The Bank of Japan will consider upgrading its view on the economy later this month in response to improved exports and output, sources said on Friday, as markets anxiously await U.S. jobs data that may offer fresh signs the recession is easing.
Muted gains in Asian shares underlined the tenuous nature of the scattered signs of recovery appearing in the global economy.
The BOJ's board is expected to discuss at a meeting on June 15-16 the possibility of changing its view, stated last month, that the economy is worsening, central bank sources told Reuters.
That sign of optimism, or at least less intense pessimism, will be tested at 1230 GMT, when U.S. non-farm payroll numbers are expected to show employers cut 520,000 jobs in May, down from 539,000 in April.
A much worse-than-expected figure could dampen expectations that the worst may be over for the global economy, hopes that have pushed stock markets from Seoul to London sharply higher since early March and weakened support for the dollar as a safe haven.
''If the numbers are better than expected, investors will get confirmation that the economy's really improving, but there's worry about what will happen if the figures are worse than consensus,'' said Yumi Nishimura, a deputy general manager of the investment advisory section at Daiwa Securities SMBC.
Asian shares, oil and higher-yielding currencies rose on Friday on hopes for improvement in the underlying economic outlook, but those gains were capped by nervousness about the U.S. payroll data.
The MSCI index of Asia-Pacific stocks outside Japan rose 0.8 percent as of 0450 GMT, rebounding from a 1.9 percent fall on Thursday. The Nikkei was up 0.6 percent.
CORPORATE OUTLOOK DIVERGES A less pessimistic outlook by the Bank of Japan would follow a cautiously upbeat message from U.S. Federal Reserve Chairman Ben Bernanke this week, when he said the risk of a dangerous downward spiral had receded.
The European Central Bank (ECB) is taking a bleaker view.
It slashed its economic forecasts on Thursday, unveiled a bond-buying plan and warned that the euro zone recession would last for another year.
However, the ECB kept euro zone interest rates on hold, as did the Bank of England and Bank of Canada.
Corporate news underlined firms' varying success at weathering the credit crunch.
Global miner Rio Tinto dumped plans for a $19.5 billion tie-up with China's Chinalco and agreed to set up an iron ore joint venture with rival BHP Billiton and sell new shares to slash its debt.
Japan's Canon Inc, the world's largest digital camera maker, revived plans to build a $180 million factory as demand holds firm for its high-end single-lens reflex cameras.
KB Financial Group, which runs South Korea's largest bank Kookmin, is seeking to raise $1 billion to $3 billion in new capital by around the third quarter, a banking source told Reuters.
KB had said it would pursue acquisitions after the third quarter once markets stabilised, looking to boost its corporate and investment banking presence.
Meanwhile, the U.S. Federal Deposit Insurance Corp is aiming at a shake-up of Citigroup Inc's top management, including replacing Chief Executive Vikram Pandit, the Wall Street Journal said, citing people familiar with the matter.
Showing posts with label Japan. Show all posts
Showing posts with label Japan. Show all posts
Friday, June 5, 2009
Thursday, February 28, 2008
Japan’s industrial output slides
Japan’s industrial production fell twice as much as expected in January, sending stock prices lower on heightening concern that the country’s economy may slow down or even contract in the first quarter of 2008.
Economists expect output, the driver of the economy, to fall in January-March from the previous quarter, reinforcing views that the Bank of Japan will keep interest rates on hold or even cut them later this year.
”I expect a likely rebound in industrial production in April-June to be weak, and that will flash a yellow light for the BOJ’s scenario of the positive mechanism,” said Yasuhiro Onakado, chief economist at Daiwa SB Investments.
”I think the BOJ may need to cut rates around the middle of this year,” he said.
Industrial output fell 2.0 per cent in January from a month earlier, compared with a consensus market forecast for a 0.8 per cent drop.
Tokyo’s Nikkei stock average fell 1.3 per cent on the weaker-than-expected reading, while the yen was little changed after the data’s release.
Manufacturers expect their output, the core component of production, to fall a further 2.9 per cent in February but to rise 2.8 per cent in March, data from the Ministry of Economy, Trade and Industry showed on Thursday.
If output turns out as forecast in February and March, output in the first quarter of 2008 will fall 2.5 per cent from the previous quarter, which would be the biggest quarterly drop since a 2.6 per cent decline marked in the last quarter of 2001, the ministry said.
Markets are focusing on how Atsushi Mizuno, regarded as one of the most hawkish members of the BOJ board, describes the outlook for the economy in his speech to business leaders in Oita, southern Japan, and at a news conference later on Thursday.
”Output of electronic devices fell sharply, which is a worrying sign as strength in that sector drove overall output in the second half of last year,” said Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute.
”Output is expected to fall in January-March from the previous quarter,” he said.
Economists have said the Japanese economy could enter a soft patch in the first half of this year as companies gradually feel the pinch from the U.S. slowdown, although exports have remained firm so far.
Federal Reserve Chairman Ben Bernanke signalled a readiness to cut interest rates again on mounting fears of a U.S. recession, saying the U.S. central bank was more worried about the downside risks to growth than about inflation.
Separate data showed retail sales rose 1.5 per cent in January from a year earlier, compared with economists’ median forecast for a flat reading, a sign that personal consumption was holding up well even as rising energy and food prices hurt household sentiment.
Japan’s economy grew at an annual clip of 3.7 per cent in the final three months of last year, far above the meagre 0.6 per cent logged in the United States in the same period, as strength in exports and capital spending offset soft consumption.
The BOJ has said it would need to raise interest rates gradually from the current 0.5 per cent in line with improvements in the economy to keep it from overheating in the long run.
But shaky financial markets, fears of a U.S. recession and mounting pessimism over Japan’s economic outlook have led to views that the central bank will keep rates steady or even cut them this year. The Fed has cut its benchmark overnight lending rates by 2.25 percentage points since mid-September to 3 per cent.
© reuters
Economists expect output, the driver of the economy, to fall in January-March from the previous quarter, reinforcing views that the Bank of Japan will keep interest rates on hold or even cut them later this year.
”I expect a likely rebound in industrial production in April-June to be weak, and that will flash a yellow light for the BOJ’s scenario of the positive mechanism,” said Yasuhiro Onakado, chief economist at Daiwa SB Investments.
”I think the BOJ may need to cut rates around the middle of this year,” he said.
Industrial output fell 2.0 per cent in January from a month earlier, compared with a consensus market forecast for a 0.8 per cent drop.
Tokyo’s Nikkei stock average fell 1.3 per cent on the weaker-than-expected reading, while the yen was little changed after the data’s release.
Manufacturers expect their output, the core component of production, to fall a further 2.9 per cent in February but to rise 2.8 per cent in March, data from the Ministry of Economy, Trade and Industry showed on Thursday.
If output turns out as forecast in February and March, output in the first quarter of 2008 will fall 2.5 per cent from the previous quarter, which would be the biggest quarterly drop since a 2.6 per cent decline marked in the last quarter of 2001, the ministry said.
Markets are focusing on how Atsushi Mizuno, regarded as one of the most hawkish members of the BOJ board, describes the outlook for the economy in his speech to business leaders in Oita, southern Japan, and at a news conference later on Thursday.
”Output of electronic devices fell sharply, which is a worrying sign as strength in that sector drove overall output in the second half of last year,” said Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute.
”Output is expected to fall in January-March from the previous quarter,” he said.
Economists have said the Japanese economy could enter a soft patch in the first half of this year as companies gradually feel the pinch from the U.S. slowdown, although exports have remained firm so far.
Federal Reserve Chairman Ben Bernanke signalled a readiness to cut interest rates again on mounting fears of a U.S. recession, saying the U.S. central bank was more worried about the downside risks to growth than about inflation.
Separate data showed retail sales rose 1.5 per cent in January from a year earlier, compared with economists’ median forecast for a flat reading, a sign that personal consumption was holding up well even as rising energy and food prices hurt household sentiment.
Japan’s economy grew at an annual clip of 3.7 per cent in the final three months of last year, far above the meagre 0.6 per cent logged in the United States in the same period, as strength in exports and capital spending offset soft consumption.
The BOJ has said it would need to raise interest rates gradually from the current 0.5 per cent in line with improvements in the economy to keep it from overheating in the long run.
But shaky financial markets, fears of a U.S. recession and mounting pessimism over Japan’s economic outlook have led to views that the central bank will keep rates steady or even cut them this year. The Fed has cut its benchmark overnight lending rates by 2.25 percentage points since mid-September to 3 per cent.
© reuters
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