It’s the first day of dealings in the new-fangled Japan Exchange Group following the slow-motion merger of the previously unlisted Tokyo Stock Exchange and the listed Osaka Securities Exchange, slated to create the world’s third largest bourse. And the first day has proved to be un-clever, with stock number 8697 down 9.42 per cent at the close in Japan… Read more
The yen fell after Tokyo intervened to weaken the currency in the latest move by a central bank to combat the impact of recent market turmoil, the FT reports. Current broader market action was generally trendless, however. The FTSE All-World equity index was down 0.1 per cent, driven by Asian concerns over US growth prospects, while commodities were mixed and gold sat at $1,662 an ounce, just $10 dollars below record highs. Core bond yields were slightly firmer, but remained near recent lows. S&P 500 futures were up 0.2 per cent and the FTSE Eurofirst 300 was benefiting from Wall Street’s overnight rebound to gain 0.9 per cent. The Bank of Japan entered the market to sell yen aggressively after it approached record highs versus the US dollar in recent days, spooking exporters in a country still recovering from the March 11 earthquake. The Japanese unit was down 3.1 per cent to Y79.37 relative to the dollar and off 2.6 per cent to Y113.32 per euro. Intervention by the BoJ came a day after the Swiss National Bank tried to push its currency down from record levels by cutting interest rates and implying that it stood ready to intervene if necessary.
While media commentators laud the inimitable Japanese sense of orderliness, politeness and dignity in the wake of the March 11 earthquake and tsunami that devastated the northeast region, it’s also reassuring to see a senior Japanese figure lash out.
The Tokyo Stock Exchange chairman Atsushi Saito might not be making any friends in Tokyo’s foreign community – having aimed a broadside at foreigners who fled the city last week amid aftershocks, power cuts and radiation fears. But he doesn’t care. As the Wall Street Journal reported on Thursday: Read more
With reports of missing ships and commercial vessels running ashore all over Japan, we thought it a good time to check in on the last known whereabouts of vessels in the region, courtesy of Vessel Tracker.
Here, for example, are the last available locations for vessels in Tokyo Bay: Read more
The big question facing almost everyone in quake-rocked Japan now is…
… What exactly is going on with the country’s nuclear power plants? Read more
Tokyo’s overseas aid agency is to team up with Japanese companies to build a Y140bn ($1.7bn) port in northern Vietnam and is considering a possible Y300bn project to develop a large airport to serve the southern commercial hub of Ho Chi Minh City, the FT reports. The port project will be one of the first public-private partnership deals in Communist-ruled Vietnam, underscoring Tokyo’s determination to make better use of state financing to win its companies a bigger role in infrastructure development by Asian neighbours. Officials cite data suggesting that in Asia alone, spending on electricity provision, transport, telecoms and water sanitation will total about $750bn a year over the next decade. The Japan International Co-operation Agency expects to sign an agreement before the end of April for the first tranche of what is planned to be Y120bn in loan financing for development of the Lach Huyen Port, a Jica official said.
Under new regulations passed this month, Tokyo authorities are seeking to block the sale to anyone under 18 of comics or animated films that “improperly laud or exaggerate” incest, rape and other sexual activity that contravenes “social norms”, reports the FT. The rules – which also seek to promote internet filtering for minors and crack down on child pornography – highlight efforts by politicians, parents and teachers’ groups to tame an industry known for its explicit exploration of sexual taboos. But critics say the capital’s attempt to tighten censorship could have a chilling effect on a comic and animation sector seen as one of Japan’s most successful cultural exports. Publishers are outraged in particular by what they see as vague rules for which of the comics should be consigned to retailers’ “adults only” sections and required to be packed in plastic covers to deter under-age browsers. Ten major publishers, including the house that issues Aki-Sora, have said they will boycott next March’s Tokyo International Anime Fair, a flagship animation promotion event that last year attracted 132,000 visitors.
International companies will be offered hefty tax breaks and other incentives to set up regional headquarters or research operations in Japan, in a move Tokyo hopes will make the country more attractive as a business hub, reports the FT. The breaks, included in a package of tax policies approved by the cabinet for the next fiscal year from April, reflect concern that regional rivals such as Singapore and China are proving more attractive to multinationals as centres for management and R&D. “We have a strong sense of crisis,” said Junichiro Kuroda, director of the economics and trade ministry’s investment facilitation division. The unprecedented offer to foreign companies of a lower effective corporate tax rate than that paid by Japanese enterprises marks a “major shift in policy”, says Tatsuya Terazawa, director of the ministry’s industrial policy division.
Japan’s financial regulator and the Tokyo Stock Exchange are investigating recent trading activity following allegations of widespread insider trading ahead of new share issues by Japanese companies, reports the FT. The TSE and the Securities and Exchange Surveillance Commission are examining possible insider trading where short-selling activity surged in the run-up to company announcements of new share issues. The WSJ says that following the FT’s report, a TSE spokesman acknowledged that concerns about widespread insider trading ahead of capital-raising announcements were dampening investor appetite in the Japanese market.
The Japanese government has downgraded its assessment of economic conditions for the first time in almost two years due to the strong yen and weak exports, the FT reports. The cabinet office on Tuesday said Japan’s recovery from its worst post-war recession appeared to be “pausing”, and warned that the economy could soon face weaker overseas demand. The more pessimistic outlook did not come as a surprise given recent concerns about the threat of the surging yen on Japan’s economic recovery. Worries about the recovery prompted Tokyo to intervene in the currency markets for the first time in more than six years, selling a hefty Y2,125bn of its currency ($26bn) in September. The government is drawing up another economic stimulus package while the Bank of Japan has recently announced additional easing measures. The strength of the yen, which has already climbed past last month’s intervention level to trade at Y81.40, is hurting business confidence and raising worries about its potential impact on capital spending and further hollowing out of the country’s manufacturing sector.
In the wake of the global financial crisis, a renewed plunge in property prices in Japan has fuelled expectations of a new era of distressed asset fire sales, an opportunity specialist funds have been hungrily eyeing. reports the FT.
Speculation mounted on Monday that Japanese consumer lender Takefuji was preparing to file for bankruptcy as part of a move to restructure itself, Japan’s Nikkei newspaper reported. According to Bloomberg and Reuters, the group, which has $5.2bn in debts, has suffered under the weight of court-ordered interest repayments and tighter lending rules. The lender is seen at risk of failure due to not having the financial backing of any of Japan’s big banks. Bloomberg said the group was considering “various measures” to revitalize its business, according to a statement it made to the exchange on Monday. Shares were halted for most of the day as as a glut of sell orders hit the market immediately after the media reports were published. For more see FT Alphaville.
China’s leading foreign policy official raised the stakes in the latest diplomatic dispute with Japan on Sunday, warning Tokyo not to make “wrong judgments” over the seizure of a Chinese fishing boat in contested waters, reports the FT. The warning from State Councillor Dai Bingguo came after China, on Friday, postponed negotiations with Japan over disputed undersea gas beds in the East China Sea in protest over the detention of the captain of the Chinese boat. Mr Dai issued the warning after summoning the Japanese ambassador in what Xinhua’s English language service described as “the wee hours”, the fourth time that Uichiro Niwa has been called to meet Chinese officials over the incident near the Japanese-controlled Senkaku islands.
Japan’s government is set to urge the Bank of Japan to further ease monetary policy in efforts to curb the yen’s rise and support the fragile economy, reports Reuters, citing a report in the Asahi newspaper. The news highlights pressure on the central bank to act ahead of a policy meeting next month. Japanese officials in recent days have tried to talk down the yen, which rose to a 15-year high this week of Y83.60 to the dollar, hinting at possible intervention for the first time since 2004. FT Alphaville meanwhile asks, would it really matter anyway if Tokyo intervenes or not?
The Japanese government is under intense pressure to tackle the economy after the yen surged to a 15-year high against the US dollar and the stock market fell below 9,000, sparking fears of a double-dip recession, reports the FT. Naoto Kan, the Japanese prime minister, said on Tuesday that steep currency moves were “undesirable” but failed to calm markets amid perceptions that he was more focused on a potential leadership challenge next month than the waning economic recovery. FT Alphaville explains why this might not work.