Let’s enjoy English 15th

【Side effect from silver bullet is negative interest rate】

If depositing the money at the current account in the bank, we can’t get any interest originally. A technical book on the Bank of Japan says being unable to get any interest, but the Bank of Japan adds the interest of 0.1% to the amount of money which is over the lawful reserve from November in 2008. We call it excess reserve deposit. Why does the Bank of Japan add the interest?

The Bank of Japan carried out the significant easy monetary policy in 2008 and as a result, the interest went down so much, but if dropping excessively…

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【Side effect from silver bullet is negative interest rate】

…but if dropping excessively, even if lending money, we can’t make any profit, each of banks may have thought like that and renting the money between banks decreased as well. Then unexpected financial crisis may have been caused. As the Bank of Japan is worried about it and adding the interest rate of 0.1%, so even if the interest rate goes down, it doesn’t less than 0.1%. Expecting the risk and establishing the lowest interest rate level.

As long as depositing the money in the Bank of Japan, banks can get interest rate though it’s …

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【Side effect from silver bullet is negative interest rate】

…banks can get interest though it’s not enough.

The willingness that Banks do their best and findnew borrower may have lost, so the government has announced if leaving the money at the current account in the bank of Japan, penalty would be imposed on the banks.

《Though the Bank of Japan has carried out the easy monetary policy…》

If the economy goes bad, the Bank of Japan goes down the interest rate. If the interest rage goes down, companies can rent the money from banks easily, so companies will be able to found a new factory…

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【Side effect from silver bullet is negative interest rate】

《Though the Bank of Japan has carried out the easy monetary policy…》

…or companies would employ new employees. Ordinary people can rent housing loan easily and the people who build its own home will increase, and those things lead to the recovery on the economy, so the Bank of Japan has tried to drop the interest rate and we call the action the easy monetary policy.

What should we do so as to drop the interest rate? The Bank of Japan used to drop the official discount rate in the past. It’s the interest rate when the Bank of Japan…

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【Side effect from silver bullet…】

《Though the Bank of Japan has carried out the easy monetary policy…》

It’s the interest rate when the Bank of Japan lends the money to other banks, but the system has never been adopted at present. Instead, the next way has been adopted.

Ordinary financial institution lends and borrows money each other. They make it a rule not to have money as possible as they can at hand, so they sometimes can’t respond to a large amount of withdrawal at once.

We call the place where borrowing and lending money is a call money market, for calling to borrow or to return…

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【Side effect from silver bullet is negative interest rate】

《Though the Bank of Japan has carried out the easy monetary policy…》

…for calling to borrow or to return money each other.

If the money on the bank at hand which lends or borrows in the call money market increases, the bank which wants to lend money increases more than other bank which wants to borrow money.

The Bank of Japan aims at it and buys the national bond which the bank has and transfers the money on the current account in the bank.

Even if the bank gathers the money, it can’t lend the money to anyone, so it buys the…

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【Side effect from sliver bullet…】

《Though the Bank of Japan has carried out the easy monetary policy…》

…so the bank buys the national bond which the government issued, so the Bank of Japan buys the national bond from the bank.

Thus the Bank of Japan has dropped the interest rate, to almost zero. It’s the policy on the negative interest rate, but the economy doesn’t go well easily, so the Bank of Japan took the plunge and carried out the easy monetary policy.

Buying the large amount of the national bond as it was and transferring more than money to the current account in the bank as it was.

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【Side effect from silver bullet is negative interest rate】

《Though the Bank of Japan has carried out the easy monetary system…》

The Bank of Japan expected the bank thought it was useless to pile up the money in the current account, so the bank would start to lend the money to companies, but the amount of lending the money doesn’t increase.

The Bank of Japan was so impatient that it threaten to impose the penalty on the bank. It’s the negative interest rate, but imposing the penalty on the bank suddenly, its shock is too strong.

As to the amount of depositing money in the past, adding the…

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【Side effect from silver bullet…】

《Though the Bank of Japan has carried out the easy monetary policy…》

…adding the interest rate of 0.1% in the past, and imposing the negative interest on the part of money which increased in the current account after the sixteenth day February in 2016.

Introducing the negative interest rate causes all of the interest rate to drop. The interest rate on the national bond which the government tried to start to sell dropped, and when it seemed to be sold, giving up to sell for a while.

If no one buys the national bond, the government falls into being lack of…

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If no one buys the national bond any more, the government will fall into being lacking of fund.

The negative interest rate is a strong silver bullet, but its side effect seems to be strong as well.

【Negative interest rate was imposed on even the national bond】

After the Bank of Japan has introduced the negative interest rate, even the interest rate on the national bond becomes minus.

When issuing the national bond, the government doesn’t have to pay its interest. Far from it. It’s the negative interest, so the government can make a profit. The more the debt which means the…

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【The negative interest rate is imposed on even the national bond】

The more the debt which means the national bond increases, the more the government makes a profit. It’s a strange thing. Why is it possible?

The author suggested readers review on the negative interest rate, moreover, I can’t understand it very much, so I’m sorry I’m afraid I have to repeat the same thing.

Ordinary banks deposit its money on the Bank of Japan. It’s the current account in the Bank of Japan. Preparing for the time when the banks fall into being lacking of fund, the banks are obliged to deposit the money on….

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【The negative interest rate is imposed on even the national bond】

…the banks are obliged to deposit their money on the Bank of Japan to some extent. It’s the lawful reserve, and the interest rate isn’t added to it, but the amount of money which is over the lawful reserve, the interest rate of 0.1% is added. We call it an excess reserve.

As a result, depositing the money in the Bank of Japan can make a profit rather than finding borrowers, the Bank of Japan has thought like that, as to the fund which increased in the current account at the Bank of Japan from February in 2016, taking a…

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【The negative interest is imposed even on the national bond】

…taking a commission of 0.1% from the banks.

Without depositing the money in the Bank of Japan, increasing borrowers and joining force so as to recover the economy. The government has suggested like that.

It means the money which the bank deposits in the Bank of Japan. If we deposit our money on the bank, we aren’t taken any commission at all. The interest is added to our money though it’s slight.

But as to the national bond which the government issues, its interest rate becomes minus. If having the national bond, we’ll lose…

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【The negative interest rate is imposed on even the national bond】

If having the national bond, we’ll lose money, and the government can make the profit. It means if the distribution price on the national bond rises, its interest rate drops. If the distribution price drops, its interest rate rises. It’s complicated.

Let’s suppose the national bond was issued. We can receive one million yen at the day of expiration. Then the price on the national bond is sold usually lower than a million yen. When being sold, its price is ninety hundred eighty thousand yen, the difference is twenty thousand

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【The negative interest rate is imposed even on the national bond】

But if the popularity on the national bond rises to nine hundred ninety thousand yen, the interest rate decreases by ten thousand yen. It’s the meaning that if the distribution price on the national bond rises, its interest rate drops.

The national bond becomes the negative interest rate means the next thing concretely.

For example, the distribution price on the national bond which we can receive one million yen on the expiration day becomes one million ten thousand yen. Who buys the national bond?

The ones who buy the …

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【The negative interest rate is imposed even on the national bond】

The ones which buy the national bond are ordinary financial institutions. They have a sense of security even if buying the national bond with high price, the Bank of Japan will buy it back at once.

《Because the Bank of Japan buys it, so it’s all right…》

The Bank of Japan continues the easy monetary policy in a different dimension at present. It’s bought the national bond from the banks hard and issues the bill. Buying the national bond with the pace of no less than eighty trillion yen a year.

For example if a bank buys the …

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【The negative interest rate…】

《Because the Bank of Japan buys it, it’s all right…》

For instance, if a bank buys the national bond which the bank can receive one million yen on the expiration day with the price of one million ten thousand yen and waits for until the expiration day, the bank loses, but before it the Bank of Japan bought the national bond with one million twenty thousand yen, the bank made profit.

But if continues, what happens to the management on the Bank of Japan?

Even if the Bank of Japan bought the national bond from banks, it could receive the money which is more than…

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【The negative interest rate is imposed even on the national bond】

《Because the Bank of Japan buys it, it’s all right…》

…the Bank of Japan could receive the money which is more than it bought it, so it became the profit for the Bank of Japan, but it waits for until the expiration day and continues the way of losing money, so the loss causes for the Bank of Japan in the future, so the Bank of Japan has started to prepare for it. The Bank of Japan has allocated the allowance of some four hundred fifty billion yen at the settlement of account March in 2016.

The allowance is saving up money so…

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【The negative interest rate is imposed even on the national bond】

《Because the Bank of Japan buys it, it's all right...》

The allowance is saving up money so as to make up for the loss in the future. As the Bank of Japan continues to buy the national bond, it holds the national bond of some three hundred fifty trillion yen at the end of March in 2016. When the negative interest rate moves forward, the market capitalization 時価総額 on the Bank of Japan is minus. In short, the Bank of Japan causes the loss.

When causing the profit, the Bank of Japan pays it as national treasury. The amount of...

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【Negative interest rate is imposed even on the national bond】

《Because the Bank of Japan buys the national bond, it's all right...》

The amount of the money on the national treasury was three thousand nine hundred trillion yen in 2016, and seven thousand five hundred trillion yen in 2015, so it becomes half.

In short, the more the negative interest rate continues, the more the government makes profit, but the less the national treasury payment increases.

As the Bank of Japan has bought the large amount of the national bond at present, so banks can buy the national bond with relief, but...

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【Negative interest rate is imposed even on the national bond】

《As the Bank of Japan buys the national bond it's all right》

...but if the Bank of Japan refuses to buy the national bond, banks will be in difficulty. It's the Mitsubishi Tokyo UFJ bank which has the sense of crisis like that. It's relinquished the qualification of joining in bidding on the national bond with special condition.

The qualification is called special dealer. Brokerage firms and banks have the qualification, and they have the privilege of exchange opinion with the Ministry of Finance, on the other hand, whenever...

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【Negative rate interest is imposed…】

《Because the Bank of Japan buys the national bond, it’s all right…》

…whenever the nation issues the national bond, they have the duty of applying for buying 4% of the national bond.

Mitsubishi Tokyo UFJ bank must have considered of the risk of going on buying the 4% of the national bond.

Even if the government has put off increasing tax, as banks continue to buy the large amount of the national bond, the national bond can maintain its trust, but even the big bank was reluctant to buy the national bond. A warning light has been shown on the Abenomix …

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A warning sigh has been shown on the Abenomix which is supported by the easy monetary policy in the different dimension.

【Things which the Bank of Japan has done by reducing stock price】

Reducing the stock price is the best so as to support the Abe government, so they seemed to do everything.

The Bank of Japan started an additional idea on the easy monetary policy July in 2016, and we were forced to think like that.

The more printed the Bank of Japan note and going on buying stock, the higher the stock price becomes. Then the approving rate on the Abe government is maintained…

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【Things which the Bank of Japan has done by reducing stock price】

Then the approving rate on the Abe government is maintained with high level. The real state on the central bank of which independence is important fell to the level of the cheering group for the Abe government has been disclosed.

The centerpiece on the new easy monetary policy is increasing the amount of buying ETF a year from three hundred thirty million to six hundred million. ETF is an abbreviation of exchange trend fund.

As the technical word appears, if we don’t have the knowledge on economy, we can’t understand it.

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【Thing which the Bank of Japan has done by reducing stock price】

The author said he was going to start from the first step. Absolutely I want to ask him to do it.

When the economy doesn’t go well what should we do? Economics expresses there is fiscal policy and banking policy.

The financial policy is done by the government. In short, increasing public works. As paving a road or building a bridge, both of the works on the construction company and of the work on subcontractor increase and material on construction like cement or iron is sold and the construction world becomes wealthy.

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【Things which the Bank of Japan has done by reducing stock price】

If overtime pay and bonus on employees increase, they feel like going shopping for something extravagant like replacing by buying something new. The government tries to improve the economy like that. If the expenditure on the public work isn’t enough, the government will issue the national bond. It’s a debt for the nation.

On the other hand, the banking policy is done by the central bank in the nation like the Bank of Japan. Easy monetary policy is done as economic measure. The Bank of Japan buys the national bond hard which…

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【Things which the Bank of Japan has done by reducing stock price】

The Bank of Japan buys the national bond hard which private financial institutions have. Lots of the national bond issuing for the public works have been bought by financial institution like banks, but banks want to lend their money to companies or individualities and to get interest income from them, but the economy isn’t doing well, so banks can’t find their borrowers, so they continued to buy the national bond against their will.

As a result, the money in stock for banks decreases, even if we tried to borrow money from…

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【Things which the Bank of Japan has done by reducing stock price】

…even if we try to borrow the money from banks there is possibility that the interest rate is high, so the Bank of Japan buys the national bond form banks. Printing the bank note hard and handing the bank note to banks, though the one which prints the bank note actually is the national printing bureau.

The phrase that the Bank of Japan offers the money to the market appears on a news program on TV. It means like that.

If there is cash enough too much in banks, when lending its interest rate becomes low. If it continues…

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【Things which the Bank of Japan has done by reducing stock price】

If it continues, the interest rate becomes almost zero and we can lend the money from banks easily.

Contrary to it, even if depositing our money to banks, its interest rate is hardly adding to our money, but if learning to lend the money from banks with low interest easily, the one who makes use of the housing loan and tries to have its own home will increase. If construction on residence increases, it becomes the economic measure.

The Abe government started three arrows as Abenomix, and two of the three arrows are the…

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【Things which the Bank of Japan has done by reducing stock price】

Two of the three arrows in the Abenomix is the financial policy and the banking policy. The last arrow is trying to create a new production, but none of anything new has never been born.

《If there is no effect, let’s buy the stock》

But the Abenomix seemed to reach a dead end. There are few people who realize that the economy becomes good, so the Bank of Japan tried to move forward the easy monetary policy and to support the Abe government.

The Bank of Japan continues to the national bond with the large amount of money a year

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【Things which the Bank of Japan has done by reducing stock price】

《If there is no effect, let’s buy the stock》

The bank of Japan has spent no less than eighty trillion yen on the national bond a year, but going on buying the large amount of the national bond, it has a limit, so the Bank of Japan has adopted the next steps. It’s spent ninety billion yen a year on J-REIT and buying ETF with three trillion three hundred billion yen, but its effect isn’t good as expected, the amount of money buying ETF increases to six trillion yen.

As you know I’m completely stranger to the economy, so the…

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【Things which the Bank of Japan has…】

《If there is no effect, let’s buy the stock》

…so the author was going to express on the J-REIT and ETF.

Both of the J-REIT and ETF are investment trust 投資信託, so we can buy both of them in a brokerage firm. If buying, we are called investors.

The investment trust is gathering funds from ordinary investors and buying stock or lands with the funds, operating the funds. When being able to make a profit, distributing the profit to the investors.

As to the J-REIT, gathering funds form investors and buying mansion and making profit by rental income or…

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【Things which the Bank of Japan has done by reducing stock price】

《If there is no effect, let’s buy the stock》

…or selling the mansion.

J-REIT is an abbreviation of Japan Rental Estate Investment Trust.

If the Bank of Japan buys the investment trust on J-REIT, as it leads to the movement on buying an office building or an apartment block newly, the both price on land and on building will rise, so the economy on the real estate becomes good.

ETF is the investment trust buying stocks, and is also called the listed investment trust, for it’s listed on a stock exchange like ordinary stocks…

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【Things which the Bank of Japan…】

《If there is no effect, let’s buy stocks》

…and everyone can buy the investment trust on the EFT. Every brokerage firm has varied EFT and the one which the Bank of Japan buys seems to be working seamlessly with stock price.

As the Bank of Japan wants to raise the Nikkei stock average the Bank of Japan buys the investment trust on ETF, for if the stock price rises, the Abe government could insist that the economy is becoming good.

But if the Bank of Japan chooses an individual stock, it means supporting an individual company, so the Bank of Japan buys the…

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【Things which the Bank of Japan has done by reducing stock price】

《If there is no effect, let’s buy stocks》

…so the Bank of Japan buys the one which seems to work seamlessly together nikkei stock average.

By the way, I’ve tried to continue my thread to no.490 this time, but I’m hungry so much. I’ve wanted to something to eat. Then I feel like drinking and to my sorrow, I can’t endure it, so I’m going to call it a day today. My will isn’t as hard as iron, but is weak like tofu and breaks easily.

I’m going to go to a public bath and to drink a little, maybe and have a meal. See you again.

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【Things which the Bank of Japan has done by reducing stock price】

《If there is no effect, let’s buy stocks》　

As to the Nikkei stock average, the average stock price of 225 companies which are listed with the first section of the Tokyo Stock Exchange calculated by the Nikkei newspaper and is announced. As to the investment trust which works seamlessly together, the Bank of Japan buys varied stocks so as to be the same price, even if it doesn’t buy all of the stock of 225 companies.

If the Bank of Japan buys the ETF of which stock price works together seamlessly, the stock price on lots of….

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…the stock price on lots of companies would rise, but as to ETF, the Bank of Japan buys the stock of which companies achievement aren’t very good, it means the stock price of which companies achievement aren’t very good would rise.

The better the achieve is, the higher the stock price. The worse it is, the lower the stock price. It’s the market forces, but its function could have lost.

【The Second Panama Canal has opened. A new age for energy】

It seems the situation on the energy in Japan seems to change so much, for the Second Panama Canal has opened. Speaking of the Panama Canal…

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【The Second Panama Canal has opened. The new age for energy】

Speaking of the Panama Canal, it runs through the Panama Republic which is in the slender route connecting the South and North America. The Panama Canal connects the Atlantic and Pacific Ocean so it’s an indispensable existence for the distribution of goods in the world.

It was in 1914 when the Panama Canal has opened. Lesseps who dug the Suez Canal tried to start the Panama Canal, but it’s different from the Suez Canal, for the Suez Canal, it’s all right as long as it cut through the desert.

On the other hand, there is the...

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【The Second Panama Canal has opened. The new age for energy】

…there is the mountain in the Panama Republic, and the construction work on the Panama Canal faced rough going due to the mountain, to make matters worse, construction workers were sick from malaria one after another, so the construction work on the Panama Canal was forced to give up then.

After that, American capital started the construction work again in 1904. Then lock gate was adopted. It’s a kind of elevator using water. There is the mountain which is 26 meters above sea level between the Atlantic and Pacific Ocean.

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【The Second Panama Canal has opened. The new age for energy】

When the ship runs through, both of the front and back of the ship is surrounded by the doors and water is poured. When the level of the water rises the doors are opened and the ship goes ahead. When going down, its opposition way is adopted. I’m wondering the water is drained then. It’s repeated and the ship moves forward.

As adopting the way, it is sometimes said the ship goes over the mountain. The construction work went ahead by the way, but it took no less than ten years until the construction work was over. Its full length …

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【The second Panama Canal has opened. The new age for energy】

The full length on the Panama Canal is 80km. It takes 24 hours to go up and down, including the time on waiting for the water up and down.

The way moving is the elevator by the water, so the size on the ship which goes through there is limited. The full length is within 294.1 meter, and width is within 32.3 meter. In general, we call it Panamax, for its max size for the ship to go through the Panama Canal.

As a result, the full length and width on the international ship is constructed by the Panamax. When Japan signed the…

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【The Second Panama Canal has opened. The new age for energy】

When Japan signed the surrender document at the Missouri war ship when the World War Ⅱ was over. Even the size on the Missouri was the Panamax.

America used to manage the Canal then, but the transfer movement by the nation in Panama wad done, the Canal has been managed by Panama Republic at present.

As it’s the international canal, regardless of the nationality of the ship, every ship can pass there as long as paying congestion pricing. A submarine belonged to America used to pass there.

The congestion pricing on a normal cargo…

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【The Second Panama Canal has opened. The new age for energy】

The congestion pricing on a normal cargo ship is from thirty thousand to fifty thousand dollars. It’s a valuable finance for the Panama government. As it’s the main artery for the world, it’s expected the amount of passing ships will increase in the future, but its completion was about a hundred years ago. The width on the canal is too narrow to catch up with increasing demand, so the expansion work on the Panama Canal started and it’s completed June in 2016.

A bypass has been built at the side of the lock gate, a wider cargo ship…

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【The Second Panama Canal has opened. The new age for energy】

…so a wider cargo ship than before learns to go pass through the canal. It’s a new Panamax.

《The situation on energy in Japan has changed violently》

As a result, a large ship which couldn’t pass through the canal in the past learns to be able to do there. When a container ship usually passes from the eastern coast in America to Japan it takes 35 days if going through the Atlantic Ocean and Suez Canal. If going around the Cape of Good Hope, it takes no less than 45 days, but if making use of the Panama Canal, it’s just 21 days.

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【The Second Panama Canal has opened…】

《The situation on energy in Japan has changed violently》

Even if paying the congestion pricing, being able to save up a large amount of the cost on fuel and employees, especially the one which we’ve expected highly is a tanker for LPG and the other for LNG can pass the Panama Canal.

LPG is abbreviation of liquified petroleum gas and LNG is the one of Liquified Natural Gas. When refining the crude oil, propane gas is taken out and the propane gas is liquified and its cubic volume is made small and transporting it.

LNG is natural gas is liquified.

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【The second canal has opened. The new age for energy】

《The situation on energy in Japan has changed violently》

The liquified natural gas is the material for the city gas or the one in the thermal power plant.

The width on those tankers are so wide and they aren’t Panamax, so they went around the Cape of Good Hope, but the width on the Panama Canal has been large because of construction on expanding the width, so those tankers learn to be able to pass there, and they can reach Japan faster than before, especially the one which pay attention is the liquified natural gas.

A large amount of…

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【The second Panama Canal has opened…】

《The situation on energy in Japan has changed violently》

A large amount of the natural gas has learned to be dug in America in 2000s, for the technical skill of taking out the natural gas which is confined to the shale 頁岩 has developed. We call it the revolution on the shale.

America used to be the biggest country for importing the natural gas, but it becomes the biggest country for producing the natural gas and has started to export it at present. And the natural gas has learned to be imported in Japan.

As a result, the place where we can procure the…

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【The second Panama Canal has opened. The new age for energy】

《The situation on energy in Japan has changed violently》

…the place where we can procure the natural gas has expanded. The place where we Japan imported the natural gas was limited. It’s mainly from the Southeast Asia or from the Middle East.

The countries which sell the natural gas to Japan took advantage of our need for the natural gas. They know if we can’t buy it, we’ll be in difficulty, so the price on the natural gas was high, refusing it was hard. But the situation has changed.

If being unable to discount, it’s all right..

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【The second Panama Canal has opened】

《The situation on energy in Japan has changed violently》

…it’s all right as long as we import from America and if passing through the Panama Canal, it’s faster than importing from the Middle East.

We can say like that.

The worse the situation in the Middle East is, the higher the price on the natural gas becomes. There used to be the risk in Japan in the past, but the natural gas would be supplied stably from now on.

Moreover, we can expect being on advantageous situation when negotiating with Russia in the future, for the President Putin wants to…

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【The second canal has opened…】

《The situation on energy in Japan has changed violently》

…for the President Putin wants to sell the natural gas taken from Sakhalin at the Far East to Japan. When negotiating so as to buy the natural gas, Japan refers to the natural gas in America and it enable us to discount the price on the natural gas.

Besides, if lots of ships learn to pass through the Panama Canal, the people who manage the Suez Canal will be upset.

The congestion price on a container ship in the Suez Canal has gone down so much in 2016. The Panama Canal has have big influence over the..

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