President's New Year Message for 2017
January 4, 2017
ITOCHU held a New Year’s Ceremony attended by approximately 2,000 employees at the Tokyo Head Office’s first floor lobby from 9 a.m. on January 4.
Following President & CEO Masahiro Okafuji's New Year's Message, there was a Japanese taiko drum performance of Sanadakachidoki, a traditional local entertainment in the Matsushiro area, a castle town in Sanadajyumangoku, Nagano Prefecture. A cheer of support by the ITOCHU cheerleading squad closed the ceremony.
The full text of President Okafuji’s New Year’s Message follows.
Happy New Year.
I hope that all of you were able to refresh yourselves over the New Year’s holiday and are starting off the New Year fully recharged. As we set off on a new year, I would like to share a few thoughts with everyone in the ITOCHU Group in Japan and around the world.
Last year, the Bank of Japan introduced negative interest rates, Britain voted to exit the EU, and Donald Trump won the US presidential election. It was a year that brought forth numerous unexpected events. In the sogo shosha sector, Mitsubishi and Mitsui both recorded losses on the year, as the industry saw several companies record large-scale impairment losses. At ITOCHU, we were forced to address the release of an unfounded investigative report by US-based short-seller Glaucus Research Group. These and other events sparked massive fluctuations in currency markets and stock prices.
This year also will see major political events jostling for the public’s attention. First, president-elect Donald Trump will take office on January 20. Bolstered by expectations that his administration will slash tax rates and expand fiscal expenditures, interest rates in the U.S. are increasing, the U.S. dollar is appreciating, and stock prices are rising. Whether the dollar and stock prices will continue to appreciate or come tumbling down will depend on the specific details of Trump administration policies. If U.S. interest rates and the dollar continue to rise, it could result in an outflow of capital from emerging nations, and so careful risk management is required in emerging nations with unstable financial structures.
In Europe, general elections for the Netherlands begin in March, followed by presidential and national assembly elections in France between April and June, and German national parliamentary elections are scheduled for September. A rise to power of conservative populist political parties, whose presence in countries throughout Europe continue to grow, has the potential to increase political risks in the region and could become a moment of truth for the very framework of the European Union.
In China, the most critical market for ITOCHU, the 19th National Congress of the Communist Party of China, a great assembly of the Chinese Communist Party held once every five years, will take place in the fall of this year. As the National Congress approaches, the power struggle between party members over positions within the party is expected to intensify, and all Chinese citizens will be nervously awaiting the outcomes of the battles. These changes could have a major impact on the Chinese economy, and we must continue to watch the situation very closely.
The various global developments that I have mentioned have fostered a growing sense of uncertainty and are having a significant effect on markets. For ITOCHU, as a trading company, change also means opportunity, but one mistake can cause irreversible harm. From today, we must realign our focus and prepare ourselves for a year that is expected to see dramatic change.
This year is the year of the Rooster, a year that is said to lead to increased customers, good fortune, and prosperous business. As we are an assemblage of merchants, this year should bear significant fruit for ITOCHU. I want us to realize our goal for the fiscal year of achieving 350 billion yen in consolidated net income, which would represent a new record for ITOCHU, and make 2017 a year that is remembered throughout the history of ITOCHU as one that propelled us to the next level.
Lastly, I want to express my hope that this year will bring prosperity to the ITOCHU Group, as well as health and happiness to every member of the Group around the world.