Dark clouds in world horizon? Japan entering troubling economic recession?
My Comments:
For over a generation, Japan's economy has stagnated and has been a drag on the world economy. What was once a catalyst of Asian progress has now become a huge problem for our region, and also for the world. Japan and its people still have innately admirable Confucian values of discipline, love of learning, social unity and orderliness, how can this Asian country recover its economic vitality?
What social, economic, moral, political and other reforms are needed to revitalize the world's third biggest economy so that world economic growth can be accelerated too?
What can Japan leaders do to make it be like Germany, not only in terms of robust economic dynamism but also in truly normalizing relations with former World War II foes South Korea and China by implementing German-style government atoning for and rectifying its war errors, so that Japan can have a clean break from the past similar to what the dynamic and vibrant nation of Germany has done?
Why has Japan not adjusted well to new international geo-political and economic realities of the 21st century similar to the more successful Asian neighbors South Korea, Taiwan and Singapore?
Here is a news report from Bloomberg, which I want to share:
My Comments:
For over a generation, Japan's economy has stagnated and has been a drag on the world economy. What was once a catalyst of Asian progress has now become a huge problem for our region, and also for the world. Japan and its people still have innately admirable Confucian values of discipline, love of learning, social unity and orderliness, how can this Asian country recover its economic vitality?
What social, economic, moral, political and other reforms are needed to revitalize the world's third biggest economy so that world economic growth can be accelerated too?
What can Japan leaders do to make it be like Germany, not only in terms of robust economic dynamism but also in truly normalizing relations with former World War II foes South Korea and China by implementing German-style government atoning for and rectifying its war errors, so that Japan can have a clean break from the past similar to what the dynamic and vibrant nation of Germany has done?
Why has Japan not adjusted well to new international geo-political and economic realities of the 21st century similar to the more successful Asian neighbors South Korea, Taiwan and Singapore?
Here is a news report from Bloomberg, which I want to share:
Robots-to-Cosmetics Profit Slump Adds to Japan Woes: Economy
By Keiko Ujikane and Masahiro Hidaka - Nov 8, 2012 12:52 PM GMT+0800
Slumping profits at Japanese manufacturers from robots to cosmetics threaten to weigh on investment and wages, adding to the likelihood of recession after the economy probably contracted last quarter.
Gross domestic product shrank an annualized 3.4 percent in the three months through September, according to the median estimate of 17 economists surveyed by Bloomberg News. That would be the steepest decline since the earthquake-affected first quarter of 2011. The data is due Nov. 12.
The economy’s decline mirrors an aggregate 34 percent drop in net income at the 171 companies listed on the Nikkei (NKY) 225 Stock Average to report July-September earnings through yesterday, according to data compiled by Bloomberg. Japanese machinery orders fell more than estimated in September, separate data showed today, while a boost in payrolls in Australia and rising unemployment in New Zealand highlight the diverging fortunes of economies in the region.
“Today’s data show Japan’s economy is probably in a recession,” said Tatsushi Shikano, a senior economist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “Widespread deterioration in corporate profits is taking its toll on capital spending and there is nothing to suggest a firm recovery is coming back soon.”
The Nikkei was down 1.6 percent at 1:22 p.m. in Tokyo. The index has declined 12.5 percent since the start of the fiscal year on April 1, compared with a 2.1 percent decline in the Dow Jones Industrial Average (INDU) and a 2.9 percent advance in the Stoxx Europe 600 Index (SXXP) over the same period. The yen was at 79.86 per dollar, around 6 percent from its postwar high.
Nomura Securities Co., Goldman Sachs Group Inc. and JPMorgan Chase & Co. cut their third-quarter GDP forecasts last week after September exports dropped and industrial production fell the most since last year’s earthquake. Nomura expects the deepest decline -- an annualized 5.1 percent contraction --while all three see GDP shrinking again in the fourth quarter.
In other global releases today, the European Central Bank will probably leave its benchmark interest rate at a record low of 0.75 percent and President Mario Draghi will speak to reporters. The Bank of England decides monetary policy, Greece reports unemployment for August and Germany and the U.K. release trade data for September.
In the Asia-Pacific region, Indonesia and Malaysia are forecast to keep interest rates unchanged. Australian employers boosted payrolls more than economists forecast in October and New Zealand’s unemployment rate unexpectedly rose last quarter to a 13-year high.
The Bank of Japan (8301) remains under pressure to add to monetary stimulus after it expanded its asset-purchase program for the second time in two months last week. Some BOJ board members said in an Oct. 4-5 meeting that the economy may have entered a “recessionary phase,” the minutes of the meeting showed.
Sharp Corp. (6753) and Panasonic Corp. (6752) expect to lose a combined 1.2 trillion yen ($15 billion) this fiscal year, while industrial robot maker Fanuc Corp. (6954) missed its forecast and cosmetics company Shiseido Co. (4911) plans to cut costs.
Honda Motor Co. (7267) and Nissan Motor Co. (7201) cut their full-year profit forecasts by a fifth after sales in China, the world’s largest auto market, fell amid a territorial dispute. In Japan, industrywide car sales declined in September for the first time in a year and were down again in October as government subsidies for fuel-efficient vehicles ended.
“Exports are weakening and consumption is losing steam, both of which are hurting growth and making companies reluctant to spend,” said Yoshiki Shinke, chief economist at Daiichi Life Research Institute.
Capital spending probably dropped 1.7 percent in the third quarter from the previous three-month period, according to the Bloomberg News survey, the biggest fall since 2009. Wages haven’t risen since April.
Dainippon Screen Manufacturing Co. (7735), a maker of chip equipment, said on Nov. 5 it now expects to swing to a full-year loss due to lower investment by semiconductor manufacturers. Fanuc, the world’s largest maker of controls that run machine tools, reported on Oct. 25 that its net income dropped as manufacturers in Japan and abroad pare spending on new equipment.
Sharp, Panasonic and Sony Corp. (6758), which all posted record losses last fiscal year, are cutting jobs and closing production lines in a bid to return to profitability. Shiseido, Japan’s largest cosmetics maker, on Oct. 31 said it will cut costs in the next two fiscal years and limit new hiring after its net income fell by 45 percent in the six months through September.
Gross domestic product shrank an annualized 3.4 percent in the three months through September, according to the median estimate of 17 economists surveyed by Bloomberg News. That would be the steepest decline since the earthquake-affected first quarter of 2011. The data is due Nov. 12.
Automobile engines pass beneath Fanuc Corp. robots as they move along the production line inside the new Opel assembly plant, a unit of General Motors Co., in Szentgotthard, Hungary on Thursday, Sept. 20, 2012. Photograph: Akos Stiller/Bloomberg
“Today’s data show Japan’s economy is probably in a recession,” said Tatsushi Shikano, a senior economist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “Widespread deterioration in corporate profits is taking its toll on capital spending and there is nothing to suggest a firm recovery is coming back soon.”
The Nikkei was down 1.6 percent at 1:22 p.m. in Tokyo. The index has declined 12.5 percent since the start of the fiscal year on April 1, compared with a 2.1 percent decline in the Dow Jones Industrial Average (INDU) and a 2.9 percent advance in the Stoxx Europe 600 Index (SXXP) over the same period. The yen was at 79.86 per dollar, around 6 percent from its postwar high.
Orders Decline
The 4.3 percent decline in Japanese machinery orders, an indicator of capital spending, compared with the median forecast for a 2.1 percent drop in a survey of economists by Bloomberg News. The nation’s current account surplus was 503.6 billion yen in September, the narrowest for the month since at least 1985, separate data showed today. On a seasonally adjusted basis, the nation posted its first current account deficit on record.Nomura Securities Co., Goldman Sachs Group Inc. and JPMorgan Chase & Co. cut their third-quarter GDP forecasts last week after September exports dropped and industrial production fell the most since last year’s earthquake. Nomura expects the deepest decline -- an annualized 5.1 percent contraction --while all three see GDP shrinking again in the fourth quarter.
In other global releases today, the European Central Bank will probably leave its benchmark interest rate at a record low of 0.75 percent and President Mario Draghi will speak to reporters. The Bank of England decides monetary policy, Greece reports unemployment for August and Germany and the U.K. release trade data for September.
U.S. Trade
In the U.S., the trade deficit probably widened in September, a Commerce Department report may show. The U.S. also reports weekly initial jobless claims.In the Asia-Pacific region, Indonesia and Malaysia are forecast to keep interest rates unchanged. Australian employers boosted payrolls more than economists forecast in October and New Zealand’s unemployment rate unexpectedly rose last quarter to a 13-year high.
The Bank of Japan (8301) remains under pressure to add to monetary stimulus after it expanded its asset-purchase program for the second time in two months last week. Some BOJ board members said in an Oct. 4-5 meeting that the economy may have entered a “recessionary phase,” the minutes of the meeting showed.
Spending Constrained
Prime Minister Yoshihiko Noda’s room for fiscal maneuvering has been limited by the political opposition’s refusal to give his administration the authority to borrow to pay for this year’s deficit. On Oct. 26, the government said it would tap discretionary funds to pay for 750 billion yen in fiscal stimulus and Finance Minister Koriki Jojima said yesterday the government will take more steps to tackle current “severe” economic conditions.Sharp Corp. (6753) and Panasonic Corp. (6752) expect to lose a combined 1.2 trillion yen ($15 billion) this fiscal year, while industrial robot maker Fanuc Corp. (6954) missed its forecast and cosmetics company Shiseido Co. (4911) plans to cut costs.
Honda Motor Co. (7267) and Nissan Motor Co. (7201) cut their full-year profit forecasts by a fifth after sales in China, the world’s largest auto market, fell amid a territorial dispute. In Japan, industrywide car sales declined in September for the first time in a year and were down again in October as government subsidies for fuel-efficient vehicles ended.
“Exports are weakening and consumption is losing steam, both of which are hurting growth and making companies reluctant to spend,” said Yoshiki Shinke, chief economist at Daiichi Life Research Institute.
Falling Exports
Japanese exports in the first 20 days of October were down 5.1 percent from a year earlier, the country’s customs authority said today.Capital spending probably dropped 1.7 percent in the third quarter from the previous three-month period, according to the Bloomberg News survey, the biggest fall since 2009. Wages haven’t risen since April.
Dainippon Screen Manufacturing Co. (7735), a maker of chip equipment, said on Nov. 5 it now expects to swing to a full-year loss due to lower investment by semiconductor manufacturers. Fanuc, the world’s largest maker of controls that run machine tools, reported on Oct. 25 that its net income dropped as manufacturers in Japan and abroad pare spending on new equipment.
Sharp, Panasonic and Sony Corp. (6758), which all posted record losses last fiscal year, are cutting jobs and closing production lines in a bid to return to profitability. Shiseido, Japan’s largest cosmetics maker, on Oct. 31 said it will cut costs in the next two fiscal years and limit new hiring after its net income fell by 45 percent in the six months through September.
No comments:
Post a Comment