Jobless Rate Rises To 5.1% In Nov.

The Ministry of Internal Affairs announced that Japan's unemployment rate rose by a seasonally adjusted 0.1% from October to 5.2% in November. The consensus by economists was around 5.2%. The number of unemployed rose 750,000 year on year to 3.31 million, up for the 13th straight month. Of the total unemployed, those who were asked to leave by their employer expanded by 490,000, while those who left voluntarily rose by 70,000. The number of people with jobs declined by 1.31 million down to 62.6 million, the 22nd straight month of contraction.

Buyout Funds Trippling Japan M&A Spending To Y250bn For Oct-Dec

Improving credit conditions appear to have revitalized buyout funds, with merger and aquisition activities targeting Japanese companies expected to jump a little over 200% on the year to some 250 billion yen in the October-December quarter, according to Nikkei. That quarter figure is getting a big boost from US investment fund Bain Capital LLC's acquisition of Bellsystem 24 Inc. for roughly 100 billion yen. The deal was annoucned in November. But the total for 2009 will likely be slightly more than 420 billion, down 60% from a year earlier and the lowest since the 110.7 billion yen of 2002.

JPE Fund Bought Health Care Company

Japan Asia Investment Company Co.,(JAIC), a listed VC company announced that its fund acquired all shares of Healthy Service Co., a Chiba-located provider of elderly care services. The fund is managed by JAIC's affiliate, Japan Private Equity Co. Ltd. which is an investment firm specializing in small markets that EV ranges from 1~5 billion yen. The nursing services provider recorded the sales of 1.9 billion yen this year with 600 employees. The deal is a business-succession type.

Tokyo Office Vacancies Hit Record High

Vacant office space in central Tokyo totaled at a record-high of about 1.79 million square as of the end of November, according to office broker Miki Shoji Co. Office demand has continued shrinking in the Tokyo Metropolitan area, with 7.98% of central Tokyo offices vacant at the end of November. Brand new office buildings were not immune to the downtrend, with the average vacancy rate of those built during the year standing at 21.5%.

Daiwa Principal and Fund Sell Nikko Elec To Chinese Company

Daiwa Securities SMBC Principal Investment Co. and an investment fund operated by billionaire American financier Wilbur Ross plans to sell 79.1% of the outstanding shares in Japanes autoparts firm Nikko Electric Industry Co. to Chinese autoparts manufacturer Ningbo Yunsehen Co., according to Nikkei. Ningbo is listed on the Shanghai Stock Exchange and makes magnetic materials and motors for passenger vehicles. Nikko Electric supplies parts for automobiles and construction machinery to such customers as Isuzu Motor Ltd., Komatsu Ltd. and Mitsubishi Heavy Industries Ltd.

Secured Capital Japan To Buy Tokyo Skyscraper For Y140bn

Secured Capital Japan Co(SCJ)., a leading real estate fund, will buy the Pacific Century Place, a premier class 32-story building located in Marunouchi for about 140 billion yen, according to the Nikkei. The deal will go down as the biggest domestic real estate transaction since the financial crisis. The developer, Hong Kong's Pacific Century Group, sold the building to DaVinci Holding KK for about 200 billion yen in 2006. After DaVinci defaulted on re-financing this September, major creditor Shinsei Bank led an auction for the property. Mitsubishi Estate Co. was reportedly among the bidders, as were pairings of East Japan Railway Co. and Mitsui Fudosan Co. and of Kenedix Inc and the Carlyle Group. SCJ emerged the winner and reached a tentative prurchase agreement Monday.

Panasonic Takes Control Of Sanyo For $4.6 bn

Panasonic Corp. announced that it will buy a majority stake in Sanyo Electric Co. for about $4.6 billion. It hopes to secure its position as a leading provider of batteries for fuel-efficient automobiles by taking control of Sanyo's battery operations, according to Nikkei. In a statement, the Osaka-based consumer electronics giant said it will acquire 50.19% of Sanyo for Y403.78 billion after a tender offer. The offer, which had been in the pipeline for nearly a year, expired Dec. 9 and is set to be settled Dec. 16.

Aeon To Sell Talbots To US fund

Aeon Co., a leading operator of general merchandise stores announced that it will sell major US clothing retailer Talbots Inc. to an American investment fund. Aeon divests when Talbots merges with a special-purpose company under US fund BPW Acquisition Corp. in Feburary. When it takes place, Aeon will sell its entire 54% of about 29.9 million shares to the US clothier. At the same time, Talbots will repay all of the roughly 20 billion yen it has borrowed from Aeon.

GDP Revised Down Sharply to Annualized 1.3% In 3Q

The Cabinet Office reported that GDP rose by 0.3% in the July-September quarter, rather than by 1.2% as initially estimated on Nov.16. In annualized terms, growth came to 1.3%, a downgrade from the preliminary figure of 4.8%. The media estimate was for 2.8% growth. The GDP deflator staged a fall of 0.5% rather than a rise of 0.2% as figured in the preliminary report. By category, capital investment dropped 2.8% from an initial estimated 1.6% decline, housing investment fell 7.9% rather than 7.7% and public investment fell 1.6% not 1.2%. Companies are cutting investments in plants and equipment to protect earnings, fueling concern about a recovery that's already under threat from deflation and a rising yen.

Listed Firms' Stock Buybacks Shot Up 6-Fold In Nov

Share repurchases by listed companies sextupled on the month to 62.7 billion yen in November, according to data compiled by Nomura Securities Co.. The Nikkei Stock Average's slide that month, to just shy of falling below 9,000, is believed to have compelled some firms to buy back their shares to underpin prices. A total of 119 companies announced buybacks in November, 32 more than in October.

Foreigners To Get Tax Exemptions For Returns On Corporate Bonds

The government Tax Commission has decided to waive taxes on interest income earned on Japanese corporate bonds held by overseas investors, according to Nikkei. Currently, such income on corporate bonds issued in Japan is taxed at a hefty 15%, a factor contributing to a lack of interest in Japanese corporate bonds among foreign investors. The tax break will be a temporary measure lasting three years starting in fiscal 2010. The commission, however, is planning to continue to tax interest earned by overseas affiliates holding bonds issued by Japanese firms.

The Team of Toshiba and INCJ Loses Bid For Areva's Power Grid Equipment Unit

A French group was victorious n its effort to buy the power transmission and distribution equipment unit of major French nuclear firm Areva SA, thereby dashing Toshiba's hopes for making its own acquisition, according to Nikkei. The final round of the tender in early November was a three-party race among: a partnership of Toshiba and public-private investment fund Innovation Network Corp. of Japan (INCJ), an alliance of the French firms Alstom SA and Schneider Electric SA, and a group led by General Electric Co. The French alliance, which offered roughly 4.09 billion Euros, has effectively won the bid by securing the priority negotiation rights. The Toshiba team is believed to have offered the highest price, but the French government, a major shareholder of Areva, appears to have backed the local alliance.

Peugeot In Talk To Become M'bishi Motor's Top Shareholder

Mitsubishi Motors Corp. and PSA Peugeot Citroen Group are negotiating a capital tie-up that would give the French firm a 30-50% stake in the struggling Japanese automaker, according to Nikkei. The deal would help Mitsubishi bolster its financial health and accelerate its business rehabilitation efforts. In exchange, Peugeot would be able to tap Mitsubishi's expertise in electric vehicles and its business network in emerging countries. The two have been discussing co-developing environmentally friendly vehicles.

Alps, INCJ To Study Green Device

Alps Electric Co., Ltd, a major producer of comprehensive electronic components, announced that they reached a basic agreement with the Innovation Network Corporation of Japan (INCJ) to begin a joint feasibility study on the promotion of business in magnetic material and thin-film process technologies. This new business encourages an "open-innovation" style with the open involvement of industries and research institutions involved in the creation of environmentally-friendly products that serve to realize a low-carbon society through energy conservation and efficiency. INCJ was established in July as a public-private investment fund for promoting the commercialization of unexploited advanced technologies and patents.

Gokurakuyu Plans To Open Its 1st Chinese Spa in '11

Gokurakuyu Co., an operator of large-scale hot bath facilities, plans to open its first Chinese spa facility by the end of March in 2011 under a tie-up with a Hong Kong asset management company, according to Nikkei. CITIC International Assets Management Ltd., or CIAM, on Monday, acquired a 4.2% stake in Gokurakuyu from investment firm MBK Co., which had owned an 8.4% interest before the deal. The three will set up a joint venture as early as January in Hong Kong, with Gokurakuyu holding 40% and the other two combined holding 40%. The joint venture will start raising funds and searching for suitable locations in China, which has seen a dramatic increase in spa openings. CIAM is a unit of the Chinese-government-affiliated financial services giant CITIC group.