Japan Market Update - July 2007 Edition

This week marked a seven year high for Japan's Nikkei Stock Market as it closed up 121 points at 18, 261.98. Upbeat analysts are looking at higher-than-expected profit growth in the July-September quarter for manufacturing industries. Market watchers believe the Nikkei will push past 19,000. Some analysts still believe the Japan stock market is lagging other international markets and has more potential to increase. In the currency market, the yen is hovering around 123 to the dollar, despite the strength of the Japanese economy.

Major Japanese companies remain upbeat, with confidence levels the same as three months ago and fueled by the weak yen and healthy profits. Investment sentiment remains positive and, with the start of the Japanese New Year in March, many firms mapped out plans to invest in plants, equipment, and business expansion.

The positive economic outlook, rising wages, and confidence should bode well for outbound tourism. JTB reported that summer overseas travel should increase 2 % and that traveler spending should increase to the highest level since 2000. Beach resorts appear popular for this summer. With these conditions and some aggressive marketing, the Japanese tourist market for Guam and Hawaii should firm up. Companies looking for a share of the business will need to sharpen their marketing approaches, as Japanese travelers are more informed and more experienced than ever before.

In other news around the Pacific, investment activity in Guam is heated, especially in the hospitality sector. And in Japan last week, Japan's Prime Minister Abe picked a female, Yuriko Koike, to be the new Defense Minister and first female defense chief. Koike said Abe asked her to move forward steadfastly with the realignment of U.S. Marine Corps air station in Okinawa Prefecture and transferring 8,000 Marines to Guam. She told reporters "there is not a second to be wasted, and I will devote myself to my duty seriously."

Summer is a time for vacations and family time. It is also an important time for companies and marketers to prepare plans and budgets for 2008. We look forward to assisting you with new ideas and opportunities to reach the Japanese market. E-mail or a call me if you'd like our team to help prepare your marketing and media plans.

Warmest regards,
Dave Erdman
derdman@pacrimmarketing.com

*Japan Market News
-----Travel: Hawaii needs upgrades to woo visitors
-----Travel: Northwest resumes Osaka-Saipan route
-----Travel: Soaps hope to get Japanese hooked on Australia
-----Business: Summer gift-giving luxurious this year
-----Business: Women beat men in online investing
-----Business: Roppongi blossoms into art town
-----Fashion: Samantha Thavasa goes to Madison Avenue
-----Society: A CoolBiz report card
-----Technology: ColorCode revolutionizing mobile marketing
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: HAWAII NEEDS UPGRADES TO WOO VISITORS

Improvements to begin at the gateway first; businesses should also add value for visitors
After nearly two years of declining visitor arrivals from Japan, Hawaii's government officials teamed with travel agencies and industry representatives to offer solutions beyond blaming high fuel prices and Waikiki's limited room inventory. Modernizing Honolulu International Airport will be one of the first tasks-at-hand, with the state committing to a 12-year, $2.3 billion renovation to include upgraded passenger terminals, ticket counters, baggage screening operations, runaways, and infrastructure such as air conditioning, restrooms, elevators, and escalators. The plan also seeks to replace the Wikiwiki Shuttle service with a moving corridor to transport passengers between terminals. Meanwhile, Japanese travel representatives suggested Hawaii's tourism industry prioritize "quality over quantity." In the face of competition with cheaper, closer resort destinations such as China, Macau, and Thailand, Hawaii not only needs to project its "Aloha Spirit," but offer visitors value for their money spent.

(Source: Travel Journal International 6/20/07)
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TRAVEL: NORTHWEST RESUMES OSAKA-SAIPAN ROUTE

Hard work pays off for Marianas officials, as airlines reinstates daily service
Just months after Marianas Visitors Authority expressed grave concerns over double-digit decreases in Japanese arrivals - specifically from the Kansai region -- Northwest Airlines announced it will resume its daily flight between Osaka and Saipan. The 182-passenger Boeing 757 aircraft will depart Osaka (KIX) at 3:00 p.m. The return flight departs Saipan at 4:20 p.m., which a Northwest Airlines marketing representative stressed as a means to create a flexible itinerary for Saipan travelers. The downward trend in Saipan tourism from Japan began in 2005, when JAL pulled out of the Saipan market altogether, citing unprofitability and broader cutbacks to realign its business. A year later, Northwest also suspended its Osaka-Saipan route in the face of severe price competition from other resort destinations. Northern Marianas Governmor Benigno Fital appealed to the airlines to reinstate flights, and MVA persistently lobbied the industry to do the same. Finally in May 2007, Continental Airlines announced the addition of a daily Osaka-Saipan flight for the busy travel season between August 1 and September 3.

(Sources: Travel Vision News 6/11/07; Pacific Magazine 8/31/06)
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TRAVEL: SOAPS HOPE TO GET JAPANESE HOOKED ON AUSTRALIA

Tourism chiefs plan Aussie-based TV drama starring Japanese actors
In a move to curb a slump in Japanese visitors, the Australian government has proposed to produce a soap opera illustrating young Japanese living along the pristine beaches of Queensland. Australian officials are hoping that Japan's obsession with soap operas will help entice more visitors to its shores, if the right plot could pique the interest of Japan's fickle would-be travelers. The Australians are onto something - South Korea's famous soap opera "Winter Sonata" ignited not only the Korea Boom in Japan, but a fury of interest in Korean culture and travel. And more recently, Australia's own soap opera "Neighbours" has been widely credited with boosting British visitor numbers to Australia. Japanese tourism is worth $1.68 billion to the Australian economy each year, with 624,000 visitors annually. Last year's arrivals fell 7.6 percent, while last month numbers slipped by 21 percent. While a strong Australian currency is likely to blame, Australia - much like Hawaii and Guam -- is fighting competition from closer and cheaper resorts in China, Bali, and Vietnam. Japanese starlet Yoshino Kimura has already been signed on as a lead character, while scripts and sets are in production. Locations are expected to include some of Australia's most iconic landmarks, such as the Sydney Opera House and the Great Barrier Reef. But producers are also hoping to highlight lesser known sights such as Great Ocean Road on Australia's west coast, and the Healesville Sanctuary.

(Source: BBC News 6/25/07)
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BUSINESS: SUMMER GIFT-GIVING LUXURIOUS THIS YEAR

Spa packages and tea ceremonies among lavish gift lists at department stores
"Ochugen," or mid-summer gifts given to superiors and acquaintances, have traditionally been summer-themed - such as beer, noodles, and sweets - or practical - such as detergent, soap, salad dressing, and other household staples. But adult children and acquaintances of baby-boomer retirees are buying out-of-the-ordinary gifts as tokens of gratitude for years of hard work both at home and at work. Takashimaya department stores is offering three-day packages to Kyoto and hot spring hot-spot Izu Peninsula, ranging in price between 550,000 yen (approx. $4,450) and 700,000 yen ($5,670), including helicopter or chauffeured car transport. Mitsukoshi stores are offering affordable spa packages, with overnight stays at hot springs for as low as 50,525 yen ($410) for two people. Isetan Stores' tea ceremony gift goes for 252,000 yen ($2,040), and is marketed as a grand "retirement and ochugen" gift-in-one. Even consumable ochugen gifts are outlandish this year, such as the 52,500 yen ($425) bottle of premium soy sauce, sold at Seibu stores. But does the average citizen spend this much every year on gifts for their bosses and parents? Hardly, says foodmaker Ajinomoto Inc., which survey of 300 homemakers showed the typical budget for ochugen gifts this year is a modest 18,946 yen ($153), up 10 percent from last year.

(Source: yomiuri.co.jp 6/26/07)
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Business: WOMEN BEAT MEN IN ONLINE INVESTING

Female investors on the rise, in both numbers and returns
Although web-trading has weakened in recent months due to Japan's stagnant equities market, the sharp rise in returns among female investors has set a trend for 2007. According to a survey of 1,000 retail investors by Japanese online brokerage Joinvest Securities, women earned an average of 504,000 yen (approx. $4,080) from Web-based trading in the last calendar year, compared to 180,000 yen ($1,458) earned on average by men. Joinvest says women make up roughly 25 percent of the total investors pool, up from less than 20 percent a couple of years ago.

(Source: Reuters Japan 6/21/07)
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BUSINESS: ROPPONGI BLOSSOMS INTO ART TOWN

Small galleries emerge in the footsteps of Tokyo Midtown's art-centric development
Tokyo Midtown, the city's newest urban compound in its fashionable Roppongi district, has been credited with igniting a new wave of interest in everything artistic. Not only are the grounds scattered with sculptures and objects d'arts, but Midtown's Suntory Museum of Art is part of what is now known as the "Art Triangle" in Roppongi, anchored by the brand new Mori Art Museum at Roppongi Hills, and The National Center of Arts, which opened half a mile away this January. Midtown's art movement is also spawning the growth of small galleries and exhibits in the surrounding neighborhood. One of the newest openings is the Cool Train Gallery, an art exhibit by day and swanky jazz bar by night. The Calm & Punk Gallery, which also opened nearby Midtown, features live dance shows, artist demonstrations, as well as performance arts workshops. Modern art abounds, but traditional Japanese art still rules - and draws plenty of international attention - at the "Unac Salon," a mini-gallery tucked away in a Roppongi apartment suite. Unac features works and books by famed calligrapher Yuichi Inoue.

(Source: Nikkei Trendy 06/07)
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FASHION: SAMANTHA THAVASA GOES TO MADISON AVENUE

Hilton sisters, Sarah Jessica Parker help push Japanese brand into fashion spotlight
Ten years ago, back when Samantha Thavasa was an unknown name for a line of quirky, but well-made handbags, the Hilton sisters snatched them up at Thavasa's New York showroom. Hollywood's fascination with the Japanese brand (albeit with a Western name) soon followed, and Thavasa bags became highly popularized by celebrities such as Victoria Beckham, Beyonce, Maria Sharapova, Penelope Cruz, and most recently Sarah Jessica Parker. The company also sponsored the Miss Universe contest, receiving a boost when Japan's Riyo Mori was crowned Miss Universe last month. Samantha Thavasa founder Kazumasa Terada opened his flagship store at the glamorous Roppongi Hills in 2005, and opened his first overseas outlet on Madison Avenue in 2006. Although handbag brands abound in Japan, Samantha Thavasa sets itself apart from both Japanese and foreign brands by sheer variety - about 250 designs are released each year - and a fierce dedication to quality and craftsmanship; Terada, who worked for a trading company and later ran an import business for bags and clothes, chose to manufacture Thavasa bags in Japan. Now a bonafide start-up listed on the Tokyo Stock Exchange, Samantha Thavasa sales and pretax profit more than tripled in the five years through 2006, generating 17.3 billion yen (approx. $140 million) in sales.

(Source: The Japan Times 6/23/07)
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SOCIETY: A COOL BIZ REPORT CARD

Coolbiz attire may tip the scale soon as businessmen give initiative a thumbs-up
Two years since the launch of ex-Prime Minister Junichiro Koizumi's highly publicized dress-down initiative, how is CoolBiz doing? Not too bad, according to a survey of over 1,000 Japanese businessmen, which showed a near majority (45 percent) have adapted to CoolBiz attire. Another 20 percent of those surveyed said their employer allowed casual attire even before CoolBiz, leaving just 35 percent in good-old suits. Those who went CoolBiz casual have cited comfort as the best outcome of the switch, but 60 percent have also said they keep a necktie handy just in case a business setting calls for more professional attire. And did dressing down really help Japan's businesses fight global warming? A resounding "Yes!" according to Japan's Ministry of Environment, which survey showed 43.2 percent of companies and businesses complied with the CoolBiz campaign's call to raise their air conditioning thermostat by at least one degree (Celsius), resulting in a reduction of approximately 1.14 million tons in carbon dioxide emissions.

(Source: research.goo.ne.jp 06/19/07; www.team-6p.jp 11/13/06)
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TECHONOLOGY: COLORCODE REVOLUTIONIZING MOBILE MARKETING

Camera phones link consumers to direct marketing content, bypassing browser
If you've recently seen Japanese magazines or TV, you may have witnessed ColorCode -- very possibly the latest and most significant advance in media marketing -- displayed by little square symbols containing random patterns of red, green, blue, and yellow. ColorCode, a successor of the age-old barcode system, is becoming the critical link between analog and digital media in Japan and Korea, where camera phones can scan a two-dimensional code on any TV or print media, and link the user to pertinent data. For example, a TV network's ColorCode can be scanned by any CCD or CMOS-enabled camera phone from over five meters away, which then links the user to direct content, whether it be a web site, a video, music, photo, or more links. ColorCodes have already appeared on numerous TV networks (all of which are scrambling to align their web content to accommodate ColorCode users), print ads, magazines, billboards, product packages, and more. Nippon Travel Agency incorporated CC in its pamphlets, allowing users to scan the CC and download the company's theme song, and get more information on current promotions. Other companies, such as San-Ai swimwear, used CC for a promotional campaign, offering discounts to consumers who downloaded their CC in its billboard ads. Invented at Yonsei University in South Korea in 2000, ColorCode is licensed by ColorZip Japan Inc.

(Source: "Outbound Travel Trends" 5/07; colorzip.co.jp)
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TECHNOLOGY: CELL PHONE USERS CONFESS TO MEMORY LAG

One-fifth of users can't remember their own cell phone number
Cell phone users rely on their gadget's memory so much that they can no longer remember important numbers, according to a survey by telecom giant NTT Group. About 400 men and women in their teens to 60s were polled for the survey, a whopping 80.5 percent of whom agreed their ability to remember phone numbers has declined in the last few years. Among single women, less than 10 percent recalled their own boyfriend's phone number. Married women, however, ranked higher on the memory scale, with 50 percent knowing their husband's cell phone number. One theory is that married women call their spouses more often from home, and therefore learn to memorize the number. The report concluded that cell phones have become indispensable data storage tools, as well as a means to connect people anywhere and everywhere. The downside to that reliance, however, is that unexpected data loss wreaks havoc (attested by 72 percent of those polled), thus creating a bigger disconnect with those whose numbers could not be recovered - or remembered.

(Source: japan.internet.com 6/28/07)
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Iyashi Kyara:

The word "Iyashi" roughly translates to healing or soothing. "Kyara" is the contraction of the word "Kyarakuta", meaning character, most famously portrayed by the universally known Hello Kitty. Together, "Iyashi Kyara" is a buzzword that refers to characters that are not only cute - they reduce stress and help you relax. People today lead busy lives and are drawn to objects that reduce stress and help them maintain a healthy state of mind. "Iyashi kyara" have been a hit among schoolgirls, schoolboys, young women, and young men because of their cute and comfortable designs. The characters are used on stationery, turned into stuffed animals, and found in picture books, video games, and other goods. The stress relieving properties arise from two features- 1. The characters look soft and squishy with no skeletal frame, and 2. Their names connote relaxation. This popular movement started back in 1997 when "TarePanda" (tare means to hang or droop) became a hit with his droopy face and comfortable relaxed posture. Another big hit is "Rilakkuma", comprised of the words "relax" and bear". He is usually seen lounging on a soft yellow pillow, or lying down listening to an mp3 player, eyes closed. SanX has reportedly rung up sales of $500 million in goods featuring "Rilakkuma" since launching in 2003. Many other characters like "Mamegoma", a miniature seal character, Kapibarasan, a rodent creature, and Afroken, a dog with an afro have been a major hit all over Japan. "Iyashi kyara" are normally easygoing and have hobbies and interests. "Rilakkuma" is a bear that takes up residence with Kaoru, a young company employee, while "Kapibarasan" likes hot springs. All "iyashi kyara" have a story behind them, something that sets them apart from other characters.

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Chikyu no Arukikata- Honolulu and Oahu Resort

The Chikyu no Arukikata Globetrotter resort series is made up of individual publications exclusively devoted to featuring each of the main Hawaiian Islands as resort destinations. Turning the focus from a traditional guidebook, the Globetrotter Honolulu and Oahu Resort Guide provides the reader with in-depth information on the uniqueness of the island of Oahu in a highly visual format. It is often used to supplement the Globetrotter Hawaii Guidebook for those planning excursions outside the traditional realm. The series enjoys great support from a wide variety of travelers, from those who want to live like the locals, to those who demand the luxury of resort life in their selection of superior hotels, to the repeat traveler who wants an individualized unique experience. For less than $500 a month, you could be reaching 50,000 Japanese visitors traveling to Honolulu!

Don't let this important opportunity pass you by. If you are interested in finding out more about advertising in this publication please contact Nicole Drumeller at ndrumeller@pacrimmarketing.com

Click here for our Media Request Form or contact us.

Space Deadlines:

7/1 Aloha Express September 2007
7/1 Chikyu no Arukikata Oahu Resort
7/1 Chikyu no Arukikata Maui Resort
8/1 Chikyu no Arukikata Honolulu Mook 2008
8/1 Chikyu no Arukikata Guam Guidebook
9/1 Aloha Express Yearbook

Material Deadlines:

NOW! Aloha Express September 2007
7/1 Nouveau Guam
8/1 Chikyu no Arukikata Oahu Resort
8/1 Chikyu no Arukikata Maui Resort
9/1 Honolulu Mook 2008
9/1 Globetrotter Guam Guidebook
9/10 Aloha Express Yearbook

It is not too late to call us (808-949-4592 or Toll Free 1-800-338-4502) to find out more about these upcoming media releases as we strive to find the best media available for you.

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Upcoming Holidays in Japan

07/07 Tanabata- Star Festival
07/16 Umi no Hi- Marine Day
08/13-8/16 Obon Season
09/17 Keiro no Hi- Respect fot eh Elderly Day
09/23 Shuubun no Hi- Autumnal Equinox Day (observed)
09/24 Shuubun no Hi- Autumnal Equinox Day (actual)

Click here to see all Japanese holidays for 2007.
Click here to see all US holidays for 2007.

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