Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<ul>
<li>With nominal GDP growing 6%YoY in the latest 3 quarters, Japanese interest rates will be gradually normalized. The JPY rebound, however, precludes the need for rapid BoJ hikes. </li>
<li>Unwinding of Yen carry-trades should take JPY to ¥125/US$ by end-2024, which will contribute to tightening monetary conditions sufficiently, further slowing inflation (from 2.85%YoY in May-Jun'24). </li>
<li>Appreciating JPY is bad for Japanese equities, so stay Underweight, with a defensive portfolio comprising utilities, pharmaceuticals and consumer staples. </li>
</ul>


With nominal GDP growing 6%YoY in the latest 3 quarters, Japanese interest rates will be gradually normalized. The JPY rebound, however, precludes the need for rapid BoJ hikes. 
Unwinding of Yen carry-trades should take JPY to ¥125/US$ by end-2024, which will contribute to tightening monetary conditions sufficiently, further slowing inflation (from 2.85%YoY in May-Jun'24). 
Appreciating JPY is bad for Japanese equities, so stay Underweight, with a defensive portfolio comprising utilities, pharmaceuticals and consumer staples. 


Japan: Normalizing Interest Rates as Nominal GDP Surges, Ending Deflation Era

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. 

Thematic (Sector/Industry)

<ul>
<li>Japan's drugstore sector is in the midst of consolidation through organic expansion and M&amp;A but who are the leaders and how do they compare?</li>
<li>We provide snapshot profiles on each of the key players, their current strategies and future outlook.</li>
<li>With the sector increasingly threatening the supermarket and convenience store sectors, many of these names will come to dominate Japanese retailing in the next decade.</li>
</ul>


Japan's drugstore sector is in the midst of consolidation through organic expansion and M&amp;A but who are the leaders and how do they compare?
We provide snapshot profiles on each of the key players, their current strategies and future outlook.
With the sector increasingly threatening the supermarket and convenience store sectors, many of these names will come to dominate Japanese retailing in the next decade.


<ul>
<li>The big merger between Welcia and Tsuruha is part of a wider concentration of market share in the drugstore sector as the leaders take on supermarkets and even convenience stores.</li>
<li>Japan's drugstores have morphed into multiple sub-formats, selling food and other FMCG products in ever higher ratios, creating massive pressure for other sectors. </li>
<li>The net effect is the emergence of a powerful new retail sector that is impacting all other FMCG retail formats and even lifestyle categories like cosmetics.</li>
</ul>


The big merger between Welcia and Tsuruha is part of a wider concentration of market share in the drugstore sector as the leaders take on supermarkets and even convenience stores.
Japan's drugstores have morphed into multiple sub-formats, selling food and other FMCG products in ever higher ratios, creating massive pressure for other sectors. 
The net effect is the emergence of a powerful new retail sector that is impacting all other FMCG retail formats and even lifestyle categories like cosmetics.


Japan Drugstores: More M&A as Sector Attacks Supermarkets and Conbini

<ul>
<li>The clothing sections of GMS chains and supermarkets have declined so far in relevance that most assume the format will disappear entirely. </li>
<li>But new efforts by Aeon, as well as collaborations by the likes of Ito-Yokado, could lead to a new lease of life and higher margins.</li>
<li>This may impact on retailers like Shimamura but the more likely result will be new opportunities to takeover supermarket apparel floors as Adastria is doing already.</li>
</ul>


The clothing sections of GMS chains and supermarkets have declined so far in relevance that most assume the format will disappear entirely. 
But new efforts by Aeon, as well as collaborations by the likes of Ito-Yokado, could lead to a new lease of life and higher margins.
This may impact on retailers like Shimamura but the more likely result will be new opportunities to takeover supermarket apparel floors as Adastria is doing already.


<ul>
<li>The three big convenience store chains all posted record financial results for FY2023. </li>
<li>The format’s limitations were exposed by the pandemic, providing a catalyst for some major changes and prompting new and innovative marketing and support services.</li>
<li>These have made the sector more robust, but whether this new surge of growth will continue in 2024 will depend on how concerned customers are with higher prices.</li>
</ul>


The three big convenience store chains all posted record financial results for FY2023. 
The format’s limitations were exposed by the pandemic, providing a catalyst for some major changes and prompting new and innovative marketing and support services.
These have made the sector more robust, but whether this new surge of growth will continue in 2024 will depend on how concerned customers are with higher prices.


Japan

Seven & i Holdings Co., Ltd. is a holding company which was established through the merger of Ito-Yokado Co., Seven Eleven Japan Co., and Denny's Japan. The Company plans, manages, and operates mainly convenience stores, supermarkets, and department stores.

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Seven & I Holdings (3382 JP)

Japan: Normalizing Interest Rates as Nominal GDP Surges, Ending Deflation Era

Japanese interest rates are set to normalize amid robust nominal GDP. But a rebounding JPY (at ¥125/US$ by end'24) precludes further BoJ hikes,...

Prasenjit K. Basu

Leaders of Japan's Drugstore Sector

Japan's drugstore sector is consolidating through organic growth and M&A, with key players poised to dominate retailing in the next decade. But...

Michael Causton

Japan Drugstores: More M&A as Sector Attacks Supermarkets and Conbini

The merger of Welcia and Tsuruha reflects market consolidation in Japan's drugstore sector, with major attacks on supermarkets and even conbinis....

Michael Causton

A Supermarket Clothing Revival in Japan?

GMS chains and supermarkets are reviving their clothing sections, potentially creating new opportunities for higher margins at GMS operations.

Michael Causton

Stellar Year for Conbini Chains

Convenience store chains saw record results in FY2023, with pandemic-driven changes prompting innovation and growth, but future success may hinge...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan: Normalizing Interest Rates as Nominal GDP Surges, Ending Deflation Era

​Japanese interest rates are set to normalize amid robust nominal GDP. But a rebounding JPY (at ¥125/US$ by end'24) precludes further BoJ hikes,...

Prasenjit K. Basu

Leaders of Japan's Drugstore Sector

​Japan's drugstore sector is consolidating through organic growth and M&A, with key players poised to dominate retailing in the next decade. But...

Michael Causton

Japan Drugstores: More M&A as Sector Attacks Supermarkets and Conbini

​The merger of Welcia and Tsuruha reflects market consolidation in Japan's drugstore sector, with major attacks on supermarkets and even conbinis....

Michael Causton

A Supermarket Clothing Revival in Japan?

​GMS chains and supermarkets are reviving their clothing sections, potentially creating new opportunities for higher margins at GMS operations.

Michael Causton

Stellar Year for Conbini Chains

​Convenience store chains saw record results in FY2023, with pandemic-driven changes prompting innovation and growth, but future success may hinge...

Michael Causton

Japanese interest rates are set to normalize amid robust nominal GDP. But a rebounding JPY (at ¥125/US$ by end'24) precludes further BoJ hikes,...

Japan's drugstore sector is consolidating through organic growth and M&A, with key players poised to dominate retailing in the next decade. But...

The merger of Welcia and Tsuruha reflects market consolidation in Japan's drugstore sector, with major attacks on supermarkets and even conbinis....

GMS chains and supermarkets are reviving their clothing sections, potentially creating new opportunities for higher margins at GMS operations.

Convenience store chains saw record results in FY2023, with pandemic-driven changes prompting innovation and growth, but future success may hinge...