LOOSENING UP:
Relaxed Regulations to Change Japanese Lifestyles

May 14, 1997

Foreign Exchange to Be Liberalized
Under the new measures, foreign currency change will be completely liberalized beginning in fiscal 1998 (April 1998 to March 1999). This is expected to benefit consumers in a number of ways. Now, for example, it is illegal for travelers to sell foreign currency left over from their overseas journeys to their acquaintances; this restriction will soon be a thing of the past. The licensing system, whereby only banks and a few hotels were allowed to offer exchange services, will be done away with so that anyone may enter the field.

This is expected to lead to a leap in specialized money-changing stores as well as the entry of convenience stores and other businesses into the fray. The increased number of outlets should bring about fiercely competitive exchange rates and fees, thus benefiting the users of the services. This deregulation will further enable shoppers to make purchases in Japan using foreign currency. Retail stores and mail-order catalogs will be able to be list the prices of imported items in dollars or other currencies, and "dollar shops," where payment can be made in dollars or in yen according to that day's exchange rate, are expected to make their appearance.

Deregulation to Lower Condominium Prices
At present, the floor space of a newly constructed housing complex is limited to 400% of the area of the land where it is built. A loosening of this space/site ratio restriction to 600% will take effect as early as fiscal 1998 in high-rise residential areas of major cities. The deregulation will also exclude stairways and other commonly used areas from the calculated floor space; this should nearly double the allowed size of a housing complex on a fixed plot of land.

The Ministry of Construction has calculated that this will lead to the price of a condominium in central Tokyo that currently costs 70 million yen (583,000 dollars at 120 yen to the dollar) falling to about 50 million yen (417,000 dollars). The measures should also bring about the construction of about 600,000 large condominium units over the next decade in and around the Tokyo, Osaka, and Nagoya metropolitan areas, boosting the economy to the tune of 24 trillion yen (200 billion dollars).

Wider Pharmaceutical Sales
Under current regulations, pharmaceutical products may be sold only through pharmacies that have obtained a gubernatorial permit. This is to ensure that a trained pharmacist can provide drugs that fit the symptoms and physical condition of each patient. Sales of less potent medicines, however, are slated to be liberalized as soon as fiscal 1998. This will lead to the sale of, and cheaper prices for, vitamin supplements and other such products at convenience stores and other outlets. Because of concern about possible allergic or other reactions to drugs, and the large number of them that should be accompanied by the informed advice of a highly trained pharmacist, the selection of pharmaceuticals whose sale will be liberalized will take place gradually.

Transportation Market to Grow
Other deregulatory measures have already allowed taxi operators to set fares within a 10% range from previously prescribed levels as of April 1997, and provided for the shift to an upper-limit fare system by 2001. The number of vehicles needed by a taxi company to begin operation is to be lowered from the current 60 to only 10 in major cities including Tokyo and Osaka. These developments should usher numerous new entries into the market and heighten competition in fares and services.

Deregulation will also boost domestic air travel. The supply-demand adjustment system that has thus far prevented the appearance of new companies will be abolished in fiscal 1999, allowing airline companies to set their own routes. This will lead to multiple operators flying the same routes and increased competition to attract passengers. The current fare system, under which airlines may set their prices within a 25% band below the standards set by the Ministry of Transport, will be changed to an upper-limit fare system by fiscal 1999. Passengers will enjoy even lower ticket prices as companies become completely free to set their fares within the prescribed maximums.

Even Classrooms Liberalized
By as early as the school year beginning in April 1998, guest lecturers without teaching licenses will be allowed to teach elementary school students in core key subjects such as Japanese, math, science, and life environmental studies. The Ministry of Education now allows these instructors to teach lessons in ohter subjects including music, art, physical education, and home economics, but this deregulatory measure will expand that range to cover all subjects.

Students will soon be able to learn about the historical sites and natural features of their communities from local people versed in the history or flora and fauna of the region. With a variety of people like members of the local fire department at the front of the classroom, children will receive an educational experience more nurturing to their interests and dreams. The new measures in the government's deregulation program will touch the lives of even the youngest members of Japanese society.