childcare availability is a key to more labor force participation of women, many of whom quit their jobs upon marriage or having children.

Prior to when I became Prime Minister, Japan had negative growth - this year Japan has had positive growth of over 3% annualized for 2 consecutive quarters.

Production, consumption, and now capital investment are all up. This growth is not simply due to aggressive monetary easing.

As soon as I return to Japan, I will be firing my third arrow from my three-pronged growth strategy - I will push for a bold tax reduction to stimulate investment. Japanese consumption will help grow US exports, contributing to the global economic recovery.

Japan, the 3rd largest economic powerhouse in the world, will be back in full force.

How will Japan help revive the global economy? In three words: “BUY MY ABENOMICS.”

Wall Street is always ahead of the curve; now is your chance.

49 years ago, the Tokyo Olympics ushered in a time of high economic growth in Japan; today, Japan is elated as it prepares for the Olympic and Paralympic Games 7 years to be held in Tokyo 7 years from now.