Jan. 7 (Bloomberg) -- Naoto Kan became Japan’s sixth finance minister in 18 months, tasked with preventing a relapse into the nation’s worst postwar recession as deflation threatens to erode companies’ earnings.
Kan, the 63-year-old deputy prime minister, was named by premier Yukio Hatoyama yesterday in Tokyo to replace Hirohisa Fujii, 77. Fujii stepped down over ill health after battling colleagues to prevent a rise in bond issuance by the world’s biggest sovereign debtor.
Kan is seeking to succeed where his predecessors failed: to reverse a contraction in Japan’s economy that’s left gross domestic product, unadjusted for prices, at the smallest since 1991. Any move to ease fiscal restraint and inject greater stimulus runs the risk of unsettling investors and endangering the nation’s credit rating.
“If the economy slows down, we may get a revised budget or additional spending -- we’ll have to see if Kan can handle these issues without losing fiscal discipline,” said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. in Tokyo, who used to work at the Bank of Japan.
Kan will remain deputy prime minister, Hatoyama told reporters late yesterday. The statement ended days of speculation over the future of Fujii who was hospitalized Dec. 28 for high blood pressure and exhaustion.
Stocks Rise
Investors shrugged off signs of Fujii’s departure, with the Nikkei 225 Stock Average gaining 0.5 percent to 10,731.45 at the close yesterday. Yields on benchmark 10-year notes advanced 1 basis point to 1.335 percent. Nikkei futures expiring in March closed at 10,770 in Chicago yesterday; trading opens today in Singapore at 8:45 a.m. Tokyo time.
Kan’s stature rose as health minister in the 1990s, when he exposed that agency’s role in allowing up to 5,000 Japanese to contract HIV through contaminated blood products. A co-founder of the Democratic Party of Japan, he was later tarnished by revelations he failed to pay his full pension contribution, forcing him to step down as DPJ leader in 2004.
Fujii was the first Cabinet member to depart after the DPJ gained power in September by unseating the Liberal Democratic Party, which dominated the nation’s political landscape for half a century. Hatoyama had asked Fujii, who headed the Finance Ministry in 1993, to postpone retirement and run in the August lower-house election.
Debt Issuance
In the run-up to the Dec. 25 budget unveiling, Fujii had insisted on keeping new bond sales for the next fiscal year around 44 trillion yen ($480 billion), the same as the previous government budgeted for the year ending in March. Takahide Kiuchi, chief economist at Nomura Securities Co. in Tokyo, said it’s unclear whether Kan will hew to such a stance.
“Kan may shift to the fiscal and economic policies that focus more on the economy, compared with Fujii who tends to put more focus on fiscal discipline,” said Kiuchi, who was ranked the nation’s top economist by Nikkei Research Inc. in March.
Japan is poised this year to lose its title as world’s second-largest economy, with China projected by the International Monetary Fund to slot behind the U.S. The country, with a shrinking population and trenchant deflation that’s seen 13 years of price declines since 1994, may face a jump in its debt to 246 percent of GDP by 2014, according to the IMF.
Sony Corp. Vice Chairman Ryoji Chubachi warned this week that deflation, squeezing companies’ earnings, may cause a “double-dip” recession this year.
Deflation Fight
The deputy prime minister has been vocal in recent months in discussing the nation’s economic challenges, pressing the Bank of Japan to step up its efforts to end deflation, and favoring a retreat in the yen’s exchange rate that threatened exporters.
On Dec. 17, he said that a weaker Japanese currency was “favorable” and that he was glad that it had fallen from the previous month’s 14-year peak.
Fujii roiled traders after taking office in September by indicating he favored a stronger yen, as part of the DPJ-led government’s campaign to bolster households’ spending power. He said in September it’s “absurd” that a lower exchange rate helps exporters, and that market interventions can “destroy a free economy.” After the yen soared, he warned in November that Japan was ready to act to stem “abnormal” currency movements.
“Kan is likely to continue the shift from strong to weak yen policy,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi in London. “On balance we believe Kan’s appointment will be at the margin yen-negative -- through raising political and fiscal uncertainty.”
Yen Trading
Japan’s currency dropped 0.8 percent to 92.45 per dollar as of noon in London, about 9 percent lower than its 14-year high of 84.83 reached on Nov. 27. The Finance Ministry, through the Bank of Japan, is in charge of deciding on yen purchases or sales, and officials haven’t intervened since 2004.
One of Hatoyama’s campaign pledges was to lessen the power of bureaucrats and give elected politicians greater sway over policymaking. Fujii, a veteran Finance Ministry budget examiner, had been perceived as a less combative pick for that post. By contrast, Kan took on bureaucrats as health minister in 1996, forcing them to surrender documents on the blood scandal.
The new finance chief was born in Yamaguchi, western Japan, and went to high school in Tokyo. He earned a bachelor’s degree in applied physics at the Tokyo Institute of Technology, and became a patent attorney before entering politics.
DPJ Co-Founder
Kan and Hatoyama helped found the DPJ in 1998. Kan told reporters in July 1996 that he was seeking “to work with politicians who will control the executive branch with the backing of the people.”
Remaining as deputy premier risks stretching Kan’s portfolio too far, Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo, said before the appointment.
Hatoyama earlier yesterday urged ailing Fujii to stay in his post. He later told reporters that “given concerns over his health, there was nothing else to be done. I had to accept his resignation.”
“It goes without saying that Finance Minister Fujii was the primary person in formulating the budget, but Deputy Prime Minister Kan was closest in giving support,” Hatoyama said. “I have no worries in Kan being able to do this.”
The personnel reshuffle comes as Hatoyama’s popularity falls. His Cabinet had an approval rating of 50 percent in a Dec. 25-27 poll by Nikkei Inc. and TV Tokyo Corp., down from 75 percent backing in mid-September.
The Diet is scheduled to convene later this month, when Kan will face lawmakers’ questions over the proposed budget. Finance ministers and central bank governors from the Group of Seven industrial nations are scheduled to gather in Canada next month.
Kan told reporters yesterday he will tackle “various issues aggressively,” and pledged to make sure the proposed 92.3 trillion yen 2010 budget is passed by the Diet.
Wednesday, January 6, 2010
Tuesday, January 5, 2010
Buffett Reins In Kraft Over Cadbury Deal, Recalls Coke's Quaker Oats Offer • Greece Faces Budget Credibility Test as EU's Officials Sw
Jan. 6 (Bloomberg) -- U.K. consumer confidence fell in December by the most in more than a year as expectations for the economy deteriorated, Nationwide Building Society said.
The index of consumer sentiment declined five points from the previous month to 69, the biggest drop since November 2008, the customer-owned lender said in an e-mailed statement today. A measure of consumers’ economic expectations in the next six months fell eight points to 101.
With December marking the annual Christmas season peak for shopping, the report may signal a setback for retail spending as consumers brace for higher taxes to curb Britain’s record budget deficit. Prime Minister Gordon Brown is trying to revive the economy and restore support among voters in time for an election due by June.
“An element of caution may have begun to creep back into the minds of consumers,” Nationwide Chief Economist Martin Gahbauer said in the statement. “Lower expectations may foreshadow a more sluggish consumer outlook in 2010 as stimulus measures are withdrawn.”
A gauge of whether consumers think it’s a good time to make big purchases dropped to 106 last month from 107 in November, Nationwide said.
Chancellor of the Exchequer Alistair Darling said last month he will require higher tax contributions next year. This month, value-added tax returned to 17.5 percent from 15 percent, reversing a year-old measure. The Conservative opposition had a 10 percentage-point lead over Brown’s Labour Party in a YouGov Plc poll released Jan. 1.
Tax Impact
“The looming VAT hike and other tax changes announced in the pre-budget report may have impacted on confidence in December, forcing people to review their expectations for the future,” Gahbauer said.
Unemployment growth is still slowing as the economy revives. A separate report today by KPMG and the Recruitment and Employment Federation showed that a measure of hiring for permanent jobs grew at the fastest pace since July 2007 in December, rising to 62.8 from 61.7 the previous month.
Meanwhile, prices of goods in U.K. shops advanced 2.2 percent in December from a year earlier after a 0.2 percent increase the previous month, the British Retail Consortium said in a separate report today. Food prices rose an annual 3.7 percent while non-food prices gained 1.4 percent.
The Bank of England will maintain its program of purchasing bonds with newly-created money at 200 billion pounds on Jan. 7, according to all 35 economists in a Bloomberg News survey. Policy makers will also keep the benchmark interest rate at a record low of 0.5 percent, 53 economists said.
To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net.
Last Updated: January 5, 2010 19:01 EST
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* Yahoo! Buzz Jan. 6 (Bloomberg) -- U.K. consumer confidence fell in December by the most in more than a year as expectations for the economy deteriorated, Nationwide Building Society said.
The index of consumer sentiment declined five points from the previous month to 69, the biggest drop since November 2008, the customer-owned lender said in an e-mailed statement today. A measure of consumers’ economic expectations in the next six months fell eight points to 101.
With December marking the annual Christmas season peak for shopping, the report may signal a setback for retail spending as consumers brace for higher taxes to curb Britain’s record budget deficit. Prime Minister Gordon Brown is trying to revive the economy and restore support among voters in time for an election due by June.
“An element of caution may have begun to creep back into the minds of consumers,” Nationwide Chief Economist Martin Gahbauer said in the statement. “Lower expectations may foreshadow a more sluggish consumer outlook in 2010 as stimulus measures are withdrawn.”
A gauge of whether consumers think it’s a good time to make big purchases dropped to 106 last month from 107 in November, Nationwide said.
Chancellor of the Exchequer Alistair Darling said last month he will require higher tax contributions next year. This month, value-added tax returned to 17.5 percent from 15 percent, reversing a year-old measure. The Conservative opposition had a 10 percentage-point lead over Brown’s Labour Party in a YouGov Plc poll released Jan. 1.
Tax Impact
“The looming VAT hike and other tax changes announced in the pre-budget report may have impacted on confidence in December, forcing people to review their expectations for the future,” Gahbauer said.
Unemployment growth is still slowing as the economy revives. A separate report today by KPMG and the Recruitment and Employment Federation showed that a measure of hiring for permanent jobs grew at the fastest pace since July 2007 in December, rising to 62.8 from 61.7 the previous month.
Meanwhile, prices of goods in U.K. shops advanced 2.2 percent in December from a year earlier after a 0.2 percent increase the previous month, the British Retail Consortium said in a separate report today. Food prices rose an annual 3.7 percent while non-food prices gained 1.4 percent.
The Bank of England will maintain its program of purchasing bonds with newly-created money at 200 billion pounds on Jan. 7, according to all 35 economists in a Bloomberg News survey. Policy makers will also keep the benchmark interest rate at a record low of 0.5 percent, 53 economists said.
The index of consumer sentiment declined five points from the previous month to 69, the biggest drop since November 2008, the customer-owned lender said in an e-mailed statement today. A measure of consumers’ economic expectations in the next six months fell eight points to 101.
With December marking the annual Christmas season peak for shopping, the report may signal a setback for retail spending as consumers brace for higher taxes to curb Britain’s record budget deficit. Prime Minister Gordon Brown is trying to revive the economy and restore support among voters in time for an election due by June.
“An element of caution may have begun to creep back into the minds of consumers,” Nationwide Chief Economist Martin Gahbauer said in the statement. “Lower expectations may foreshadow a more sluggish consumer outlook in 2010 as stimulus measures are withdrawn.”
A gauge of whether consumers think it’s a good time to make big purchases dropped to 106 last month from 107 in November, Nationwide said.
Chancellor of the Exchequer Alistair Darling said last month he will require higher tax contributions next year. This month, value-added tax returned to 17.5 percent from 15 percent, reversing a year-old measure. The Conservative opposition had a 10 percentage-point lead over Brown’s Labour Party in a YouGov Plc poll released Jan. 1.
Tax Impact
“The looming VAT hike and other tax changes announced in the pre-budget report may have impacted on confidence in December, forcing people to review their expectations for the future,” Gahbauer said.
Unemployment growth is still slowing as the economy revives. A separate report today by KPMG and the Recruitment and Employment Federation showed that a measure of hiring for permanent jobs grew at the fastest pace since July 2007 in December, rising to 62.8 from 61.7 the previous month.
Meanwhile, prices of goods in U.K. shops advanced 2.2 percent in December from a year earlier after a 0.2 percent increase the previous month, the British Retail Consortium said in a separate report today. Food prices rose an annual 3.7 percent while non-food prices gained 1.4 percent.
The Bank of England will maintain its program of purchasing bonds with newly-created money at 200 billion pounds on Jan. 7, according to all 35 economists in a Bloomberg News survey. Policy makers will also keep the benchmark interest rate at a record low of 0.5 percent, 53 economists said.
To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net.
Last Updated: January 5, 2010 19:01 EST
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* Yahoo! Buzz Jan. 6 (Bloomberg) -- U.K. consumer confidence fell in December by the most in more than a year as expectations for the economy deteriorated, Nationwide Building Society said.
The index of consumer sentiment declined five points from the previous month to 69, the biggest drop since November 2008, the customer-owned lender said in an e-mailed statement today. A measure of consumers’ economic expectations in the next six months fell eight points to 101.
With December marking the annual Christmas season peak for shopping, the report may signal a setback for retail spending as consumers brace for higher taxes to curb Britain’s record budget deficit. Prime Minister Gordon Brown is trying to revive the economy and restore support among voters in time for an election due by June.
“An element of caution may have begun to creep back into the minds of consumers,” Nationwide Chief Economist Martin Gahbauer said in the statement. “Lower expectations may foreshadow a more sluggish consumer outlook in 2010 as stimulus measures are withdrawn.”
A gauge of whether consumers think it’s a good time to make big purchases dropped to 106 last month from 107 in November, Nationwide said.
Chancellor of the Exchequer Alistair Darling said last month he will require higher tax contributions next year. This month, value-added tax returned to 17.5 percent from 15 percent, reversing a year-old measure. The Conservative opposition had a 10 percentage-point lead over Brown’s Labour Party in a YouGov Plc poll released Jan. 1.
Tax Impact
“The looming VAT hike and other tax changes announced in the pre-budget report may have impacted on confidence in December, forcing people to review their expectations for the future,” Gahbauer said.
Unemployment growth is still slowing as the economy revives. A separate report today by KPMG and the Recruitment and Employment Federation showed that a measure of hiring for permanent jobs grew at the fastest pace since July 2007 in December, rising to 62.8 from 61.7 the previous month.
Meanwhile, prices of goods in U.K. shops advanced 2.2 percent in December from a year earlier after a 0.2 percent increase the previous month, the British Retail Consortium said in a separate report today. Food prices rose an annual 3.7 percent while non-food prices gained 1.4 percent.
The Bank of England will maintain its program of purchasing bonds with newly-created money at 200 billion pounds on Jan. 7, according to all 35 economists in a Bloomberg News survey. Policy makers will also keep the benchmark interest rate at a record low of 0.5 percent, 53 economists said.
Australian December Services Industry Stalls on Rate Increases
Jan. 6 (Bloomberg) -- Australia’s services industry stalled in December as companies reported a slump in new orders and suppliers cut deliveries.
The performance of services index fell 2.5 points to 50 from November, when it dropped 2.3 points, Commonwealth Bank of Australia and the Australian Industry Group said in Sydney today. A figure below 50 indicates the industry is shrinking.
Weakening demand for services follows central bank Governor Glenn Stevens’s decision to raise the benchmark lending rate on Dec. 1 for an unprecedented third straight month. Specialty Fashion Group Ltd., an Australian clothing retailer, said today that trading over the Christmas to New Year holiday period was “tough.”
Today’s report “confirms that the recent improvement in the services sector lacks traction and adds weight to arguments for a pause to interest rates,” said Australian Industry Group Chief Executive Heather Ridout.
The index rose in October to the highest level in 19 months before falling in November and last month.
“The business environment remains a challenge for many firms, particularly those in the consumer-related sectors of retail trade,” Ridout said.
Rising retail sales in the first 10 months of last year helped the nation’s economy skirt the global recession after the government distributed more than A$20 billion ($18 billion) in cash to households and the central bank slashed borrowing costs to a half-century low of 3 percent in April. Most of the handouts were completed in the first half of 2009.
Rate Increases
The Reserve Bank began the first of three straight monthly interest-rate increases in October, taking the benchmark rate to 3.75 percent last month.
“Christmas 2009 trading was more challenging than in 2008, with the discounting in the market being more aggressive than we have seen for many years,” Gary Perlstein, chief executive officer at Specialty Fashion, said in a statement today.
“This may be the first indication that there will be more difficult trading conditions” in the first half of 2010, “when consumers will not be receiving government handouts and interest rates are on the rise.”
Investors are betting there is a 48 percent chance of a quarter-point increase in the benchmark lending rate to 4 percent at the central bank’s next meeting on Feb. 2, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 7:28 a.m. Chances of a quarter-point move in March are at 92 percent.
Today’s report, which is based on a poll of about 200 companies, is similar to the U.S. non-manufacturing ISM index.
The report measures sales, new orders, deliveries, inventories and employment for companies such as banks, real estate agents, insurers, restaurants, transport firms and retailers to compile the overall performance of services index.
The performance of services index fell 2.5 points to 50 from November, when it dropped 2.3 points, Commonwealth Bank of Australia and the Australian Industry Group said in Sydney today. A figure below 50 indicates the industry is shrinking.
Weakening demand for services follows central bank Governor Glenn Stevens’s decision to raise the benchmark lending rate on Dec. 1 for an unprecedented third straight month. Specialty Fashion Group Ltd., an Australian clothing retailer, said today that trading over the Christmas to New Year holiday period was “tough.”
Today’s report “confirms that the recent improvement in the services sector lacks traction and adds weight to arguments for a pause to interest rates,” said Australian Industry Group Chief Executive Heather Ridout.
The index rose in October to the highest level in 19 months before falling in November and last month.
“The business environment remains a challenge for many firms, particularly those in the consumer-related sectors of retail trade,” Ridout said.
Rising retail sales in the first 10 months of last year helped the nation’s economy skirt the global recession after the government distributed more than A$20 billion ($18 billion) in cash to households and the central bank slashed borrowing costs to a half-century low of 3 percent in April. Most of the handouts were completed in the first half of 2009.
Rate Increases
The Reserve Bank began the first of three straight monthly interest-rate increases in October, taking the benchmark rate to 3.75 percent last month.
“Christmas 2009 trading was more challenging than in 2008, with the discounting in the market being more aggressive than we have seen for many years,” Gary Perlstein, chief executive officer at Specialty Fashion, said in a statement today.
“This may be the first indication that there will be more difficult trading conditions” in the first half of 2010, “when consumers will not be receiving government handouts and interest rates are on the rise.”
Investors are betting there is a 48 percent chance of a quarter-point increase in the benchmark lending rate to 4 percent at the central bank’s next meeting on Feb. 2, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 7:28 a.m. Chances of a quarter-point move in March are at 92 percent.
Today’s report, which is based on a poll of about 200 companies, is similar to the U.S. non-manufacturing ISM index.
The report measures sales, new orders, deliveries, inventories and employment for companies such as banks, real estate agents, insurers, restaurants, transport firms and retailers to compile the overall performance of services index.
Monday, January 4, 2010
Asian Stocks Gain on U.S. Manufacturing Report, Commodities
Jan. 5 (Bloomberg) -- Asian stocks rose, led by electronics and mining companies, after U.S. manufacturing expanded at the fastest pace in more than three years and commodity prices advanced.
Sony Corp., Japan’s biggest exporter of televisions, rose 1.3 percent. Mitsubishi Corp., a Japanese trading company that gets 39 percent of its sales from commodities, added 3.1 percent on higher oil and metal prices. STX Pan Ocean Co., South Korea’s biggest bulk carrier, climbed 3.1 percent after a gauge of shipping rates advanced.
“We can see from the positive U.S. economic data and rising commodity prices that there is a strong anticipation of a global self-sustaining recovery,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
The MSCI Asia Pacific Index advanced 0.7 percent to 122.87 as of 9:58 a.m. in Tokyo. The gauge climbed 34 percent last year as lower interest rates and stimulus measures shored up the global economy.
Japan’s Nikkei 225 Stock Average added 0.8 percent, while the S&P/ASX 200 Index gained 1 percent in Sydney.
Futures on the S&P 500 fell 0.1 percent. The gauge rose 1.6 percent in New York yesterday, the most since Nov. 9, after the Institute for Supply Management said its factory index rose to 55.9, the highest level since April 2006. The median estimate by economists was 54.3. Readings greater than 50 signal expansion.
Stocks around the world rallied last year on signs economies were recovering from the credit crisis. The MSCI Asia Pacific Index’s 2009 advance outpaced gains of 23 percent by the Standard & Poor’s 500 Index and 28 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the gauge are valued at an average of 20 times estimated earnings, compared with 18 times for the S&P and 13 for the Stoxx.
Raw-material producers and energy companies accounted for 22 percent of the MSCI Asia Pacific Index’s advance today, with Mitsubishi gaining 3.1 percent to 2,390 yen.
Crude oil for February delivery rose 2.7 percent to $81.51 a barrel in New York yesterday, the highest settlement since October 2008, as freezing weather and improving global economies bolstered the outlook for fuel demand. Gold prices surged the most in two months, or 2 percent, and copper futures for March delivery climbed 1.8 percent.
In Seoul, STX Pan Ocean climbed 3.1 percent to 11,650 won after the Baltic Dry Index, a measure of shipping costs for commodities, jumped 4.5 percent in London yesterday, the first gain since Dec. 4.
Sony Corp., Japan’s biggest exporter of televisions, rose 1.3 percent. Mitsubishi Corp., a Japanese trading company that gets 39 percent of its sales from commodities, added 3.1 percent on higher oil and metal prices. STX Pan Ocean Co., South Korea’s biggest bulk carrier, climbed 3.1 percent after a gauge of shipping rates advanced.
“We can see from the positive U.S. economic data and rising commodity prices that there is a strong anticipation of a global self-sustaining recovery,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
The MSCI Asia Pacific Index advanced 0.7 percent to 122.87 as of 9:58 a.m. in Tokyo. The gauge climbed 34 percent last year as lower interest rates and stimulus measures shored up the global economy.
Japan’s Nikkei 225 Stock Average added 0.8 percent, while the S&P/ASX 200 Index gained 1 percent in Sydney.
Futures on the S&P 500 fell 0.1 percent. The gauge rose 1.6 percent in New York yesterday, the most since Nov. 9, after the Institute for Supply Management said its factory index rose to 55.9, the highest level since April 2006. The median estimate by economists was 54.3. Readings greater than 50 signal expansion.
Stocks around the world rallied last year on signs economies were recovering from the credit crisis. The MSCI Asia Pacific Index’s 2009 advance outpaced gains of 23 percent by the Standard & Poor’s 500 Index and 28 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the gauge are valued at an average of 20 times estimated earnings, compared with 18 times for the S&P and 13 for the Stoxx.
Raw-material producers and energy companies accounted for 22 percent of the MSCI Asia Pacific Index’s advance today, with Mitsubishi gaining 3.1 percent to 2,390 yen.
Crude oil for February delivery rose 2.7 percent to $81.51 a barrel in New York yesterday, the highest settlement since October 2008, as freezing weather and improving global economies bolstered the outlook for fuel demand. Gold prices surged the most in two months, or 2 percent, and copper futures for March delivery climbed 1.8 percent.
In Seoul, STX Pan Ocean climbed 3.1 percent to 11,650 won after the Baltic Dry Index, a measure of shipping costs for commodities, jumped 4.5 percent in London yesterday, the first gain since Dec. 4.
Japanese Stocks Advance on U.S. Manufacturing, Commodity Prices
Jan. 5 (Bloomberg) -- Japanese stocks rose for a second day, led by electronics makers and commodities traders after U.S. manufacturing climbed more than estimated and prices of oil and metals gained.
Sony Corp., Japan’s biggest exporter of televisions, added 1.6 percent. Mitsubishi Corp., the nation’s biggest trading company, climbed 3.1 percent, and Inpex Corp., its largest oil explorer, added 2.2 percent. Nippon Yusen K.K., Japan’s biggest shipping line, climbed 2.5 percent after a measure of cargo rates gained for the first time in a month.
“We can see from the positive U.S. economic data and rising commodity prices that there is a strong anticipation of a global self-sustaining recovery,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
Japan’s Nikkei 225 rose 0.8 percent to 10,743.72 as of 9:31 a.m. in Tokyo, headed for its highest close since October 2008. The broader Topix index climbed 1 percent to 925.30, with about four stocks rising for each that fell.
The Topix climbed 5.6 percent last year, the lowest return among benchmark indexes for the world’s 40 largest stock markets. Stocks in the gauge are valued at an average of 36 times estimated earnings, compared with 18 times for the Standard & Poor’s 500 Index in the U.S. and 13 times for the Dow Jones Stoxx 600 Index in Europe.
The S&P 500 added 1.6 percent in New York yesterday after the Tempe, Arizona-based Institute for Supply Management said its factory index, a measure of U.S. manufacturing, rose to 55.9, the highest level since April 2006. The median forecast by economists was 54.3. Readings greater than 50 signal expansion.
Electronics, Commodities
Sony climbed 1.6 percent to 2,775 yen. Hitachi Ltd., a maker of industrial equipment which receives more than 40 percent of its revenue overseas, rose 0.7 percent to 288 yen.
Crude oil for February delivery rose 2.7 percent in New York yesterday, the highest close in more than 14 months, as freezing weather and improving global economies bolstered the outlook for fuel demand. Gold prices surged the most in two months, or 2 percent, and copper futures for March delivery climbed 1.8 percent to a 16-month high.
Inpex gained 2.2 percent to 731,000 yen. Mitsubishi Corp. jumped 3.1 percent to 2,389 yen and was the biggest contributor to the Topix’s advance. Itochu Corp., Japan’s No. 4 trading company by market value, added 3.3 percent to 717 yen.
Shipping lines gained the most among the 33 industry groups in the Topix after the Baltic Dry Index, a benchmark for commodity cargo rates, added 4.5 percent yesterday in London, the first increase since Dec. 4. Nippon Yusen climbed 2.5 percent to 293 yen. Mitsui O.S.K. Lines Ltd., the operator of the world’s largest merchant fleet, added 2.6 percent to 505 yen. Kawasaki Kisen Kaisha Ltd. advanced 3 percent to 277 yen.
Sony Corp., Japan’s biggest exporter of televisions, added 1.6 percent. Mitsubishi Corp., the nation’s biggest trading company, climbed 3.1 percent, and Inpex Corp., its largest oil explorer, added 2.2 percent. Nippon Yusen K.K., Japan’s biggest shipping line, climbed 2.5 percent after a measure of cargo rates gained for the first time in a month.
“We can see from the positive U.S. economic data and rising commodity prices that there is a strong anticipation of a global self-sustaining recovery,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
Japan’s Nikkei 225 rose 0.8 percent to 10,743.72 as of 9:31 a.m. in Tokyo, headed for its highest close since October 2008. The broader Topix index climbed 1 percent to 925.30, with about four stocks rising for each that fell.
The Topix climbed 5.6 percent last year, the lowest return among benchmark indexes for the world’s 40 largest stock markets. Stocks in the gauge are valued at an average of 36 times estimated earnings, compared with 18 times for the Standard & Poor’s 500 Index in the U.S. and 13 times for the Dow Jones Stoxx 600 Index in Europe.
The S&P 500 added 1.6 percent in New York yesterday after the Tempe, Arizona-based Institute for Supply Management said its factory index, a measure of U.S. manufacturing, rose to 55.9, the highest level since April 2006. The median forecast by economists was 54.3. Readings greater than 50 signal expansion.
Electronics, Commodities
Sony climbed 1.6 percent to 2,775 yen. Hitachi Ltd., a maker of industrial equipment which receives more than 40 percent of its revenue overseas, rose 0.7 percent to 288 yen.
Crude oil for February delivery rose 2.7 percent in New York yesterday, the highest close in more than 14 months, as freezing weather and improving global economies bolstered the outlook for fuel demand. Gold prices surged the most in two months, or 2 percent, and copper futures for March delivery climbed 1.8 percent to a 16-month high.
Inpex gained 2.2 percent to 731,000 yen. Mitsubishi Corp. jumped 3.1 percent to 2,389 yen and was the biggest contributor to the Topix’s advance. Itochu Corp., Japan’s No. 4 trading company by market value, added 3.3 percent to 717 yen.
Shipping lines gained the most among the 33 industry groups in the Topix after the Baltic Dry Index, a benchmark for commodity cargo rates, added 4.5 percent yesterday in London, the first increase since Dec. 4. Nippon Yusen climbed 2.5 percent to 293 yen. Mitsui O.S.K. Lines Ltd., the operator of the world’s largest merchant fleet, added 2.6 percent to 505 yen. Kawasaki Kisen Kaisha Ltd. advanced 3 percent to 277 yen.
Sunday, January 3, 2010
U.S., U.K. Close Yemen Embassies; Brown Cites ‘Failing State’
Jan. 4 (Bloomberg) -- The U.S. and U.K. closed their embassies in Yemen, citing threats of attacks, as officials voiced concern over al-Qaeda’s presence in what British Prime Minister Gordon Brown called a “failing state.”
White House counterterrorism chief John Brennan said intelligence indicated that al-Qaeda plans attacks in Sana’a, the capital, “possibly against our embassy, possibly against U.S. personnel.” Shutting the embassy “was the prudent thing to do,” Brennan said yesterday on ABC’s “This Week” program.
The U.K. and U.S. are offering more security aid for Yemen, an impoverished Arabian Peninsula nation which is emerging as a base for al-Qaeda attacks as the terrorist group comes under pressure in Pakistan and Afghanistan.
U.K. Prime Minister Brown, who called Yemen a “failing state” in an interview with the British Broadcasting Corp. yesterday, will convene a Jan. 28 aid conference on Yemen in London at which the U.K. will seek to enlist support from oil- rich Gulf nations.
The Yemen branch of al-Qaeda claimed responsibility for the Dec. 25 attack, in which Nigerian Umar Farouk Abdulmutallab was charged with trying to blow up a Northwest Airlines flight with 278 passengers.
The failed attack prompted the U.S. Transportation Security Administration to issue new rules yesterday calling for “enhanced screening” of U.S.-bound air travelers who have passed through “countries of interest,” as well as requiring random checks on other international flights.
Other Attacks Feared
Brennan, President Barack Obama’s assistant for homeland security and counterterrorism, said there are “probably several hundred” al-Qaeda members in Yemen and the U.S. worries they may be training other operatives for attacks in the U.S. and elsewhere similar to the one attempted by Abdulmutallab.
“We’re not going to take any chances with the lives of our diplomats and others” at the American embassy, Brennan said on “Fox News Sunday,” one of four Sunday news shows on which he appeared.
Asked if American troops might be sent to Yemen, Brennan said: “We’re not talking about that at this point at all.”
“The Yemeni government has demonstrated their willingness to take the fight to al-Qaeda,” Brennan said. “They’re willing to accept our support. We’re providing them everything that they’ve asked for.”
The embassy closures came a day after the top U.S. general in the region, David Petraeus, paid an unannounced visit to Yemen and pledged more assistance in combating terrorism.
Doubling U.S. Aid
Petraeus, in talks Jan. 2 in Sana’a with President Ali Abdullah Saleh, reaffirmed the U.S. commitment to support anti- terrorism efforts in Yemen, the Yemeni presidency said in a statement on its Web site. Petraeus told reporters in Baghdad on Jan. 1 that the U.S. in fiscal 2010 will almost double last year’s $70 million in security aid for Yemen.
“The Yemeni president and parliament take this threat very seriously,” Petraeus, the top U.S. commander in the Middle East and Central Asia, said in Baghdad. “And that is of enormous significance, especially in a country facing such challenges.”
The London conference should concentrate on Yemen’s $11 billion development needs as well as anti-terrorism assistance, Deputy Minister for Planning and International Cooperation Hisham Sharaf said by phone from Sana’a yesterday.
A November 2006 donors’ conference in London led to pledges of $5.7 billion in aid for Yemen, almost half from Gulf nations, of which only $415 million has been received, Sharaf said.
“What is needed is a long-term aid strategy,” said Mustafa Alani, a regional security expert from the Dubai-based Gulf Research Center. “It would be wrong to focus only on security and counterterrorism.”
Other Challenges
Yemen is also struggling to subdue both an insurgency by northern Shiite Muslim rebels that has drawn in neighboring Saudi Arabia, a key U.S. ally, and a secessionist movement in the south. It is the poorest Arab nation and the government expects oil reserves that fund 70 percent of the budget to run out over the next decade.
Obama and Brown agreed to fund a police unit in Yemen to target terrorism and will support coast guard operations in the Arabian Peninsula nation, according to an e-mailed statement from the two governments yesterday.
Yemen said Dec. 24 it had foiled an al-Qaeda attack on the U.K. embassy a week earlier modeled on a twin suicide car bombing on the U.S. embassy in September 2008 that killed 17 people, including seven security guards and seven attackers.
Al-Qaeda Base
Yemen has become an increasingly important base for al- Qaeda, Yemeni Foreign Minister Abu Bakr al-Qirbi said on Dec. 29.
Abdulmutallab, a 23-year-old, spent about three months in Yemen before leaving the country in early December. He told U.S. investigators that in Yemen he received training and the bomb- making materials he used in his attempt to blow up the airliner.
Brennan said U.S. intelligence agencies had “snippets” of information that were recognized “in hindsight” to be related to the failed attack. There was a “failure to integrate and piece together those bits of information,” he said.
The top Republican on the Senate Intelligence Committee, Kit Bond of Missouri, said the U.S. national security system failed.
“With all of the leads dangling out there, somebody screwed up by not reporting it,” said Bond. In addition, the airport screening “was a disaster,” he said.
The Intelligence Committee, one of several congressional panels planning investigations of the incident, will hold a hearing Jan. 21. Bond, appearing yesterday on Fox, said there are no grounds at this point to fire Homeland Security Secretary Janet Napolitano, National Intelligence Director Dennis Blair or Leon Panetta, head of the Central Intelligence Agency.
Other Criticism
Other Republicans criticized the Democratic Obama administration’s anti-terrorism efforts.
“What we had in this case was a failure to act on a very credible report from the terrorist’s father that should, at the very least, have caused the State Department to revoke his visa,” Senator Susan Collins, a Maine Republican, said on “This Week.” Abdulmutallab’s father warned officials at the U.S. embassy in Nigeria that he was worried about his son’s extremist views, U.S. authorities said.
“Why wasn’t this individual’s visa revoked once we had such a credible report that he posed a threat?” Collins said.
She said it is “unacceptable” that there is no screening system in place to detect the explosive used in the Christmas Day incident, even eight years after would-be shoe-bomber Richard Reid used “the exact same explosive.”
Enemy Combatant
Senator Jim DeMint, a South Carolina Republican, said the U.S. “probably lost valuable information” by not viewing the attempted airline bombing as an act of war and the suspect as an enemy combatant.
“If we had treated this Christmas Day bomber as a terrorist, he would have immediately been interrogated military- style, rather than given the rights of an American and lawyers,” DeMint said on CNN.
Democratic Senator Claire McCaskill of Missouri, also appearing on CNN, said it is “unfair and, frankly, political to take pot shots at the president as we respond to this failure in our systems that we’ve got to get fixed.”
White House counterterrorism chief John Brennan said intelligence indicated that al-Qaeda plans attacks in Sana’a, the capital, “possibly against our embassy, possibly against U.S. personnel.” Shutting the embassy “was the prudent thing to do,” Brennan said yesterday on ABC’s “This Week” program.
The U.K. and U.S. are offering more security aid for Yemen, an impoverished Arabian Peninsula nation which is emerging as a base for al-Qaeda attacks as the terrorist group comes under pressure in Pakistan and Afghanistan.
U.K. Prime Minister Brown, who called Yemen a “failing state” in an interview with the British Broadcasting Corp. yesterday, will convene a Jan. 28 aid conference on Yemen in London at which the U.K. will seek to enlist support from oil- rich Gulf nations.
The Yemen branch of al-Qaeda claimed responsibility for the Dec. 25 attack, in which Nigerian Umar Farouk Abdulmutallab was charged with trying to blow up a Northwest Airlines flight with 278 passengers.
The failed attack prompted the U.S. Transportation Security Administration to issue new rules yesterday calling for “enhanced screening” of U.S.-bound air travelers who have passed through “countries of interest,” as well as requiring random checks on other international flights.
Other Attacks Feared
Brennan, President Barack Obama’s assistant for homeland security and counterterrorism, said there are “probably several hundred” al-Qaeda members in Yemen and the U.S. worries they may be training other operatives for attacks in the U.S. and elsewhere similar to the one attempted by Abdulmutallab.
“We’re not going to take any chances with the lives of our diplomats and others” at the American embassy, Brennan said on “Fox News Sunday,” one of four Sunday news shows on which he appeared.
Asked if American troops might be sent to Yemen, Brennan said: “We’re not talking about that at this point at all.”
“The Yemeni government has demonstrated their willingness to take the fight to al-Qaeda,” Brennan said. “They’re willing to accept our support. We’re providing them everything that they’ve asked for.”
The embassy closures came a day after the top U.S. general in the region, David Petraeus, paid an unannounced visit to Yemen and pledged more assistance in combating terrorism.
Doubling U.S. Aid
Petraeus, in talks Jan. 2 in Sana’a with President Ali Abdullah Saleh, reaffirmed the U.S. commitment to support anti- terrorism efforts in Yemen, the Yemeni presidency said in a statement on its Web site. Petraeus told reporters in Baghdad on Jan. 1 that the U.S. in fiscal 2010 will almost double last year’s $70 million in security aid for Yemen.
“The Yemeni president and parliament take this threat very seriously,” Petraeus, the top U.S. commander in the Middle East and Central Asia, said in Baghdad. “And that is of enormous significance, especially in a country facing such challenges.”
The London conference should concentrate on Yemen’s $11 billion development needs as well as anti-terrorism assistance, Deputy Minister for Planning and International Cooperation Hisham Sharaf said by phone from Sana’a yesterday.
A November 2006 donors’ conference in London led to pledges of $5.7 billion in aid for Yemen, almost half from Gulf nations, of which only $415 million has been received, Sharaf said.
“What is needed is a long-term aid strategy,” said Mustafa Alani, a regional security expert from the Dubai-based Gulf Research Center. “It would be wrong to focus only on security and counterterrorism.”
Other Challenges
Yemen is also struggling to subdue both an insurgency by northern Shiite Muslim rebels that has drawn in neighboring Saudi Arabia, a key U.S. ally, and a secessionist movement in the south. It is the poorest Arab nation and the government expects oil reserves that fund 70 percent of the budget to run out over the next decade.
Obama and Brown agreed to fund a police unit in Yemen to target terrorism and will support coast guard operations in the Arabian Peninsula nation, according to an e-mailed statement from the two governments yesterday.
Yemen said Dec. 24 it had foiled an al-Qaeda attack on the U.K. embassy a week earlier modeled on a twin suicide car bombing on the U.S. embassy in September 2008 that killed 17 people, including seven security guards and seven attackers.
Al-Qaeda Base
Yemen has become an increasingly important base for al- Qaeda, Yemeni Foreign Minister Abu Bakr al-Qirbi said on Dec. 29.
Abdulmutallab, a 23-year-old, spent about three months in Yemen before leaving the country in early December. He told U.S. investigators that in Yemen he received training and the bomb- making materials he used in his attempt to blow up the airliner.
Brennan said U.S. intelligence agencies had “snippets” of information that were recognized “in hindsight” to be related to the failed attack. There was a “failure to integrate and piece together those bits of information,” he said.
The top Republican on the Senate Intelligence Committee, Kit Bond of Missouri, said the U.S. national security system failed.
“With all of the leads dangling out there, somebody screwed up by not reporting it,” said Bond. In addition, the airport screening “was a disaster,” he said.
The Intelligence Committee, one of several congressional panels planning investigations of the incident, will hold a hearing Jan. 21. Bond, appearing yesterday on Fox, said there are no grounds at this point to fire Homeland Security Secretary Janet Napolitano, National Intelligence Director Dennis Blair or Leon Panetta, head of the Central Intelligence Agency.
Other Criticism
Other Republicans criticized the Democratic Obama administration’s anti-terrorism efforts.
“What we had in this case was a failure to act on a very credible report from the terrorist’s father that should, at the very least, have caused the State Department to revoke his visa,” Senator Susan Collins, a Maine Republican, said on “This Week.” Abdulmutallab’s father warned officials at the U.S. embassy in Nigeria that he was worried about his son’s extremist views, U.S. authorities said.
“Why wasn’t this individual’s visa revoked once we had such a credible report that he posed a threat?” Collins said.
She said it is “unacceptable” that there is no screening system in place to detect the explosive used in the Christmas Day incident, even eight years after would-be shoe-bomber Richard Reid used “the exact same explosive.”
Enemy Combatant
Senator Jim DeMint, a South Carolina Republican, said the U.S. “probably lost valuable information” by not viewing the attempted airline bombing as an act of war and the suspect as an enemy combatant.
“If we had treated this Christmas Day bomber as a terrorist, he would have immediately been interrogated military- style, rather than given the rights of an American and lawyers,” DeMint said on CNN.
Democratic Senator Claire McCaskill of Missouri, also appearing on CNN, said it is “unfair and, frankly, political to take pot shots at the president as we respond to this failure in our systems that we’ve got to get fixed.”
Asia Stocks Advance on China Manufacturing, Stronger Dollar
Jan. 4 (Bloomberg) -- Asian stocks rose after Chinese manufacturing expanded in December and a stronger dollar boosted the earnings outlook for Japanese car and electronics manufacturers.
Nippon Yusen K.K., Japan’s biggest shipping line, added 1.4 percent in Tokyo on optimism trade with China will rise. Honda Motor Co., which gets 42 percent of its revenue from North America, gained 1.9 percent. Japan Airlines Corp. soared 31 percent after the government said the Development Bank of Japan will double the amount of credit it will provide for the carrier.
The MSCI Asia Pacific Index rose 0.5 percent to 121.08 as of 10:51 a.m. in Tokyo. The gauge advanced 34 percent last year, the steepest annual climb since 2003 as lower interest rates and stimulus packages helped drag the global economy out of the worst slowdown since World War II.
“Asia is expected to remain the engine of growth for the world’s economy,” said Hiroshi Morikawa, a senior strategist at MU Investments Co., which manages the equivalent of $13 billion in Tokyo. “The first trading day of a year is often seen as a predictor of the year’s market climate. People are hoping this year will be better than last year and become more responsive to good news.”
The Nikkei 225 Stock Average rose 1.3 percent in Tokyo after a four-day recess. Australia’s S&P/ASX 200 Index added 0.2 percent even as a manufacturing index shrank in December for the first time in five months.
Futures on the Standard & Poor’s 500 Index added 0.5 percent. The gauge fell 1 percent on Dec. 31 as falling jobless claims raised speculation the economy was improving enough to allow the central bank to reduce stimulus measures. Government figures showed initial jobless claims in the week ended Dec. 26 fell to the lowest level since July 2008.
Last year’s jump boosted the price-book value ratio of the MSCI Asia Pacific Index to 1.61 times, the highest level since September 2008, data compiled by Bloomberg show.
China’s Purchasing Managers’ Index climbed to a seasonally adjusted 56.6, the Federation of Logistics and Purchasing said on Jan. 1. It was the fastest expansion in 20 months. South Korean exports increased 33.7 percent in December from a year earlier, the fastest pace in 17 months, the Ministry of Knowledge Economy said on Jan. 1. That exceeded the 27.9 percent gain projected by economists.
The yen weakened to as much as 93.15 per dollar on Dec. 31, a level not seen since Sept. 7, and traded at 92.88 today. A weaker yen increases the value of overseas sales at Japanese companies when converted into their home currency.
Nippon Yusen K.K., Japan’s biggest shipping line, added 1.4 percent in Tokyo on optimism trade with China will rise. Honda Motor Co., which gets 42 percent of its revenue from North America, gained 1.9 percent. Japan Airlines Corp. soared 31 percent after the government said the Development Bank of Japan will double the amount of credit it will provide for the carrier.
The MSCI Asia Pacific Index rose 0.5 percent to 121.08 as of 10:51 a.m. in Tokyo. The gauge advanced 34 percent last year, the steepest annual climb since 2003 as lower interest rates and stimulus packages helped drag the global economy out of the worst slowdown since World War II.
“Asia is expected to remain the engine of growth for the world’s economy,” said Hiroshi Morikawa, a senior strategist at MU Investments Co., which manages the equivalent of $13 billion in Tokyo. “The first trading day of a year is often seen as a predictor of the year’s market climate. People are hoping this year will be better than last year and become more responsive to good news.”
The Nikkei 225 Stock Average rose 1.3 percent in Tokyo after a four-day recess. Australia’s S&P/ASX 200 Index added 0.2 percent even as a manufacturing index shrank in December for the first time in five months.
Futures on the Standard & Poor’s 500 Index added 0.5 percent. The gauge fell 1 percent on Dec. 31 as falling jobless claims raised speculation the economy was improving enough to allow the central bank to reduce stimulus measures. Government figures showed initial jobless claims in the week ended Dec. 26 fell to the lowest level since July 2008.
Last year’s jump boosted the price-book value ratio of the MSCI Asia Pacific Index to 1.61 times, the highest level since September 2008, data compiled by Bloomberg show.
China’s Purchasing Managers’ Index climbed to a seasonally adjusted 56.6, the Federation of Logistics and Purchasing said on Jan. 1. It was the fastest expansion in 20 months. South Korean exports increased 33.7 percent in December from a year earlier, the fastest pace in 17 months, the Ministry of Knowledge Economy said on Jan. 1. That exceeded the 27.9 percent gain projected by economists.
The yen weakened to as much as 93.15 per dollar on Dec. 31, a level not seen since Sept. 7, and traded at 92.88 today. A weaker yen increases the value of overseas sales at Japanese companies when converted into their home currency.
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