'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<p style="text-align: center;"><strong>• COVID UPDATE •</strong></p><p style="text-align: left;">Nationwide, there were 5,943 new cases yesterday. This is a new record and an increase of more than 1,000 from Tuesday, the previous record. In Tokyo, there were 1,591 new cases - another daily record. PM Suga has all but stated that a new State of Emergency would begin later today - January 7th. The government appears to want to limit the State of Emergency to approximately one month. Several academics and doctors are increasingly vocal that at least two months is necessary.</p><p>According to Kyodo, the negative economic impact of a one-month State of Emergency in Tokyo and its surrounding prefectures ranges from $39 to $47.5 billion. If a nationwide State of Emergency were enacted, the estimated negative impact would be $135 billion per month or 2.53 percentage points of annual GDP. Unusually for Japan, companies that would be negatively impacted are becoming very vocal in their opposition to new restrictions. Meanwhile, the equity market reached a new five-year high in US dollar terms.</p><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p><p style="text-align: left;">Wednesday's 'best' and 'worst' pairing among larger-cap stocks is <a href="https://www.smartkarma.com/entities/bell-system24-holdings-inc" target="_blank" data-smartkarma-citation="entities:27224:1" rel="noopener">BellSystem24 (6183 JP)</a> and <a href="https://www.smartkarma.com/entities/arcs-co-ltd" target="_blank" data-smartkarma-citation="entities:7580:1" rel="noopener">Arcs (9948 JP)</a> although the latter is of interest on the long 'side' in a new State of Emergency.</p><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/196/original/2021-01-07_06-46-39.png?1609969610" class="editor-image img-responsive" data-smartkarma-image-id="181196"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/197/original/2021-01-07_06-49-24.png?1609969777" class="editor-image img-responsive" data-smartkarma-image-id="181197"></figure></section></section><div style="text-align: center;" class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>

• COVID UPDATE •Nationwide, there were 5,943 new cases yesterday. This is a new record and an increase of more than 1,000 from Tuesday, the previous record. In Tokyo, there were 1,591 new cases - another daily record. PM Suga has all but stated that a new State of Emergency would begin later today - January 7th. The government appears to want to limit the State of Emergency to approximately one month. Several academics and doctors are increasingly vocal that at least two months is necessary.According to Kyodo, the negative economic impact of a one-month State of Emergency in Tokyo and its surrounding prefectures ranges from $39 to $47.5 billion. If a nationwide State of Emergency were enacted, the estimated negative impact would be $135 billion per month or 2.53 percentage points of annual GDP. Unusually for Japan, companies that would be negatively impacted are becoming very vocal in their opposition to new restrictions. Meanwhile, the equity market reached a new five-year high in US dollar terms.• BEST &amp; WORST •Wednesday's 'best' and 'worst' pairing among larger-cap stocks is BellSystem24 (6183 JP) and Arcs (9948 JP) although the latter is of interest on the long 'side' in a new State of Emergency.Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​06 - Bellsystem24 & ARCS

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

<p>At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.</p>
<p>Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.</p>
<p>Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.</p>
<p>The following is an in-depth review of Japan's retail sector, providing:</p>
<ul>
<li>An overview of consumer demand and retail performance</li>
<li>Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.</li>
<li>Rankings:
<ul>
<li>Market share and size by sector/format</li>
<li>By sales for all retailers with sales over ¥250 billion</li>
<li>By gross and operating margins, split by format and category.</li>
</ul>
</li>
</ul>
<p>As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. <a href="https://www.smartkarma.com/insights/the-japan-retail-review-winners-and-losers-in-japanese-retailing-part-i" target="_blank" rel="noopener">Part I, which provides a quick overview of all retailing, can be read here</a>.</p>

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.
Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.
Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.
The following is an in-depth review of Japan's retail sector, providing:

An overview of consumer demand and retail performance
Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.
Rankings:

Market share and size by sector/format
By sales for all retailers with sales over ¥250 billion
By gross and operating margins, split by format and category.



As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. Part I, which provides a quick overview of all retailing, can be read here.

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/315/original/2020-07-05_13-49-05.png?1593924588" class="editor-image img-responsive" data-smartkarma-image-id="144315"></figure><div class="content-caption">Source • Japan Analytics</div>
<p><strong>PROFITS TIMELINE</strong> - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net Income is now below the trough of the previous cycle, and the trailing number should follow soon. Supported by the Bank of Japan, aggregate market capitalisation is above that of the early 2019 profit peak. As a result, earnings multiples are at the upper end of the five-year range, although there is evidence of some resistance at these levels.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/329/original/2020-07-05_15-13-29.png?1593929621" class="editor-image img-responsive" data-smartkarma-image-id="144329"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/331/original/2020-07-05_15-17-50.png?1593929930" class="editor-image img-responsive" data-smartkarma-image-id="144331"></figure><div class="content-caption">Source • Japan Analytics</div>
<p><strong>RESULTS &amp; REVISION SCORES</strong> - Our Scoring methodology tells the same 'story'. We are one to two quarters away from the bottom of this earnings cycle - a bottom that is likely to match that of 2009. Whether a 10% decline in market value from pre-COVID-19 levels is sufficient 'recognition' of the temporary, and in some cases, permanent, impairment of the earnings generation capability and momentum remains to be seen. We suspect the coming 'next wave' of downward revisions, as shown by Friday's one positive to nine negative ratio, will limit any upside over the summer months. </p>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><strong>19 Quarterly Results</strong></p></div><div>
<ul>
<li>
<strong>Results Score:</strong> 7 Positive / 2 Neutral / 10 Negative</li>
<li>
<strong>Average Results Score Change</strong>:-2.0</li>
<li>
<strong>Average % Change in Revenue: </strong>-7.8% Quarter YoY* / +3.1% Rolling TTM YoY</li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -0.4ppt</li>
</ul>
<div class="content-remarks"><p>* Excluding Kasumigaseki Capital</p></div>
</div><hr><div><p style="text-align: center;"><br><strong>7 Annual • 3 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 1 Positive / 0 Neutral / 6 Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change:</strong> 0 Positive / 0 Neutral / 3 Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -15.3</li>
</ul></div>


Source • Japan Analytics
PROFITS TIMELINE - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net Income is now below the trough of the previous cycle, and the trailing number should follow soon. Supported by the Bank of Japan, aggregate market capitalisation is above that of the early 2019 profit peak. As a result, earnings multiples are at the upper end of the five-year range, although there is evidence of some resistance at these levels.
Source • Japan Analytics
RESULTS &amp; REVISION SCORES - Our Scoring methodology tells the same 'story'. We are one to two quarters away from the bottom of this earnings cycle - a bottom that is likely to match that of 2009. Whether a 10% decline in market value from pre-COVID-19 levels is sufficient 'recognition' of the temporary, and in some cases, permanent, impairment of the earnings generation capability and momentum remains to be seen. We suspect the coming 'next wave' of downward revisions, as shown by Friday's one positive to nine negative ratio, will limit any upside over the summer months. 
DAILY STATS
19 Quarterly Results


Results Score: 7 Positive / 2 Neutral / 10 Negative

Average Results Score Change:-2.0

Average % Change in Revenue: -7.8% Quarter YoY* / +3.1% Rolling TTM YoY

Average Operating Profit Margin Change: -0.4ppt

* Excluding Kasumigaseki Capital
 7 Annual • 3 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 1 Positive / 0 Neutral / 6 Negative

Interim Forecast/Revision Score Change: 0 Positive / 0 Neutral / 3 Negative

Average Forecast/Revision Score Change: -15.3


🇯🇵 JAPAN • Results & Revisions 3rd July • The Next Wave

<p>No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.</p><p>What is certain is that the Japanese consumer economy will recover and it is just a question of when.</p><p>The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be <strong>one of the most dramatic and far-reaching seen so far in retail.</strong></p><p><strong>But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.</strong></p><p>The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into <strong>which sectors, formats and specific companies will win and lose in the next three years</strong>.</p><p><strong>For a short read, we provide the conclusions and winners and losers first.</strong></p>

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.What is certain is that the Japanese consumer economy will recover and it is just a question of when.The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be one of the most dramatic and far-reaching seen so far in retail.But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into which sectors, formats and specific companies will win and lose in the next three years.For a short read, we provide the conclusions and winners and losers first.

After Covid: The Future for Japanese Retail: Winners & Losers

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/454/original/2020-04-18_16-16-49.png?1587194226" class="editor-image img-responsive" data-smartkarma-image-id="128454"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>MARKING TIME</strong> - Japanse equities were becalmed last week, rising by 0.84%, while the Yen traded at 107 all week. The Bank of Japan bought ETFs on Wednesday and Thursday despite the relative calm and are on a path for April to equal the total purchases made in March. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/455/original/2020-04-18_17-43-44.png?1587199447" class="editor-image img-responsive" data-smartkarma-image-id="128455"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>MARKING MULTIPLES</strong> - As we have been covering in our daily Results &amp; Revisions updates, forward earnings continue to decline gradually. As previously noted, the market multiple will rise over the next month as full-year forecasts for FY2021 are announced to at least the early 2020 peak of 17.6 times. This adjustment process will be complicated by a lack of initial forecasts from many leading companies and by a delay in the publication of annual <em>yuho</em> audited financial statements until the late summer. 'Robust' analysis will be at a premium.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/651/original/File%202020-04-20%204%2023%2024.jpeg?1587324271" class="editor-image img-responsive" data-smartkarma-image-id="128651"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/652/original/File%202020-04-20%204%2024%2019.jpeg?1587324282" class="editor-image img-responsive" data-smartkarma-image-id="128652"></figure><p></p><div class="content-caption">Source • ourworldindata.org</div><p><strong>COVID CASE COUNT</strong> - Japan's COVID-19 daily case-count has trended down this week compared to the weel before and is now on a par with Sweden and Singapore. Daily fatalities are averaging double figures as this lagging statistics reflects the higher case count of two weeks ago and are still within the East Asian 'range' of 0-10 a day. New case counts of below 100 and a declining trend, as is the case in South Korea, Denmark and Austria will be required by the end of Golden Week on May 6th for Japan to consider any relaxation of its now nationwide 'state of emergency'. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/558/original/File%202020-04-19%2016%2028%2027.jpeg?1587281926" class="editor-image img-responsive" data-smartkarma-image-id="128558"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/559/original/File%202020-04-19%2016%2023%2014.jpeg?1587281952" class="editor-image img-responsive" data-smartkarma-image-id="128559"></figure><div class="content-caption">Source • ourworldindata.org</div><p><strong>JAPAN'S TESTING VACUUM</strong> - We have noted the lack of testing in Japan in an earlier <a href="https://www.smartkarma.com/insights/japan-market-update-hit-the-boj-bid-and-wait-for-the-absolute-value-opportunity" target="_blank" data-smartkarma-citation="insights:37670" rel="noopener">Insight</a> and the two charts above from Oxford's Global Change Data Lab highlights Japan's outlier status in this regard and the implications for confirmed case counts and confirmed deaths. This deficiency has led many data scientists to study excess mortality rates. At present, there is insufficient data from the Health Ministry in Japan to make any valid comparisons. Based on other countries, Japan's excess mortality will likely price to be slightly higher for the over 65s and lower for everyone else. In any case, a massive testing capability will form a key component of any viable exit strategy.     </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/479/original/File%202020-04-19%206%2024%2053.jpeg?1587245112" class="editor-image img-responsive" data-smartkarma-image-id="128479"></figure><div class="content-caption">Source • stopcovid19.jp</div><p><strong>OVERSHOOT</strong> - Unfortunately for patients and the government, hospitals are now full in many prefectures. Central Tokyo hospitals are turning away patients requiring ambulances to take patients to outlying parts of the prefecture - although this situation is not unusual in normal times. Despite ample time to prepare, the government has failed to provide for the 'overshoot' that they had been warning the public it was necessary to avoid. Japan also has a lower ratio of intensive care beds, (5) per 100,000 people, than many other developed countries. The previous policy of hospitalising every case, however mild, has been reversed and local governments have now requisitioned 210,000 hotel rooms to house those not in need of urgent medical intervention. While Japan's COVID-19 strategy has, so far, followed the less economically-damaging Swedish model (see below), a failure to address the hospital overshoot risks the country being forced to follow the UK's 'u-turn' into total lockdown from which exit strategies are much harder. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/650/original/2020-04-20_04-02-00.png?1587322973" class="editor-image img-responsive" data-smartkarma-image-id="128650"></figure><div class="content-caption">Source • Tokyo Metropolitan Government</div><p><strong>PEAKING OUT?</strong> On Sunday, Tokyo only 107 new cases, the lowest Sunday total for three weeks and the first decline. Tokyo now has over 3,000 cases out of a population of almost 14 million. The rate of doubling is now decelerating from one week to two weeks. Meanwhile, transit through major railway stations has declined by 70-80% across Japan. A lowering of new cases next week will be crucial to keep the hospitals from overflowing and the Prime Minister's reputation from falling further.</p><p><strong>FALLOUT</strong> - PM Abe's political capital is another casualty of this disease. It has emerged that his coalition partner the lay-Buddhist Komeito party threatened to walk out if the cash-for-all policy was not implemented requiring Abe to amend a previously-agreed budget bill much to the fury of the Ministry of Finance. The latter was able to require an application process as a means of limiting the amounts dispersed. However, in a bow to the changing circumstance, this process can be conducted online without, it seems, the need for in-person <em>hanko</em> certification. An additional complication is that Abe has 'fallen out' with his main bureaucratic 'fixer' and the main conduit with Komeito, Chief Cabinet Secretary Suga. Abe's poll ratings will probably never recover, and only his long-cherished desire to open the Tokyo Olympics in July 20121 will keep him in office. As will be true in many countries, the COVID-19 policy post mortems will be brutal and fatal for many previously Teflon-like political careers.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/486/original/File%202020-04-18%2013%2054%2022.jpeg?1587246944" class="editor-image img-responsive" data-smartkarma-image-id="128486"></figure><div class="content-caption">Source • Agoop</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/488/original/File%202020-04-18%2013%2053%2001.jpeg?1587247186" class="editor-image img-responsive" data-smartkarma-image-id="128488"></figure><div class="content-caption">Source • @shinagawajp &gt; Blue bars = COVID-19 cases by Tokyo Ward   Orange Line = Concentration of people at 11 pm</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/490/original/File%202020-04-18%2014%2000%2004.jpeg?1587247628" class="editor-image img-responsive" data-smartkarma-image-id="128490"></figure><div class="content-caption">Source • @shinagawajp &gt; Blue bars = COVID-19 cases by Tokyo Ward  Red Line = Population earning more than ¥15m a year</div><p><strong>HOTSPOTS &amp; FAT CATS</strong> - Some support for the government's policy of shutting down Tokyo's nightlife comes from data which correlates case count per Tokyo ward and population clusters in each area at 11 pm.  The correlation is much higher than both population levels and public transport transit through each ward. The second highest correlation was with income levels, suggesting that Tokyo' rich have a greater tendency to frequent bars, restaurants and other forms of evening entertainment, while no doubt considering themselves immune. This correlation has been anecdotally confirmed by the growing number of figures from the media and entertainment world who have contracted the disease and bears out the Tokyo Metropolitan Government's focus on avoiding the 3 'C's - <strong>C</strong>ongregations <strong>C</strong>onversing in <strong>C</strong>onfined spaces. The plug has been pulled on Tokyo's '<em>mizushobai'</em> or 'water trade'.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/663/original/File%202020-04-20%205%2020%2010.jpeg?1587327650" class="editor-image img-responsive" data-smartkarma-image-id="128663"></figure><div class="content-caption">Source • Johns Hopkins CSSE</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/478/original/2020-04-19_06-16-22.png?1587244624" class="editor-image img-responsive" data-smartkarma-image-id="128478"></figure><div class="content-caption">Source • LockdownTV</div><p><strong>PROF GIESECKE &amp; THE SWEDISH MODEL</strong> - Lastly, this <a href="https://youtu.be/bfN2JWifLCY" target="_blank" rel="noopener">video</a> of an interview with retired Swedish epidemiologist, Professor Johan Giesecke, provides an update on the policy options that governments have faced in their responses to COVID-19, the background to Sweden's policy and the difficulties of exiting from lockdown strategies. A summary of his talk is as follows:-</p><blockquote>
<p>Lockdown policies are not evidence-based</p>
<p>The correct policy is to protect the old and the frail only - this will eventually lead to herd immunity as a by-product - the initial UK response, which was similar to Sweden's was better  - before they made a 180 degree U-turn</p>
<p>The UK's Imperial College paper was not very good and he has never seen an unpublished paper have so much policy impact - the paper was  too pessimistic and any such models are a dubious basis for public policy</p>
<p>The flattening of the curve is due to the most vulnerable dying first as much as the lockdown policy</p>
<p>The outcomes will eventually be similar for all countries regardless of policy pursued</p>
<p>Covid-19 is a mild disease similar to the flu, and it was the novelty of the disease that scared people - the fatality rate of Covid-19 is the region of 0.1%</p>
<p>At least 50% of the population will be shown to have already had the disease when mass antibody testing becomes available - achieving 'herd immunity'</p>
</blockquote><p>In the <strong>DETAIL </strong>below, we shall explore some of the emerging themes for the post-COVID-19 world, review the results, revisions and initial forecast announcements made on Friday and, finally, look at our lists the Moving Average 'Outliers'.  The positive/neutral/negative balance for Friday's three results announcements was 1:0:2. For the 20 revisions/forecasts, the split was 7:1:12 - although two of the positive outcomes were securities brokers making initial 'forecasts' of a year-on-year return to profitability after the full-year results have been finalised. Peer Groups revising down included <strong>Advertising Services</strong>, <strong>Apparel &amp; Footwear</strong>, <strong>Retail-Apparel &amp; Footwear</strong>, <strong>Hotels &amp; Resorts</strong>, <strong>Employment &amp; Staffing</strong>, and<strong> Restaurants</strong>. Upward revisions were seen in<strong> Retail-Food &amp; Drink</strong>, <strong>Personal Products</strong>, and<strong> Public Relations</strong>.</p>

Source • Japan AnalyticsMARKING TIME - Japanse equities were becalmed last week, rising by 0.84%, while the Yen traded at 107 all week. The Bank of Japan bought ETFs on Wednesday and Thursday despite the relative calm and are on a path for April to equal the total purchases made in March. Source • Japan AnalyticsMARKING MULTIPLES - As we have been covering in our daily Results &amp; Revisions updates, forward earnings continue to decline gradually. As previously noted, the market multiple will rise over the next month as full-year forecasts for FY2021 are announced to at least the early 2020 peak of 17.6 times. This adjustment process will be complicated by a lack of initial forecasts from many leading companies and by a delay in the publication of annual yuho audited financial statements until the late summer. 'Robust' analysis will be at a premium.Source • ourworldindata.orgCOVID CASE COUNT - Japan's COVID-19 daily case-count has trended down this week compared to the weel before and is now on a par with Sweden and Singapore. Daily fatalities are averaging double figures as this lagging statistics reflects the higher case count of two weeks ago and are still within the East Asian 'range' of 0-10 a day. New case counts of below 100 and a declining trend, as is the case in South Korea, Denmark and Austria will be required by the end of Golden Week on May 6th for Japan to consider any relaxation of its now nationwide 'state of emergency'. Source • ourworldindata.orgJAPAN'S TESTING VACUUM - We have noted the lack of testing in Japan in an earlier Insight and the two charts above from Oxford's Global Change Data Lab highlights Japan's outlier status in this regard and the implications for confirmed case counts and confirmed deaths. This deficiency has led many data scientists to study excess mortality rates. At present, there is insufficient data from the Health Ministry in Japan to make any valid comparisons. Based on other countries, Japan's excess mortality will likely price to be slightly higher for the over 65s and lower for everyone else. In any case, a massive testing capability will form a key component of any viable exit strategy.     Source • stopcovid19.jpOVERSHOOT - Unfortunately for patients and the government, hospitals are now full in many prefectures. Central Tokyo hospitals are turning away patients requiring ambulances to take patients to outlying parts of the prefecture - although this situation is not unusual in normal times. Despite ample time to prepare, the government has failed to provide for the 'overshoot' that they had been warning the public it was necessary to avoid. Japan also has a lower ratio of intensive care beds, (5) per 100,000 people, than many other developed countries. The previous policy of hospitalising every case, however mild, has been reversed and local governments have now requisitioned 210,000 hotel rooms to house those not in need of urgent medical intervention. While Japan's COVID-19 strategy has, so far, followed the less economically-damaging Swedish model (see below), a failure to address the hospital overshoot risks the country being forced to follow the UK's 'u-turn' into total lockdown from which exit strategies are much harder. Source • Tokyo Metropolitan GovernmentPEAKING OUT? On Sunday, Tokyo only 107 new cases, the lowest Sunday total for three weeks and the first decline. Tokyo now has over 3,000 cases out of a population of almost 14 million. The rate of doubling is now decelerating from one week to two weeks. Meanwhile, transit through major railway stations has declined by 70-80% across Japan. A lowering of new cases next week will be crucial to keep the hospitals from overflowing and the Prime Minister's reputation from falling further.FALLOUT - PM Abe's political capital is another casualty of this disease. It has emerged that his coalition partner the lay-Buddhist Komeito party threatened to walk out if the cash-for-all policy was not implemented requiring Abe to amend a previously-agreed budget bill much to the fury of the Ministry of Finance. The latter was able to require an application process as a means of limiting the amounts dispersed. However, in a bow to the changing circumstance, this process can be conducted online without, it seems, the need for in-person hanko certification. An additional complication is that Abe has 'fallen out' with his main bureaucratic 'fixer' and the main conduit with Komeito, Chief Cabinet Secretary Suga. Abe's poll ratings will probably never recover, and only his long-cherished desire to open the Tokyo Olympics in July 20121 will keep him in office. As will be true in many countries, the COVID-19 policy post mortems will be brutal and fatal for many previously Teflon-like political careers.Source • AgoopSource • @shinagawajp &gt; Blue bars = COVID-19 cases by Tokyo Ward   Orange Line = Concentration of people at 11 pmSource • @shinagawajp &gt; Blue bars = COVID-19 cases by Tokyo Ward  Red Line = Population earning more than ¥15m a yearHOTSPOTS &amp; FAT CATS - Some support for the government's policy of shutting down Tokyo's nightlife comes from data which correlates case count per Tokyo ward and population clusters in each area at 11 pm.  The correlation is much higher than both population levels and public transport transit through each ward. The second highest correlation was with income levels, suggesting that Tokyo' rich have a greater tendency to frequent bars, restaurants and other forms of evening entertainment, while no doubt considering themselves immune. This correlation has been anecdotally confirmed by the growing number of figures from the media and entertainment world who have contracted the disease and bears out the Tokyo Metropolitan Government's focus on avoiding the 3 'C's - Congregations Conversing in Confined spaces. The plug has been pulled on Tokyo's 'mizushobai' or 'water trade'.Source • Johns Hopkins CSSESource • LockdownTVPROF GIESECKE &amp; THE SWEDISH MODEL - Lastly, this video of an interview with retired Swedish epidemiologist, Professor Johan Giesecke, provides an update on the policy options that governments have faced in their responses to COVID-19, the background to Sweden's policy and the difficulties of exiting from lockdown strategies. A summary of his talk is as follows:-
Lockdown policies are not evidence-based
The correct policy is to protect the old and the frail only - this will eventually lead to herd immunity as a by-product - the initial UK response, which was similar to Sweden's was better  - before they made a 180 degree U-turn
The UK's Imperial College paper was not very good and he has never seen an unpublished paper have so much policy impact - the paper was  too pessimistic and any such models are a dubious basis for public policy
The flattening of the curve is due to the most vulnerable dying first as much as the lockdown policy
The outcomes will eventually be similar for all countries regardless of policy pursued
Covid-19 is a mild disease similar to the flu, and it was the novelty of the disease that scared people - the fatality rate of Covid-19 is the region of 0.1%
At least 50% of the population will be shown to have already had the disease when mass antibody testing becomes available - achieving 'herd immunity'
In the DETAIL below, we shall explore some of the emerging themes for the post-COVID-19 world, review the results, revisions and initial forecast announcements made on Friday and, finally, look at our lists the Moving Average 'Outliers'.  The positive/neutral/negative balance for Friday's three results announcements was 1:0:2. For the 20 revisions/forecasts, the split was 7:1:12 - although two of the positive outcomes were securities brokers making initial 'forecasts' of a year-on-year return to profitability after the full-year results have been finalised. Peer Groups revising down included Advertising Services, Apparel &amp; Footwear, Retail-Apparel &amp; Footwear, Hotels &amp; Resorts, Employment &amp; Staffing, and Restaurants. Upward revisions were seen in Retail-Food &amp; Drink, Personal Products, and Public Relations.

🇯🇵 JAPAN MARKET (& COVID-19) UPDATE 19th April - Overshoot

Japan

Arcs Co Ltd operates supermarket and discount store chain in the Hokkaido area.  The Company mainly retails foodstuffs, clothing, and sundry goods.

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Arcs Co Ltd (9948 JP)

🇯🇵 JAPAN • Results & Revisions 01/06 - Bellsystem24 & ARCS

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MARKING TIME - Japanse equities were becalmed last week, rising by 0.84%, while the Yen traded at 107 all week. The Bank of Japan bought ETFs on...

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🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​06 - Bellsystem24 & ARCS

• COVID UPDATE • Nationwide, there were 5,943 new cases yesterday. This is a new record and an increase of more than 1,000 from Tuesday, the...

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PROFITS TIMELINE - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net...

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No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are...

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MARKING TIME - Japanse equities were becalmed last week, rising by 0.84%, while the Yen traded at 107 all week. The Bank of Japan bought ETFs on...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 01/06 - Bellsystem24 & ARCS