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This talk was given at the JAT Tokyo meeting, 20 April 2002.

Biodata:

• Currently working at Daiwa Institute of Research, Equity Research Division (企業調査本部) Research Production Department (調査プロダクション室), specializing in telecom and electronics industry finance translation and interpreting.
• Graduated from Monterey Institute of International Studies (MIIS) with an MA in Translation and Interpreting in Spring 2001.
• Freelance work pre-Daiwa focused on computer software, medical, general (magazine), CAD, server, corporate IR materials.
• Entered field as a beginner in terms of industry knowledge (economics minor in undergrad, semester of econ-related translation at MIIS), with much to learn as far as actual theories and background knowledge goes.
• All professional training is OTJ, relying heavily on in-house resources (very lucky).

Presentation Outline:

• The first half-hour focused on "Getting Started in Finance/Securities Translation" and included a very general description of the Japanese securities industry (post Big-Bang), demand for J-E translation and how it has been affected by recent trends in foreign market participation, and hints for beginners interested in getting started, including useful resources and tips for knowledge-base development.
• Some freelancer guidelines from the perspective of a translation outsourcer were discussed.
• Then, the focus shifted to brief commentary on a few of the short-term trends developing in the Japanese stock market at the moment. These included recent cyclical/technical trends, the direction of Japanese industry and technology (particularly in the biotech, telecom, and electronics fields), and the potential impact on translators and the translation market.

Finance-Related Translation in Japan (as I see it)

• Focus is on J-E related work (most high-paid demand in country is for scarce resources: native-E translators in the field are paid very well. In-house positions can begin at \5-6 million and top out at \13 million, depending on market conditions.) Freelancers make as much as they want. Mark-up to companies is very high so translators tend to make good money.
• Translation demand comes from mainly two sources: Investor Relations (produced by companies), and Investor Information (produced generally by securities companies and analysts). Other, more limited demand includes publications (Nikkei, Economic journals), online sites, etc. There seems to be an increasing amount of demand for bond-related translation.
• Investor relations-related demand is very seasonal, usually with peak flows in May (about a month after end-March reporting results), and November (interim reporting results). The Japanese fiscal or accounting year for most companies runs April-March, so Fiscal Year (FY) 2001 is actually from April 2001 to March 2002. Each company decides its fiscal year independently. Some companies (electronics companies) report fiscal results in calendar years to meet US standards, also some have random months (Feb for retailers, June, etc.). More Japanese companies are reporting on a quarterly basis (means more demand for translation), and many only recently switched to interim basis (1H, etc.)
• IR demand usually focuses on the company presenting itself well to potential or existing foreign investors. Companies with a high percentage of foreign investors will spend more money on translation and IR resources. These resources include: annual reports, corporate kessan tanshin (required earnings reports), press releases, and English web-page updates. Contrary to popular opinion, a translation of results (such as an annual report) based on Japanese accounting standards is not equivalent to filing under SEC, or US GAAP-related standards. Many Japanese firms are forced to file two sets of forms: one to Japanese, and one to foreign accounting standards. Most companies listed on Section 1 of the TSE, as well as other OTC companies, issue English versions of the paperwork. IR companies, such as IRJ, IBI, etc., exist to supply these needs. Translators can either work in-house for these companies or freelance.
• Investor-information related demand is generated for or to the following sides: buy-side, or pension fund managers, corporate fund managers, and other institution investors or retail (individual) investors, and sell-side, or securities firms. This information includes analyst reports, updates, web page updates, monthly magazines and reports, presentations for sales persons or analysts, and raw financial data. Most major Japanese, and foreign, brokerages maintain in-house translation departments, staffed with either Japanese or native-E translators and teams to support them. These departments are considered “support teams” for the sales and/or research side of the business. At my company, we have, for example, 14 full-time in-house translators (2 native-E), 4 native-E editors, 6 DTP processors, 2 full-time interpreters, two supervisors, and three managers. Other companies only use native-E translators (in short supply). This is usually a quality vs. volume issue: securities-related work is usually a steady flow of work (the analysts and sales people have to produce revenue steadily!), with particularly busy times during May and November.

The Securities Industry in Japan

• Will focus on securities as that is what I know best.
• Brief History: Until the liberalization of the securities industry in 1997-8 with the introduction of “Big Bang” reforms, the industry was mostly closed to foreign participation. (approval vs. registration system) The new reforms, along with the booming global economy, brought about a surge of foreign firms into the arena, with most major European and American houses entering the fray. Merrill Lynch, Morgan Stanley, Deutsche, Paribas, and other firms are some of the names you might have heard. These firms were able to pour money and resources into their Japanese operations, and hired away some of the best local talent at amazing sums of money. Prior to the “gaishikei invasion,” Japanese stockbrokers and analysts seem to have lived mostly like salarymen, with little performance-tied income packages. This new flux of demand created a boom for the translation market, boosting average salaries for experienced translators very high. Japanese firms struggled to adapt. (The top 3 firms are Nomura, Daiwa, and Nikko Cordial securities). The stagnant market has recently forced some firms out of Japan (Merrill closed its domestic retail operation, and is downsizing, while some companies have just picked up and left), and made things a bit more reasonable.
• Current State of the Markets: In a word, fairly bad. The Nikkei, which peaked in 2001 at around 14,000, is currently around 10,500 (as of 7/11/02). We have already seen the Nikkei slip below 10,000 several times in the last year, due to a variety of factors. While it is important to remember that share prices are simply an average price that change daily based on the moods of investors, overall trends in the stock markets, especially among different sectors, are very important.
• After Sept. 11th, we saw a global shift to traditionally “safe” stocks: domestic (w/in Japan) demand related stocks such as foods and real estate, and away from travel and transport-related issues. Currently, accounting fraud worries and poor earnings results in the US market are weighing down Japanese stock markets (as of July 10, 2002). In general, the Japanese stock market is increasingly tied to the US stock market, though domestic news on company bankruptcies, government policies, and macroeconomic news influences it, too.
• In addition, increased foreign participation in the market (more foreign stockholders at Japanese companies, some with rates as high as 50%) has made it essential for Japanese companies to court foreign investors. The overall percentage of foreign investors holding Japanese stocks reached its highest level in 2001, at around 18%. Foreign investors seek a variety of things in Japanese stocks: value (many stocks are below book value), growth (unique technologies, patents), and diversity (need to diversify portfolio outside of US). Japan’s economy, while in the doldrums, is still the second largest in the world, and has a highly developed and fairly trustworthy equities market. Many foreign fund managers devote billions of USD to Japanese stocks. These are our ideal customers.
• Why should the financial translator care about the markets? The news mentions the Nikkei 500 Index, forex rates (FOReign EXchange Market rates), and interest rates on bonds every day, but how many of us actually understand it? In financial translation, especially securities, the stock market has a huge impact on the tone of the reports. Securities, and IR translators indeed, should have a good grasp of general market trends. Securities translators, due to the constantly changing and specific (micro-oriented) nature of the work, need updated and precise information on trends at specific Japanese companies, usually major listed ones. IR translators need to know the trends of the specific companies they work for, as well as specific business issues that could affect earnings and balance sheets. An example of this would be changes in pension accounting rules, the introduction of asset impairment accounting, and other issues. The same issues affect companies across the spectrum in Japan: if you encounter something once, you are bound to encounter it again.
• Sub-sectors within Financial Translation: Financial translation is about companies, and as companies perform a wide range of activities, financial translators must have a broad range of expertise. I translate in a variety of fields: from retail, to chemical companies, telecom, and lately, electronics. I have frequently had the pleasure of searching the Internet for obscure drug names, technology principles, and uniquely Japanese phrases. Some sectors in Japan simply do not exist in other countries, or are very different: the non-bank, 消費者金融 (consumer financing) sector is one example. Different sectors call different financial components different things: 売上 are sales in manufacturing, but revenues in service industries. At the bare minimum, a financial translator should have a good understanding of the processes and technologies in sectors that are most frequently exported: electronics, semiconductors, automotives, and more specifically: components, fiber-optics, and, increasingly, biotech. This knowledge is in addition to the base of financial knowledge a financial translator should have.
• Knowledge Acquisition: So how does a beginning translator start translating financial documents? They look like gibberish to the non-initiated. It took me several weeks on the job before I was able to decipher the jargon or what it meant. Language also differs in Japanese between IR and securities work. At the bare minimum, a good financial translator must have an excellent understanding of written financial Japanese (which is usually poorly written.)
• The best place to start is the Nikkei Shimbun. It is the Wall Street Journal of Japan, and everyone in the industry reads it. However, to the beginner, it can seem overwhelming. In fact, it takes about two-three weeks to start to make sense of the overall picture and trends. I usually scan the pages for about 20-30 minutes in the morning, and refer back to the newspaper if necessary. The online version (Nikkei Interactive) (which I highly recommend subscribing to) has an excellent and prompt English translation version, which usually features translations of the major articles. While the translations cannot always be relied upon for accuracy in terminology, it is a good quick way for native-Es to scan the newspaper after a Japanese reading. Two months of a Nikkei-routine will significantly increase your knowledge.
• Comparative translations: Re-read Japanese and English versions of annual reports. These can usually be found for free on the Japanese and English versions of a company home page. Uniqlo, Sony, and many other companies have very frequently updated home pages. These translations vary in quality from excellent to downright hilarious, but are also an excellent resource.
• Television: World Business Satellite on Tokyo TV, Channel 12. Mon-Friday 11PM-12PM. This is the only all-business related non-cable news program, and is very easy to understand. Macro and micro news is well covered, and it is aimed at general viewers as well as investors, with a good balance of corporate IR and investor information. If you subscribe to Sky Perfect TV, you have a much broader choice: Daiwa runs its own investor TV station, CNBC, Bloomberg (both English and Japanese), and a variety of channels provide global financial news 24-hours a day. This can be overload, but is very useful in a gaining global perspective.
• For those who really like to study, you can take classes in Investments and Accounting in English through Temple University’s Continuing Education program. There are also a number of MBA programs, international, available in Tokyo. Nothing like real industry knowledge.
• In-house sources. These have been a huge resource for me, although this might be limited for freelancers. If you are a beginning freelancer, consider hiring an experienced freelancer as an editor/resource. I did this when I was a beginning translator, and highly recommend it. It allows you to work in a new field with a sort of safety net. Although you do surrender a fee (5-6 yen/word, or per hour), you gain wonderful experience. Make sure you are able to see your own feedback and preferably meet with your freelance mentor.
• Guidelines for Freelancers in the Field: In my company, I also evaluate and check out-sourced translations, and also on a freelance basis.
• Deadlines: In finance translation, time is of the essence: investor information has a 賞味期限, or expiration date, and is of little value three days or a week after it is written. Kessan tanshin also fall under this category, but with a greater leeway for turnaround time. Finally, annual reports, which are professionally printed, have a lag time of a month or two. Generally speaking, investor information demands quick and accurate translation (numbers) as opposed to amazing English prose.
• Meaning: As with all translations, a mistaken or unclear English translation is worse, in my opinion, than a poorly written or grammatically incorrect one. When checking out-sourced translations, I am often pressed for time, and having to retranslate is an added expense. At Daiwa, we use a combination of Japanese native translators and English editors for most of our translations, but my English work is usually edited by a native Japanese speaker for meaning.
• Terminology: If possible, ask for a sample document or terminology list before you start translating. If you are given these documents, stick to the terminology list you are provided with unless something is glaringly wrong. Most companies that produce English documentation have in-house rules and style guides as to how they write fiscal years, numbers, and translate certain phrases. Annual report or tanshin translations that feature long lists of accounting category terminology, company subsidiary names, and other factors. The company’s homepage (English version) is a good place to find information, as many have old versions of tanshin and annual reports available for download. As always, use consistent terminology through a document.
• Common Mistakes: Beginning financial translators frequently have a hard time identifying the proper fiscal year. 当期 means the current fiscal year, 来期 means the next fiscal year. 通期 also means the current fiscal year. The phrasing下期　means 2H of a fiscal year, and 上期 means 1H. The terminology 01/12 期 means FY01 (ending in December). 中期 means interim period or results. 四半期 is quarterly. Companies have different ways of writing fiscal year notation: generally, the less verbose, the better.
• Data in finance is usually compared to data from a previous period: 前期比 is year-on-year, or year-to-year, usually the same thing. Data can be monthly (月次), or quarterly, or half. In English, this can be expressed very simply: Sales rose 3% year-on-year. Monthly sales increased by 10%. (We also say y/y or m/m, or YoY or MoM).
• Common mistakes for words in securities: There are some uniquely financial expressions that give beginning translators a hard time. One is 材料. This does not mean factor or materials: it is essentially just news that investors use to determine an investment decision. Bad news is 悪材料. Another is the distinction between parent（単体）and consolidated (連結）results. These can be expressed simply with these words.
• Some translators often lack basic knowledge of securities, too: A company’s performance is judged on many factors, but one is earnings. A company releases projections (会社計画) as to its future earnings, and investors react if actual earnings (実績、結果)do not meet these earnings. Securities companies release estimates (想定）of company earnings as well. Distinguishing between these three sets of numbers is extremely difficult for some translators, and can greatly affect meaning!
• Sources for Information: The above-mentioned knowledge-based sources are excellent places to start. In addition, the following books are lifeblood for the securities or financial translator: The Japan Company Handbook for the Tokyo Stock Exchange Sections 1 and 2. These books are produced by a number of companies, but I use Toyo Kezai Inc.’s books. They feature official English names of companies, recent earnings trends, share price trends, and very valuable business data (Company website). These books are a translation of the 会社四季報, and both are updated per quarter. A set of these books usually costs around \3000.) The same information is available on the paid English research section of the Nikkei Net Interactive. I use these two resources the most, in addition to in-house translation resources. Many securities companies have internal English web networks available to investors, or at least can send you PDF copies of prior research online. These are the best resources at your disposal for better translation.
• Topics Every Finance Translator Should Understand: This is just a list to get you started, but: P/E or PER ratios (Price to Earnings), EV/EBITDA, fair value, the cross-share holding system (株式持合い), Exchange Traded Funds (ETFs), PCFR (Price Case Flow Ratio), Dividend Yield, PBR (Price to Book Ratio), ROE (Return on Equity), 減損会計 (Asset Impairment Accounting), 国際会計基準、and other “Big-Bang” related accounting changes. This is of course just a short list, and the topics are always changing, but a basic understanding of these mechanics has helped me in my translations. Reading investor-oriented publications ( The Wall Street Journal, The Economist, The Street, CNN-Money, Bloomberg News in your native language (assuming English) is also vital.
• Recent Economic Trends: Markets are currently preoccupied with earnings, but several large trends do exist. 1) A shift in production toward China among manufacturing companies: this leads to a more patents produced by Chinese engineers, and a potential fall off in patent translation/English language translation demand. Japanese industry must cut costs because of its high cost structure, so really only very high precision grade or new technologies are still made in Japan. 2) Japanese companies still have a lead in many areas: semiconductor testers, camera/precision machinery, biotechnology, pharmaceuticals, consumer electronics, game development/design, autos. These are export-driven industries. Strong companies are getting stronger (Toyota, Honda, etc.), while many of the large chip/device makers were hit hard (Hitachi, Fujitsu, etc.) by the downturn in memory prices. Things are looking up now with a semiconductor rebound, but earnings for FY01 were terrible. The real companies to watch for investment are small, trim companies. Few companies will be showing spectacular growth. 3) Japanese banks and life insurance firms are still being hammered by the bad loan problem: little has been done about this structurally, with Japan avoiding crisis by window-dressing or other magic come end-March. More foreign firms will enter this area, and insurance-related translation could be a boom area.

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