Japan 01 (May 08 - Dec 09)

[winston]

Japan's Businesses Turn Pessimistic on Export Slump (Update1)
By Jason Clenfield

Oct. 1 (Bloomberg) -- Japan's largest manufacturers turned pessimistic about their prospects for the first time in five years as the deepening U.S. financial crisis stifled demand in the country's export markets.

The Tankan index of confidence among big makers of cars and electronics slid to minus 3 points in September from 5 in June, a fourth quarterly drop, the Bank of Japan said today in Tokyo. The first negative reading for the index since 2003 indicates pessimists outnumber optimists.

Japan's economy may already be in a recession as exports weaken and consumers cut spending at home. Fallout from the global financial crisis is slowing growth in China and other emerging markets that Toyota Motor Corp. and Komatsu Inc. relied on over the past year as U.S. demand slid.

``Things are going to be tough,'' said Richard Jerram, chief economist at Macquarie Securities Inc. in Tokyo. ``It looks like the Chinese construction sector has some fairly serious issues. So your two biggest export markets both have their problems.''

The yen traded at 106.01 per dollar at 8:53 a.m. in Tokyo from 106.06 before the report was published. Large manufacturers said they see the yen trading at an average of 102.82 per dollar for the year ending March 31. The median estimate of 28 economists surveyed by Bloomberg News was for large-manufacturer sentiment to drop to minus 2.

Toyota and Honda Motor Co., Japan's biggest carmakers, led the steepest drop in domestic vehicle output in a decade in August after U.S. exports plunged the most in almost five years.

Smaller Companies

The chain reaction that originated with the U.S. downturn has started to hit the smaller companies that employ about 70 percent of Japan's workers.

Akebono Brake Industry Co., a Toyota supplier with 3,800 domestic employees, is one of several parts makers that have cut profit forecasts in the past month, citing weaker U.S. car sales.

``We're affected by what happens to our customers,'' said Yoshio Arai, a spokesman at Akebono, a maker of brake and clutch parts. ``We'll need to cut output.''

Executives surveyed for the Tankan filled out their questionnaires in the weeks when the financial crisis bankrupted Lehman Brothers Holdings Inc. and forced the U.S. government to take over mortgage companies Freddie Mac and Fannie Mae.

``In the middle of a global financial crisis, Japan has been surprisingly cool,'' said Martin Schulz, a senior economist at Fujitsu Research Institute Ltd. in Tokyo. ``Companies have cut back a bit, but kept their investment plans alive.''

Japan's largest companies said they plan to increase investment 1.7 percent this year. While that pace is slower than the average of the past five years, it is still better than the spending cuts made during the last recession.

`Spring Back'

``The economy is in a position where it can spring back more quickly once the external situation becomes more benign,'' said Huw McKay, senior international economist at Westpac Banking Corp. in Sydney. ``We just don't have the imbalances in the economy -- the debt overhang, the excessive employment and the capacity overhangs -- that we had in each of the three previous downturns.''

The large manufacturer index is still above numbers recorded during Japan's most recent recession, which ended in 2002. The survey plunged to minus 51 in 1998, when Asia was in the throes of a currency crisis and the government had to buy failed lenders including Long-Term Credit Bank of Japan Ltd.

Still, companies are cutting non-essential expenses like travel and stationery, and that's hurting businesses in the service sector.

Business-Class Seats

All Nippon Airways Co. has seen demand for its business- class seats drop on flights to the U.S., company spokesman Kazuo Yoshioka said yesterday. Askul Corp., a distributor of office supplies, this month said sales of office furniture dropped 14 percent in the three months through August.

``Companies are simply not making their profit targets,'' said Fujitsu's Schulz. ``They won't stop major projects but they'll cut on all non-necessary things. The little companies, the suppliers, are going to feel the squeeze.''

[iam802]

Yamato Life Files for Bankruptcy, Citing Investments

http://www.bloomberg.com/apps/news?pid= ... refer=home

Oct. 10 (Bloomberg) -- Yamato Life Insurance Co., a 98- year-old Japanese insurer, filed for court protection from creditors in the nation's first bankruptcy in the industry in seven years, with debts exceeding assets by 11.5 billion yen ($116 million).

.......

[kennynah]

usd116million oso cannot tahan...i think really have to close shop man...

[LenaHuat]

The Japanese govt announced that it would sponsor IMF-funded rescue packages for countries melting under the present crisis. Japan's moment in history is here once again.

[winston]

Wah, suddenly the high yen, recession in Japn etc. is not a problem anymore...

Japan's Nikkei 225 closes Tuesday after a record one-day rally of more than 14 percent, The Associated Press reports.

[millionairemind]

October 27, 2008, 7.14 pm (Singapore time)

Japan unveils new steps to support stock market

TOKYO - Japan announced new measures on Monday to support its crumbling stock market, including a bigger fund to rescue banks that fall victim to the credit crunch.

The move came as Mitsubishi UFJ Financial, the Japanese megabank buying a chunk of Wall Street giant Morgan Stanley, said it would tap investors for up to US$10.5 billion to weather the financial crisis.

Prime Minister Taro Aso said restrictions would be tightened on 'short-selling' of borrowed shares, a practice that critics say has contributed to the recent slump on global markets.

He ordered an increase in the government's ceiling for capital injections into ailing banks but did not specify the size of the emergency fund.

The new steps did little to boost investor confidence. The Nikkei stock index plunged 6.36 per cent to a low not seen since 1982 before the bubble era.

The financial crisis 'will have a critical impact on share prices, the market and the real economy', Mr Aso told reporters.

Shortly afterwards, the Group of Seven major economies issued a joint statement vowing to cooperate to bring stability to battered markets.

They warned against the 'excessive volatility' in the yen, which has soared to a 13-year high against the dollar due to the global financial turmoil. The strong yen hurts exporter earnings, contributing to the plunge on the market.

Japanese Finance Minister Shoichi Nakagawa expressed heightened concern about the strong yen, warning that 'excessive' and 'disorderly' movements were destabilising Asia's biggest economy.

'I will continue to watch currency markets with great interest,' he said.

The package of market-boosting steps is the second announced by Japan in less than two weeks. Earlier this month Tokyo said it would relax restrictions on corporate share buy-backs and freeze sales of state-owned banking shares.

'We will consider whether there are further effective measures to take,' said Chief Cabinet Secretary Takeo Kawamura, the government's spokesman.

Japanese financial firms are believed to be less exposed to losses related to troubled US mortgage loans compared with many Western banks, giving them the opportunity to snap up stakes in troubled Wall Street giants.

But they are being squeezed by a plunging stock market and a Japanese economy on the brink of recession.

'Reasonable liquidity conditions and the lack of an external funding requirement may not necessarily rule out the need for an injection of public funds to support banks' capital positions,' Fitch Ratings warned.

'With large equity holdings, major banks are exposed to the sharp correction in Japanese equity markets, while smaller regional banks may face asset quality problems associated with more pronounced economic downturns outside the large urban centres,' the credit rating agency said in a report.

Mitsubishi UFJ said it plans to issue shares worth up to 990 billion yen to boost its financial soundness following a drop in the value of its shareholdings as well as a US$9 billion investment in Morgan Stanley.

Mitsubishi UFJ shares lost 15 per cent to end at 583 yen on Monday after a local newspaper leaked details of the planned capital hike. -- AFP

[winston]

Sleepy regulator..

Japan restricts short-selling after stocks plunge

Japan will impose a ban on naked short selling of stocks to try to stabilize Asia's largest bourse amid the worst financial crisis in decades, the finance minister said.

"I decided on the measure because these few days will be critical and stock exchanges are facing risks unless we take quick action,'' Shoichi Nakagawa said.

Short sales involve selling borrowed shares in the hope of buying them back later at a cheaper price to make a profit. With naked short-selling, traders sell stocks before even borrowing them.

Critics say short selling has contributed to the recent sharp drops on global markets, including the Nikkei, which plunged to a 26-year low on Monday.

AGENCE FRANCE-PRESSE

[iam802]

Nomura Has Wider-Than-Forecast 72.9 Billion Yen Loss (Update1)

http://www.bloomberg.com/apps/news?pid= ... UXKUbqcgdQ


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Let' see how long can the shortselling boost Nikkei. Aging population...need more viagra.

[kanglc]

Financial Times interview Heizo Takenaka, Japan's former economy minister. This is part 1 of a 3-part video:
http://www.ft.com/cms/893ac9c8-757e-11d ... omSearch=n

[millionairemind]

Almost like FIAT money..

BOJ Cuts Rate to 0.3%; Shirakawa Casts Deciding Vote (Update1)

By Mayumi Otsuma

Oct. 31 (Bloomberg) -- The Bank of Japan cut its benchmark interest rate to 0.3 percent in a split decision to stem damage on the economy from the global financial crisis.

Governor Masaaki Shirakawa cast the deciding vote to cut the key overnight lending rate from 0.5 percent after four of the eight board members dissented, the central bank said in Tokyo today. Fifteen of 17 economists surveyed by Bloomberg News predicted a reduction to 0.25 percent.

Shirakawa came under pressure to lower borrowing costs for the first time in seven years after Japan's currency surged to a 13-year high last week and the Nikkei 225 Stock Average slumped to the lowest level since 1982. Until now, Japan had kept rates on hold in the face of cuts by central banks worldwide, arguing that Japan's borrowing costs were already ``very low.''