Investment Office

In addition the Keidanren announced on December 10th through chairman Miterai that Japanese companies with the financials means to do so should hike employee wages.  This is a new development for Keidanren and is highly significant in my view.

The majority of investors still deny that this represents a significant turning point in Japan.  The analysts argues that companies have recently obtained pricing power through significant consolidation of Japanese industry over the past 30 years.  In 1975 the average market share of the top three companies in domestic industries was 55% but had risen to 80% in 2005.  Furthermore the Herfindahl-Hirschman Index of market competition averages 2,000-2,500 in Japan which normal indicates an oligopolistic market structure.