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The 2009-11-27 edition of “NIKKEI Japan Report” was about the weather and about Nippon Steel Corporation (TYO:5401). Both features were extremely interesting, following an approach that highlighted the Japanese particularities, but could easily be translated to other countries, namely the more volatile meteorological conditions and deflation, hands on with a stagnated or decreasing population. As a guest, Waichi Sekiguchi – Nikkei editorial writer – made opportune comments.

Nowadays, people can access localized weather information, worldwide, with unprecedented ease, for example using the Internet. Some might ask: how is it possible? This NIKKEI report explained a bit of what is going on under the bonnet, with the help of the Japan Meteorological Agency (JMA) and WeatherNews Inc., a private company on the business of weather forecasting, owning a 24/24 TV and Internet channel.

The JMA collects data from meteorological satellites and, every 10 minutes, polls 1300 weather stations, across Japan, measuring wind direction, daylight hours, rain quantity and temperature. Most data is fed into a super computer that outputs a “numerical weather prediction”, and then refined by human operators who, using their personal experience can make revisions to the automatic forecast, refining its accuracy. Tadashi Kikuchi says their accuracy is “86% or 87% that it will rain next day”.

Comparing JMA to WeatherNews is a bit like comparing machine vs humans… because the most interesting tool on WeatherNews’ portfolio is their network of supporters: people who input data. This data can be pictures taken with mobile phones, written weather reviews, and more objective metrics, gathered by handheld devices that the company provides to the supporters, in order to measure air pressure, humidity, temperature and more, at their locations. On average, 5000 messages/day are received. On busy days, the value might escalate to 20000 messages.

Accurate weather information is critical to many businesses and safety:  for example, convenience stores can tune their supply of umbrellas and food, roads can be opened/closed, and even health measures can be taken depending on weather forecasts – Ryoji Miyashita spoke about the correlation between heart attacks, temperature and air pressure: the lower the temperature, the more the body tries to retain heat, by pressuring blood vessels, increasing the odds of damaging clogs; the less the air pressure, the less pressure on blood vessels, eventually allowing them to over expand….

The NIKKEI report then switched to a brief interview with Akio Mimura, Nippon Steel Corporation’s chairman. He was brilliant on framing together economic vectors such as the Japanese domestic market, population growth (or lack of it), globalization, international competition, ecological production and technology. A decade ago, the company was the world’s #1 steel producer with an annual output of 100+ millions tons. Since the mid 1990s, Nippon Steel stagnated on volume, while China took the lead, now producing 500+ millions tons.
On technology, the Japanese still are the best: their production process is 20% less aggressive on CO2 emissions, because 85% of the consumed heat is regenerated. Thus, their strengths are “green” and “tech”. But, because of deflation and a stagnant domestic market, the only way the company can grow is by exporting – globalization is the way and a strong yen could be a problem.

This was a very interesting report, covering many contemporary issues in a short time.