PII-35 -- VENTURE COMPANY FILE: NUMBER ONE

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P E R S O N A L I N T E R N A T I O N A L I N V E S T O R
Personal Finance Intelligence for the Tokyo Community
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Personal International Investor
Vol. 35
November 21, 2005 Tokyo

For the full HTML version, go to:
http://japaninc.typepad.com/personal_intl_investor/2005/11/vol35_.html

CONTENTS

+ From the Editor
+ Forex Weekly
+ Yen Watch
+ Events
+ Job Watch

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FROM THE EDITOR

VENTURE COMPANY FILE: NUMBER ONE

This is a new series of articles, covering innovative new companies
in Japan, which I believe will do well and list publicly. Many of these
companies are approachable directly by both interested investors and
prospective business partners, and we encourage readers to make
enquiries wanting to make contact to do so through the foreign liaison
team at TNP Partners (see contact details below).

Note that we do not endorse any of the firms mentioned.

PI R&D Company Limited

Industry: Chemicals
Specialty: Production of Resins
Location: Kawasaki

PI R&D is an early stage chemicals producer which specializes in
producing polyimide resins. The company was started by Hiroshi Itatani,
who has a PhD in Chemistry. Itatani has created a new class of
Polyimides by discovering a way to add an extra receptor molecule
into a standard Polyimide compound. Through this receptor, other
molecules can be attached to change the physical characteristics of
the resin, making it harder, more flexible, light sensitive, highly
insulative, etc.

Itatani's innovation has allowed PI R&D to so far develop about 900 new
resin compounds, from a possible superset of about 2,000 possible
combinations. Of these, PI R&D has been able to successfully identify
5 compounds which have high commercial worth. For example, one is
light sensitive and can be used as a replacement for circuit board
photoresist - used to etch printed circuit boards in electronic products.
The new compound has unique qualities which allow a manufacturer
to reduce the number of exposure-etching steps from 5 to 3, making
circuit boards about 30% cheaper to produce. Considering there are
billions of circuit boards are made worldwide every year, this is a very
significant market. PI R&D is already delivering small orders of this
product.

Another compound has the quality of being able to bend more than one
million times before breaking, as well as having highly insulative
properties. This makes the compound ideal as a resin base for flexible
copper cables found in notebook computers, clamshell cell phones, and
similar folding products.

The company has already started producing small but commercial
quantities of two of the compounds described above, and in June 2005
completed a full scale factory to produce 150 liters a day of the
photoresist compound for the Japanese domestic electronics market.
Manufacturers are so eager to use this product that the entire
production of photoresist has been back-ordered for the next
12 months from orders from just two major printed circuit board
makers in Japan. Other customers wait in the wings for PI R&D
to further step up production.

More information about PI R&D is available from Yutaka Shibata, Manager
of Corporate Communications at Tsunami Network Partners. TNP is one
of Japan's largest independent venture capital funds and is invested in
over 35 early-stage companies with technology and innovative business
practices comparable to that of PI R&D.

Terrie Lloyd
...Investor in Training/

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FOREX WEEKLY

Team Tokyo Forex Weekly
November 17, 2005

Low Yen, High Stocks.

Low Yen, High Stock Prices: Japan and the Asian Economy. With the yen
recently dropping to a 27-month low and the Tokyo stock market high,
what accounts for these seemingly conflicting trends? I scripted an Audio
Interview from NHK's World Weekly Audio cast with guest: Eisuke
Sakakibara (Professor, Keio University.)

Nov.16,Wed.
The Japanese economy is continuing to rise and it is a structural
recovery. Japanese corporate balance sheets are looking much better
than 15 years ago. The average Japanese corporation is in better
shape than the average U.S corporation. Major restructural reform
throughout the 90's has contributed to this.

The boosted Chinese economy has had complementary effects for
the Japanese economy. It is a win/win type of situation with vast
production of exports going to China. Japanese exports have exceeded
US exports to China and Hong Kong. Japan is providing high quality
materials and components to chinese production and assembling
companies.

The rising stock prices will continue but the yen is down and the US
dollar is going up. Foreign investors are heavily investing in the Nikkei,
however because of the zero interest rate, investors appropriate money
in the short term money markets borrowing yen and investing in yen, so
it won't effect the exchange rate. Investors are investing heavily in
foreign currency denominated assets because of the difference in
the interest rates. The US is still raising and will reach 4.5%.

That is why Japanese investors are investing in USD based markets
because of the high return, this has nothing to do with the strenght
of the Japanese economy. Japanese are investing in foreign currency
denominated assets such as the EUR, NZD, AUD, CAD and the USD.

By 2006 the dollar will tumble in the summer due to the twin deficits and
the zero savings base situation. Consumption in the US can not continue
in the robust manner as now. The housing market bubble and the
raising of the fed rates to 5% will likely materialize around the middle
of next year. The dollar could weaken substantially quickly with
a trigger. The Japanese econmy will continue to strenghten provided
that Chinese growth continues at 8%. Japan is set to have a 3% growth
rate in the next year or so. In terms of 2-5 years the Asian currency
rates will strengthen against the US and Euro, but in the short term
the U.S dollar will continue to grow over the next 6 months.

The November 18 APEC meeting will include discussions of the Yen
and Yuan. China has already planned to increased domestic demand,
and balanced export control on textiles. An Asian common currency unit
is set to be favourable but not in the immediate future, however in the
next 40-50 years as the diverse Asian exchange rates will be
consolidated and this is going to be balanced out as market driven
intergration in East Asian trade. We could see a form of common
currency in the next 30 years.

However having said that the high growth of these growing Asian
economies such as China and India will put pressure on resource
consumption such as energy, food and water so sustained controlled
development will have to be addressed.

At the New York close Wednesday 16th, 2005
GBP/USD 1.7179, EURO/USD 1.1679, USD/JPY 119.07, and USD/CHF 1.3242.
USD experienced no follow through on strong TICS, GBP new lows.
Forextv.com commentary.

After a slightly stronger start to the US trading session wednesday
the USD weakened after the European close and traded in very tight
ranges midrange through the IMM close at 2:00 PM CST. Traders
remarked that the USD had ample opportunity to extend its gains today
after the release of a surprisingly strong TICS number but remained
inside established weekly ranges with the exception of the GBP.
Cable finally broke to new 2005 lows after the BOE announced
a disappointing inflation forecast, traders speculating that the BOE will
not raise or lower rates through at least the end of Q1 2006. Cable
weakness probably contributed to the firm tone in the other majors
but some traders are finally conceding that the USD is looking tired
and sloppy・at this point; failing to make highs on TICS data was
certainly widely noticed.

Traders are looking for a 4.5% fed funds rate by February 2006, a pause
in the hike cycle is not widely expected before then. After Philly
Fed Survey tomorrow the USD has nothing more to focus on for the week
and pending any surprises in that data, it looks like the USD will
remain firm for another week.

Team Tokyo Forex Weekly Hot Tip and Chart. USD/JPY dropped 30
points at opening on thursday morning and is fighting resistance.
The USD/GBP to come up.
View Thursday morning's opening rates.

Editor : Jason Bainbridge
callme@tokyo-forex-japan.com

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EVENTS

No events this week.

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JOB WATCH

Brought to you by DaiJob, Inc - providing jobs for bilinguals.
http://www.daijob.com/dj4/tracker/counter?th=pii-toppage

- Data Cabling Manager (Negotiable)
- Settlement Operation IT Manager (Negotiable)
- Bank Operations Processing Senior Administration Support (Negotiable)
- Equities & FI Settlement IT Analyst (Negotiable)
- Equity Derivatives Middle Office Trade Support (Negotiable)

Check out these and other jobs like these here!
http://www.daijob.com/dj4/tracker/counter?th=pii-merumaga

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SUBSCRIBERS: 650 as of November 21, 2005

Edited by Burritt Sabin (editors2@japaninc.com)

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