ShareTOKYO: Japan began circulating its first new banknotes in 20 years on Wednesday, featuring three-dimensional portraits of the founders of financial and female education institutions in an attempt to frustrate counterfeiters. The notes use printed patterns to generate holograms of the portraits facing different directions, depending on the angle of view, employing a technology that Japan’s National Printing Bureau says is the world’s first for paper money.
“Faces of those representing Japan’s capitalism, women’s empowerment and technology innovation are on the new bills,” Prime Minister Fumio Kishida said at a function. The step comes just as the economy moves into a growth-driven phase for the first time in three decades, he added.
Key companies are raising workers’ wages at the fastest rate in 33 years, but lingering inflation, fed by the rapid weakening of the yen currency, keeps consumption and the mood of business sluggish, recent economic data show. Existing bills will stay in use, but train stations, parking lots and ramen shops are scrambling to upgrade payment machines as the government pushes consumers and businesses to use less cash in its bid to digitize the economy. The new 10,000-yen ($62) note depicts Eiichi Shibusawa (1840-1931), the founder of the first bank and stock exchange, who is often called “the father of Japanese capitalism”.
The new 5,000-yen bill portrays educator Umeko Tsuda (1864-1929), who founded one of the first women’s universities in Japan, while the 1,000-yen bill features a pioneering medical scientist, Shibasaburo Kitasato (1853-1931). While Kishida talked up the latest technology to fight counterfeiting, it is not a major problem in Japan. The 681 fake banknotes police detected in 2023 represented a sharp drop from a record high of 25,858 in 2004.
Authorities plan to print about 7.5 billion newly-designed bills by the end of the current fiscal year, swelling the 18.5 billion banknotes, worth 125 trillion yen, in circulation by December 2023. “Cash is a secure means of payment that can be used by anyone, anywhere, and at any time, and it will continue to play a significant role” despite alternatives, said central bank governor Kazuo Ueda. The Bank of Japan has experimented with digital currencies, but the government has made no decision whether to issue a digital yen.
The first renewal of paper money since 2004 spurred businesses to upgrade payment machines for cash-loving customers. Cashless payments in Japan have almost tripled over the past decade to account for 39 percent of consumer spending in 2023, but still lag global peers and should rise to 80 percent to boost productivity, the government says.
Nearly 90 percent of bank ATMs, train ticket machines and retail cash registers are ready for the new bills, but only half of restaurant and parking ticket machines, the Japan Vending Machine Manufacturers Association said. Almost 80 percent of the nation’s 2.2 million drink vending machines also need upgrades, it added. — Reuters
“It might take until year-end to respond to this,” said Takemori Kawanami, an executive at ticket machine company Elcom. “That’s too slow, but we are short of components,” he added, as client orders for upgrades exceeded expectations. Many Japanese fast-food restaurants such as ramen shops and beef bowl stores use ticket machines to cut labor costs, but some small business owners battling inflation are unhappy at the extra investment needed.
“The machine replacement has no sales impact, so it’s only negative for us, on top of rising costs of labor and ingredients,” said Shintaro Sekiguchi, who spent about 600,000 yen for ticket machines at three ramen shops he runs in Tokyo.
KARACHI: Pakistan is looking to clinch a staff level agreement on an International Monetary Fund bailout of more than $6 billion this month after addressing all of the lender’s requirements in its annual budget, its junior finance minister told Reuters. The South Asian country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures.
“We hope to culminate this (IMF) process in the next three to four weeks,” Minister of State for Finance, Revenue and Power Ali Pervaiz Malik said on Wednesday, with the aim of thrashing out a staff level agreement before the IMF board recess. “I think it will be north of $6 billion,” he said of the size of the package, though he added at this point the IMF’s validation was primary focus.
The IMF did not respond immediately to a request for comment. Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion) for the fiscal year that began on July 1, a near-40 percent jump from the prior year, and a sharp drop in its fiscal deficit to 5.9 percent of gross domestic product from 7.4 percent the previous year.
Malik said the point of pushing out a tough and unpopular budget was to use it a stepping stone for an IMF program, adding the lender was satisfied with the revenue measures taken, based on their talks. “There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” Malik said. While the budget may win approval from the IMF, it could fuel public anger, according to analysts.
“Obviously they (budget reforms) are burdensome for the local economy but the IMF program is all about stabilization,” Malik said. Sakib Sherani, an economist who heads private firm Macro Economic Insights, said a quick deal with the IMF was needed to avoid pressure on Pakistan’s foreign exchange reserves and the currency given the country’s maturing debt repayments and the effects of unwinding of capital and import controls that were applied earlier. “If it takes longer, then the central bank may be forced to temporarily re-instate import and capital controls,” he said. “There will be a period of uncertainty, and one casualty is likely to be the rally in equities.”
Pakistan’s benchmark share index closed up 0.9 percent on Wednesday, reaching a record intraday high of 80,405 points before closing at 80,332 points. The index has rallied roughly 10 percent since the budget was presented on June 12, helped by continued optimism on getting an IMF bailout package to bolster the struggling economy. — Reuters
