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Japan’s Jan service sector sentiment index down to 44.1

by on February 8, 2012

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(MENAFN) Japan’s Cabinet Office said that in January, the country’s service sector confidence index dropped to 44.1 from 47 in December, reported Reuters. The office’s survey included taxi …

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David Vitter Makes Bold Move In Oil Drilling Battle

by AP on May 25, 2011

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WASHINGTON — Democrats are crying foul after a GOP senator blocked a pay raise for Interior Secretary Ken Salazar in an effort to pressure him to approving more deepwater oil and gas drilling permits. At issue is a move by oil state Sen. David Vitter, R-La., to not only block the almost $20,000 raise for Salazar last week but then offer to allow the raise to go forward if the Interior Department issues six new deepwater permits a month. Salazar responded with a letter accusing Vitter of employing strong-arm tactics and of trying to coerce him into approving new drilling permits in order to get the raise. Salazar said Vitter’s move amounted to “attempted coercion of public acts here at the Department” and asked that efforts to give him a pay raise be halted. Salazar’s pay is lower than other Cabinet members because of an obscure constitutional requirement that blocks lawmakers who move to the executive branch from claiming pay raises they’ve voted on while in Congress. Vitter blocked legislation last week to fix the disparity, saying he was keeping the “boot on the neck” of the department. “It is wrong for Sen. Vitter to try to get something in return for moving forward on a matter that the Senate has considered routine for more than a century,” Majority Leader Harry Reid said in a statement. Democrats suggested Vitter was skating close to federal bribery laws that make it a crime to promise “anything of value … to influence any official act.” Vitter’s not backing down. “I’m glad the secretary has dropped his push for a pay raise,” Vitter said. “It was truly offensive to Gulf energy workers who are struggling under his policies. Now I hope he starts earning what he already makes and properly issues new permits for much needed drilling in the Gulf.”

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Japan Cabinet approves USD49.7b extra budget

April 22, 2011

Japan Cabinet approves USD49.7b extra budget

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Japan Cabinet presents draft $1.11 trillion budget

December 27, 2010

Japan Cabinet presents draft $1.11 trillion budget

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Video: Breil Says Nuclear Plants to Help Fund Energy Research

September 28, 2010

Sept. 28 (Bloomberg) — Klaus Breil, lawmaker and energy spokesman for Germany’s ruling Free Democratic Party, talks about renewable and nuclear energy production in Germany. Chancellor Angela Merkel’s Cabinet approved an extension of the lifecycle of Germany’s 17 nuclear-power plants, rejecting public protests and opposition threats to challenge the government’s plans in court. Breil speaks from Berlin with Andrea Catherwood on Bloomberg Television’s “The Pulse.”

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Japan’s First-Quarter Economic Growth Revised to 5% From Initial 4.9% Pace

June 9, 2010

By Keiko Ujikane June 10 (Bloomberg) — Japan’s economy expanded more than initially estimated in the first quarter, driven by exports and an upward revision to consumer spending. Gross domestic product rose at an annual 5 percent rate in the three months ended March 31, faster than the 4.9 percent reported last month, the Cabinet Office said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg was for 4.2 percent. None of the analysts predicted quicker growth. Stocks rose as the report spurred speculation that Japan’s export-led recovery will withstand the European sovereign debt crisis. Companies from Elpida Memory Inc. to JFE Holdings Inc. are benefiting from demand in Asia, and that has begun to encourage spending at home even as deflation persists. “The economic recovery is starting to spread,” said Yoshiki Shinke , senior economist at Dai-Ichi Life Research Institute in Tokyo. “So it’s not just fast growth, it’s quality growth as well.” The Nikkei 225 Stock Average rose as high as 0.7 percent and was up 0.2 percent at 10:07 a.m. in Tokyo. The gauge has slid 14 percent since the start of May on concern that the European sovereign debt crisis will hamper the global recovery. The yen traded at 91.21 per dollar from 91.24 before the report. Public Debt Japan has grown for four straight quarters, following the country’s worst postwar recession. From the previous quarter, it expanded 1.2 percent, the same rate as the Cabinet Office estimated last month. That’s faster than the U.S.’s 0.8 percent and a 0.2 percent gain in Europe. Without adjusting for price changes, Japan grew a nominal 1.3 percent from the previous quarter. The GDP deflator, a gauge of price trends, fell 2.8 percent from a year earlier, narrowing from 3 percent first reported. Separate figures today showed Japan’s producer prices rose for the first time in 17 months in May, fueled by an increase in raw-material costs. Faster growth may make it easier for new Prime Minister Naoto Kan to tackle the nation’s public debt , the largest in the world, without derailing the economy’s revival. His government will compile a plan to address fiscal constraints by the end of the month as Japan bids to avoid comparisons with Greece and the European Union. Exports led the expansion, advancing 6.9 percent, unchanged from the initial estimate. Net exports, or shipments minus imports, added 0.7 percentage point to growth, the same as last month’s reading. ‘Booming’ Asia “As long as the global rebound is driven by booming Asian economies, Japan’s export-led revival should be sustained,” Ryutaro Kono , chief economist at BNP Paribas in Tokyo, said before the report. “Economic growth may slow in coming quarters, but Japan’s economy will likely expand around 2 percent, which is well above potential.” Elpida Memory is among manufacturers that are tapping Asian demand. The country’s sole maker of computer memory chips plans to build factories in Taiwan and China, and expects record profit and revenue this fiscal year, President Yukio Sakamoto said this week. Consumer spending, which makes up more than half of the economy, climbed 0.4 percent from the previous quarter, compared with a 0.3 percent gain estimated last month, boosted by government incentives to purchase electronics and automobiles. Gains in housing investment were also revised to 0.4 percent from 0.3 percent. Business Spending Capital investment advanced 0.6 percent, slower than the 1 percent initially reported. Japanese companies are starting to spend on plant and equipment, even as the European debt crisis clouds the outlook for global growth, with a report yesterday showing machinery orders climbed for a second straight month in April. JFE Holdings , Japan’s second-largest steelmaker, said last month that it plans to spend 1 trillion yen ($11 billion) over three fiscal years to tap rising demand in Asia as profitability increases. “There’s no doubt that businesses will start increasing investment this fiscal year,” said Susumu Kato , chief economist for Japan in Tokyo at Credit Agricole CIB and CLSA. “But there’s little reason for them to rush as the uncertainties over the economy are increasing.” To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net ;

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Japanese Machinery Orders Rise More-Than-Estimated 4% as Earnings Rebound

June 8, 2010

By Keiko Ujikane June 9 (Bloomberg) — Japanese machinery orders rose more than economists estimated in April, signaling companies are preparing to spend again as the economy recovers and earnings rebound. Orders, an indicator of business investment in three to six months, climbed 4 percent from March, when they increased 5.4 percent, the Cabinet Office said today in Tokyo. The median forecast of 27 economists surveyed by Bloomberg News was for a 1.7 percent gain. Higher spending by companies and consumers would broaden a recovery that’s been driven by exports and hampered by deflation. Hitachi Ltd. to Tokyo Electron Ltd. are among businesses that are benefiting from renewed global demand, prompting them to forecast better earnings and invest in plant and equipment. “Capital spending is moving out of the trough as a result of improving corporate profits,” Chiwoong Lee , senior economist at Goldman Sachs Group Inc. in Tokyo, said before the report. “We see continuing improvement centered on manufacturing.” The Cabinet Office said machine orders are showing signs of picking up, after last month saying they “have stopped falling.” From a year earlier, they rose 9.4 percent. The yen traded at 91.39 per dollar at 8:55 a.m. in Tokyo from 91.36 before the report. New Prime Minister Today’s numbers provide cause for optimism for Prime Minister Naoto Kan, who took office yesterday and faces mid- term elections next month. The Bank of Japan raised its assessment of the economy last month amid a rebound in overseas demand and improved business spending. Governor Masaaki Shirakawa said this month that the nation’s recovery is becoming more self-sustained. Japanese companies are tapping demand from abroad, particularly the rest of Asia. Hitachi said last week that it plans capital spending of 1 trillion yen ($11 billion) over the three years and to invest 600 billion yen on research and development. The company forecasts its first annual profit in five years on cost cuts and rising sales of construction equipment and electronic components. Tokyo Electron Ltd. , the world’s second-largest maker of chip equipment, said last month that it will return to profit this fiscal year as a rebound in semiconductor demand boosts orders. The company plans to more than double capital spending to 35 billion yen. Merchant Sentiment Still, other recent reports showed Japan’s recovery may be slowing. The unemployment rate rose to a four-month high of 5.1 percent in April. Merchant sentiment fell for the first time in six months in May, the Cabinet Office said yesterday. Japan’s benchmark Topix stock index has lost 14 percent from this year’s high on April 15 on concern the European sovereign debt crisis will undermine the global recovery. The pickup in corporate investment is likely to be sluggish, said Junko Nishioka , chief economist at RBS Securities Japan Ltd. in Tokyo. “Even as corporate profits recover steadily, companies have low expectations for growth, giving them an incentive to keep ample cash on hand,” Nishioka said. “In this environment, companies have less of an appetite for capital investment.” Businesses cut spending for a 12th quarter in the three months ended March 31, even as profits surged and sales gained for the first time in nine quarters, Finance Ministry figures showed last week. Based on that report, the government may revise down first-quarter economic growth to an annual rate of 4.2 percent from its initial estimate of 4.9 percent, according to the median estimate of 18 economists surveyed by Bloomberg News. The gross domestic product data will be released tomorrow. To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net

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Miliband Says He’ll Seek U.K. Labour Party Leader’s Post to Replace Brown

May 12, 2010

By Kitty Donaldson May 12 (Bloomberg) — Former U.K. Foreign Secretary David Miliband became the first lawmaker to say he’ll run to replace Gordon Brown as leader of the Labour Party , now in opposition after 13 years in power. “Gordon Brown’s resignation means that there is now a vacancy for the leadership of the Labour Party and there will be an election for that post,” Miliband, 44, told reporters outside the Houses of Parliament in London today. “I will be a candidate in that election.” Miliband, nicknamed “Brains” by Tony Blair when he served in the former prime minister’s policy unit, became a lawmaker for the northeastern district of South Shields in 2001. He entered the Cabinet four years later, serving as environment secretary and then moving to the Foreign Office. Bookmaker William Hill Plc made Miliband its favorite to become Labour leader today at 2-7, meaning a bet for 7 pounds would win 2 pounds. David Cameron ’s coalition government of Conservatives and Liberal Democrats plans fixed parliamentary terms, raising the prospect that the next Labour leader will not face a general election until May 7, 2015. Miliband’s younger brother, Ed, also served in Brown’s Cabinet and has yet to say if he’ll be a candidate. He’s second favorite at 5-1, according to William Hill. Former Health Secretary Andy Burnham was in third place at 9-1. Former Work and Pensions Secretary Yvette Cooper ruled herself out earlier today, while her husband, Ed Balls , the former schools secretary, has not declared his intentions. Other candidates may include Labour lawmaker Jon Cruddas . ‘Sense of Humility’ Miliband said he would formally launch his campaign at the start of next week, adding that he feels a “deep sense of humility at the responsibility attached to that post.” “I believe that I can lead Labour to rebuild itself as the great reforming champion of social and economic change in this country,” Miliband said today. “This is a new era. New dangers. New opportunities. New possibilities.” Labour’s caretaker leader Harriet Harman , who was Brown’s deputy, and former Home Secretary Alan Johnson have both ruled themselves out of running. The Labour Party’s National Executive Committee will meet on May 18 to set the timetable for the leadership contest. The son of Ralph Miliband, a Marxist intellectual, David Miliband has degrees from both Oxford University and the Massachusetts Institute of Technology. He also worked as a speech writer to former Labour leader Neil Kinnock . He is married to violinist Louise Shackleton and the couple has two young sons. To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net .

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Japan’s Consumer Confidence Rises to Highest Since 2007 as Growth Recovers

April 18, 2010

By Aki Ito April 19 (Bloomberg) — Japan’s household sentiment rose to 40.9 last month from 39.8 in February, the Cabinet Office said today in Tokyo. To contact the reporter on this story: Aki Ito in Tokyo at aito16@bloomberg.net

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Carlyle’s Plan to Sell Taiwan’s Kbro Said to Have Stalled Over Media Rules

April 1, 2010

By Cathy Chan and Tim Culpan April 2 (Bloomberg) — Carlyle Group’s planned sale of a $1 billion stake in Kbro Co. to Taiwan Mobile Co. may be delayed until the government eases restrictions on state ownership of media companies, two people involved with the discussions said. Taiwan Mobile, which the government partially owns through Fubon Financial Holding Co., may extend the June 30 deadline to buy control of the cable-television operator, the people said, asking not to be identified because of confidentiality agreements. Neither side expected the restrictions to obstruct the deal when negotiations began last year, the people said. The rules hamper Taiwan Mobile’s plans to pass China Network Systems Inc. and Taiwan Broadband Communications to become the largest operator in a market where more than 80 percent of homes tune in to cable TV. The National Communications Commission is in talks with the Cabinet to allow government-related entities to indirectly own as much as 10 percent of media companies, Commissioner Lee Ta-sung said. “Under the current situation, they’re not allowed to merge because of the restrictions,” Lee said in a phone interview yesterday. “We’ve submitted our concept and proposal, and are now negotiating with the Cabinet.” Dorothy Lee , a Hong Kong-based spokeswoman at Carlyle, declined to comment. Josephine Juan, deputy spokeswoman at Taiwan Mobile, said the company plans to continue pursuing the acquisition. Washington-based Carlyle, the world’s second-largest buyout firm, bought control of Eastern Multimedia, which includes the cable TV unit that was renamed Kbro, for $1.5 billion in 2006. Waiting for Legislature Lee declined to say when he expects the rule to be amended because it would require approval from the Cabinet and legislature. The island’s second-largest phone carrier has gained 7 percent in Taipei trading since Sept. 16, when the company said it agreed to buy unlisted Kbro with 589 million Taiwan Mobile shares, giving it a 15.5 percent stake, and NT$440 million ($13.8 million) in cash. The benchmark Taiex index has added 7.2 percent over the same period. “It’s key to our future because it allows the convergence of telecom, cable and content,” said Taiwan Mobile’s Juan. “The problem is that the Taipei government owns a stake in Fubon.” Acquiring Kbro would boost cable TV to as much as 30 percent of Taiwan Mobile’s revenue, she said. Taipei City Government owns 14 percent of Fubon after Taipei Bank, in which it held a 44 percent stake, was acquired by the financial holding company in 2002. Fubon owns Taiwan Mobile shares through units including Fubon Securities Co., Fubon Life Insurance Co. and Fubon Insurance Co., according to the phone company’s Web site . Unintentional Owner “They didn’t mean to buy a media stake,” Commissioner Lee said of the Taipei City government’s ownership. “Most cases are due to indirect investment” by a government entity, he said. “This is why the NCC is trying to resolve this issue by allowing 10 percent indirect investment, to avoid such accidental cases,” he said. Taiwan introduced curbs on government and political party ownership of the media in December 2003, when then-President Chen Shui-bian sought to force the opposition Kuomintang to relinquish its interests in media operators. Fubon is 14 percent owned by the Taipei city government, data compiled by Bloomberg shows. To contact the reporter responsible for this story: Cathy Chan in Hong Kong at kchan14@bloomberg.net ; Tim Culpan in Taipei at tculpan1@bloomberg.net

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Japan’s Machinery Orders Fall 3.7%; Business Spending Revival May Be Slow

March 9, 2010

By Keiko Ujikane March 10 (Bloomberg) — Japanese machinery orders fell in January, a sign that any pickup in capital spending is likely to be slow. Orders, an indicator of business investment in three to six months, declined 3.7 percent from December when they increased 20.1 percent, the most since August 2000, the Cabinet Office said today in Tokyo. The median estimate of 27 economists surveyed by Bloomberg was for a 3.5 percent drop. Business spending remains the weak link of an economic recovery that has begun to spread from exporters to households. The government is likely to revise economic growth figures lower tomorrow after a report last week showed capital investment fell for an 11th straight quarter. The decline in orders “is payback from the large gain in December and they may gradually recover in the coming months,” Junko Nishioka , chief economist at RBS Securities Japan Ltd. in Tokyo, said before today’s report. “But the level of orders remains low, signaling companies remain cautious about capital spending.” A separate report showed producer prices fell 1.5 percent in February from a year earlier, the 14th consecutive drop, matching the median estimate of economists. The yen traded at 90.01 per dollar at 8:59 a.m. in Tokyo, from 90 before the reports were published. Revised GDP Spending on plant and equipment fell 18.5 percent in the fourth quarter from a year earlier, the Finance Ministry said last week. Gross domestic product grew at an annual 4 percent pace in the three months ended Dec. 31, slower than the 4.6 percent reported last month, according to the median forecast of 29 economists surveyed ahead of tomorrow’s revised figures. Companies including Panasonic Corp. are paring costs to protect profits. The world’s largest maker of plasma televisions may make its money-losing TV operations profitable in the year ending March 2011, helped by cost reductions and sales of 3-D sets, President Fumio Ohtsubo said last week. The Osaka-based company cut costs by 259 billion yen ($2.9 billion) in the nine months ended Dec. 31. Other data for January signal Japan’s recovery from its worst postwar recession remains intact. The unemployment rate dropped to a 10-month low of 4.9 percent and wages climbed for the first time in 20 months. Manufacturers increased output at a faster pace and exports climbed the most in almost 30 years, Hitachi Excavators Hitachi Construction Machinery Co. , Asia’s second-largest excavator maker, may double sales in China this quarter as spending on railroads and mining spurs demand, Chief Executive Officer Michijiro Kikawa said this month. “The manufacturing sector will continue to recover on a pickup in exports,” said Shunsuke Saito , an economist at Dai- Ichi Life Research in Tokyo. “So there’s a high chance that companies will have a better appetite for investment.” The Cabinet Office forecast last month that factory orders will increase 2 percent in the first quarter. Orders rose 0.5 percent in the three months ended Dec. 31, the first gain in seven quarters. To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net ;

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Berlusconi Passes Ad Rules That News Corp. Says Will Damage Pay-TV Market

March 1, 2010

By Steve Scherer and Chiara Remondini March 1 (Bloomberg) — Prime Minister Silvio Berlusconi ’s government approved lower advertising ceilings for pay TV that News Corp.’s Italian unit says will curtail its growth and that of other networks on Rupert Murdoch ’s satellite platform. New regulations will gradually limit the maximum amount of advertising per hour of pay television programming, to 12 percent in 2012 from 18 percent last year. Free-to-air broadcast channels, including those on Berlusconi’s Mediaset SpA network, will be able to increase advertising to a maximum of 20 percent per hour from 18 percent. “The measure isn’t good for Sky Italia,” said Alessandro Frigerio , a fund manager at RMJ SGR in Milan. Since Mediaset started its own pay TV business, the two companies “began stepping on each other’s toes,” he said. Berlusconi, 73, is the country’s biggest media owner. He controls Mediaset, Italy’s largest private TV broadcaster, which competes with Sky Italia. Berlusconi “dutifully” abandoned the Cabinet meeting in Rome today while the rules were approved because of his conflict of interest, according to an e-mailed statement from the premier’s office. The regulations never faced a binding parliamentary vote. Mediaset introduced pay-TV channels in January 2008 to challenge Sky Italia. In the first nine months of 2009, revenue at its Premium service rose 41 percent to 379.9 million euros ($513.2 billion). ‘Limiting Growth’ A draft of the new rules was criticized by Andrea Scrosati , vice president for corporate and market communications at Sky Italia SpA, in parliamentary testimony in January. The rules passed today included new ad ceilings and banned adult content from being broadcast on pay TV during daylight hours, according to a copy of the text and a confirmation by a spokeswoman for Communications Undersecretary Paolo Romani . “Advertising revenue is the engine of this sector. If you add limits, you’re limiting growth,” Scrosati said on Jan. 26. Sky, Italy’s largest pay-TV operator, has five pay-per-view channels running adult content during the day. While advertising is forecast to account for only about 6 percent of Sky Italia’s overall revenue in 2010, it will make up three-quarters of the earnings before interest and taxes, according to Claudio Aspesi , a senior research analyst at Sanford C. Bernstein Ltd. In London. At least 20 other companies operate on the Sky platform, including ESPN Inc., Sony Pictures Entertainment Inc., and The Walt Disney Company. Google Inc. on Jan. 15 said it was “concerned” that the plan to regulate Web TV was aimed at limiting access to its YouTube site and that it would create pressure on Internet service providers to police content. The final version of the directive narrows the kinds of Web sites regulated by the local authority to those with regular TV programming, without saying how copyright infringements perpetrated outside the country will be dealt with. Google and Sky Italia spokesmen had no immediate comment. To contact the reporters on this story: Steve Scherer in Rome at sscherer@bloomberg.net Chiara Remondini in Milan at cremondini@bloomberg.net

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Dutch Government Collapses Over Split on Extending Presence in Afghanistan

February 20, 2010

By Jurjen van de Pol Feb. 20 (Bloomberg) — The Dutch government collapsed for a fifth time since April 2002 after the Labor Party refused a NATO request to extend the country’s military stay in Afghanistan’s Uruzgan province. “Later today I will offer to Queen Beatrix the resignation of the ministers and state secretaries of the Labor Party,” said Prime Minister Jan Peter Balkenende after a 16-hour Cabinet meeting in The Hague today. Balkenende, a member of the Christian Democratic Alliance , said he will also put the functions of the remaining Cabinet members at the Queen’s disposal. Labor Party Deputy Prime Minister Wouter Bos on Feb. 17 fueled tensions by rejecting a request by NATO for the Dutch military to remain in Uruzgan, opposing Christian Democratic Alliance Foreign Minister Maxime Verhagen’s call to keep troops in the region. “As a member of the Cabinet we couldn’t even say that continuation of the mission in Uruzgan didn’t have sufficient support in parliament,” Bos, who is also finance minister, said at a press conference in The Hague today. “Under these circumstances the Labor Party couldn’t credibly be a part of the Cabinet.” The North Atlantic Treaty Organization asked the Netherlands earlier this year to prolong its military presence in Uruzgan with fewer than the current 2,000 troops to help train Afghan forces. Afghanistan Casualties “The existing decision will be executed, that means the end of the leading role of the Netherlands in Uruzgan per August 2010,” Defense State Secretary Jack de Vries of the Christian Democratic Alliance told Dutch broadcaster NOS today. Twenty-one Dutch soldiers have died in Afghanistan since an initial contingent of 220 infantry troops was deployed in Kabul in 2002. The troops are part of a NATO-led mission fighting against Taliban insurgents. The government promised parliament last year to decide on the military stay before March 1, two days before municipal elections. U.S. President Barack Obama has authorized 50,000 reinforcements for Afghanistan to reverse Taliban gains in the war that began in October 2001. With Dutch participation in Afghanistan now in its eighth year, polls show dwindling public support. About 36 percent of the population opposed the mission in January, up from 32 percent in December, while the number of supporters declined to 33 percent from 38 percent, according to a monthly poll by the Defense Ministry. Next Elections The clash over the extension of the Dutch mission in Uruzgan comes days after Balkenende survived a Feb. 17 no- confidence vote in parliament. The vote came after an independent Dutch commission said the government didn’t fully inform lawmakers about its backing for the U.S.-led invasion of Iraq in 2003. Balkenende, 53, will now tender the resignation of his ministers for the fourth time to Queen Beatrix. One option available is to bring forward parliamentary elections scheduled for May 2011. Elections could take place within three months after the resignation. Balkenende’s Christian Democratic Alliance would lose nine seats in parliament, allowing it to provide 32 of the 150 lawmakers, if elections were held today, according to a poll by Synovate on Feb. 18. Two weeks ago, the party held 34 seats in the poll. Labor to Gain With the municipal elections in less than two weeks, the Labor Party is set to gain from opposing the military presence in Uruzgan, winning 21 parliament seats in this week’s poll, up from 20 seats in the previous survey. Labor is still 12 seats away from the 33 it gained in the last elections. “We will keep the promise we made to the voters two years ago that the last Dutch troops will have left Uruzgan by the end of the year,” Bos told Dutch television RTL on Feb. 17. The coalition government of Christian Democrats, Labor and the Christian Union would lose its majority in the 150-seat lower house, the survey showed, falling to 61 seats from 80. The Freedom Party of Geert Wilders , the lawmaker who made a film linking the Koran to violence, will rise to 24 seats from the 9 seats it now occupies, making it the second-biggest party, according to the poll. Bos last year ruled out forming a coalition government with Wilders. The government’s collapse comes as the Netherlands recovers from the worst recession in at least six decades. Dutch government bureau CPB forecast the deficit will narrow to 4.7 percent of gross domestic product next year from 6.1 percent this year, bringing the budget gap closer to a target, set by the European Union in November, of 3 percent of GDP by 2013. No ‘Big Consequences’ “I don’t expect the government collapse to have big consequences for the 2011 budget,” said Charles Kalshoven , an economist at ING Groep NV in Amsterdam. “The CPB projections show the need for extra budget cuts is not that urgent.” The fall of his fourth government is another setback for Balkenende, who in November was passed over for the job of first European Union president. A former professor of Christian philosophy, Balkenende was sworn in to lead his first Cabinet in 2002, just two months after right-wing politician Pim Fortuyn was assassinated. The three-party coalition survived 87 days. Balkenende’s fourth Cabinet took office in February 2007. In April 2002, then-Labor Prime Minister Wim Kok’s coalition with the VVD and D66 resigned after a report by the Netherlands Institute for War Documentation concluded the Dutch army wasn’t prepared for its role in defending refugees in the Bosnian town of Srebrenica from a massacre in 1995. To contact the reporter on this story: Jurjen van de Pol in Amsterdam at jvandepol@bloomberg.net .

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Hatoyama Says Personal, Party Money Scandals Triggered Drop in Popularity

February 16, 2010

By Sachiko Sakamaki and Takashi Hirokawa Feb. 16 (Bloomberg) — Prime Minister Yukio Hatoyama said personal and ruling-party money scandals helped trigger his plunging popularity in Japan five months after sweeping to power. The Cabinet’s approval rating dropped to 35.7 percent from 47.1 percent last month and its disapproval score rose to 44.7 percent from 32.4 percent, Jiji Press reported Feb. 12. “One reason for this is the issue of politics and money,” Hatoyama told reporters today in Tokyo. “We must sincerely accept public sentiment.” Tokyo prosecutors on Feb. 4 indicted three former or current aides to Ichiro Ozawa , the ruling Democratic Party of Japan ’s No. 2 official. They were charged with violating campaign funding laws two months after two men who had worked for Hatoyama were accused of falsifying income sources. Some of that money was a gift from Hatoyama’s mother, and he was forced to pay about 600 million yen ($6.7 million) in back taxes. Hatoyama and Ozawa have repeatedly denied wrongdoing and the prime minister has rebuffed opposition calls for him to fire his top campaign strategist. DPJ lawmaker Tomohiro Ishikawa , among those indicted earlier this month, resigned from the party yesterday, while refusing to give up his seat. The administration’s approval rating exceeded 60 percent when Hatoyama took office Sept. 16 after ousting the Liberal Democratic Party from half a century of almost unbroken government control. Almost three-quarters of the 1,344 polled by Jiji this month said Ozawa should step down. The news wire’s survey didn’t provide a margin of error. Voter Disappointment “I’m disappointed,” said Kazumi Omuro, 51, manager of a drainage piping wholesaler close to Ozawa’s Tokyo residence, in an interview. “I voted for the DPJ last year hoping for a change, but their leaders have gotten caught in the same money scandals as the LDP. What I want them to do is to improve the economy.” Japan’s economy grew by an annual 4.6 percent pace in the three months ended Dec. 31 led by expanded exports, the Cabinet Office said yesterday, reducing the risk of falling back into a recession. Hatoyama said yesterday there’s little cause for optimism because employment remains “severe.” Opposition lawmaker Kaoru Yosano , a former finance minister, last week called Hatoyama the “king of tax evasion” in parliament, prompting an angry exchange. To contact the reporters on this story: Sachiko Sakamaki in Tokyo at Ssakamaki1@bloomberg.net ; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

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Google At Davos Is Like ‘A Successful And Secretive Nation’

January 29, 2010

Google is not a country. Eric Schmidt– who would be prime minister if it was –kept repeating the point at a briefing he gave at Davos this afternoon. They didn’t have a police force, they didn’t have jails, they didn’t have their own prosecutors. Only once did he slip and say : “Nevertheless we have to secure our borders.” In other respects Google is not unlike many other countries (Britain, say) which turn up at Davos with half the cabinet.

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Google At Davos Is Like ‘A Successful And Secretive Nation’

January 29, 2010

Google is not a country. Eric Schmidt– who would be prime minister if it was –kept repeating the point at a briefing he gave at Davos this afternoon. They didn’t have a police force, they didn’t have jails, they didn’t have their own prosecutors. Only once did he slip and say : “Nevertheless we have to secure our borders.” In other respects Google is not unlike many other countries (Britain, say) which turn up at Davos with half the cabinet.

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Lula Leaves Brazilian Hospital After Blood-Pressure Increase Prompts Tests

January 28, 2010

By Laura Price and Helder Marinho Jan. 28 (Bloomberg) — Brazilian President Luiz Inacio Lula da Silva has left a hospital after spending a night undergoing emergency medical exams for high blood pressure. Globo TV showed a smiling Lula leaving a hospital in the northeastern city of Recife accompanied by his Cabinet Chief Dilma Rousseff. The network said he was traveling to his home in Sao Bernardo do Campo to rest. Two medical exams performed on the 64-year-old Lula came back normal, Cleber Ferreira told journalists at the hospital, according to a posting on the presidential palace’s blog . As a precautionary measure Lula will no longer travel to the World Economic Forum’s annual meeting in Davos, Switzerland, Communications Secretary Franklin Martins said, according to the blog. Folha de S. Paulo newspaper said Lula became ill while on the plane ready to depart for Davos. Lula, who does not suffer from hypertension, saw his blood pressure rise to 180 over 120 after a full day of work in 86 degree Fahrenheit (30 degrees Celsius) heat, the doctor said. Central Bank President Henrique Meirelles will receive the forum’s first “Global Statesman” award on Lula’s behalf, Martins said. Editors: Joshua Goodman To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net ; Helder Marinho in Rio de Janeiro at hmarinho@bloomberg.net

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Greece Will Cut 2010 Spending by $14.5 Billion in EU Plan, Papandreou Says

January 14, 2010

By Maria Petrakis Jan. 14 (Bloomberg) — Greece will cut spending and raise revenue by about 10 billion euros ($14.5 billion) this year as part of a three-year plan adopted today to bring the European Union’s biggest budget deficit within the EU limit in 2012. “We will do whatever it takes,” Greek Prime Minister George Papandreou said in a televised speech to his Cabinet in Athens today. “Our country can and is obliged to exit as soon as possible this vicious circle of misery. We will not retreat; we will proceed quickly.” The plan, to be presented to the European Commission tomorrow, aims to cut the shortfall from 12.7 percent of output, more than four times the EU limit, to 8.7 percent this year. That reduction will be achieved even though the economy will contract 0.3 percent, the plan says. The budget deficit will shrink to 5.6 percent next year and 2.8 percent in 2012. Concern about the Greek government’s worsening finances and the credibility of its economic statistics last month prompted Fitch Ratings, Moody’s Investors Service and Standard & Poor’s to cut the country’s rating and fueled investor concern about a possible debt default. The premium that investors demand to hold Greek debt instead of German equivalents is at 261 basis points, six times more than it was two years ago. Attitude Change “The decision to present the plan on TV highlights a significant and welcome change of attitude from the government, suggesting increased commitment to fiscal consolidation,” Luigi Speranza , an economist at BNP Paribas in London, said in a note to investors. “But the social reaction to the plan is key and recent announcements of a strike in the public sector will keep investors concerned.” Unions representing civil servants announced a strike for Feb. 10 to protest austerity measures in the plan, which includes a state-hiring freeze this year and a wage cap for public workers earning more than 2,000 euros a month. The plan calls for a 10 percent cut in benefits for state employees and in operating expenditures at all ministries. It also includes measures to boost revenue in 2010 by more than 7 billion euros, mostly through raising taxes and fighting evasion, and more than 3.6 billion euros in spending cuts. A crackdown on tax dodging is projected to generate 1.2 billion euros in additional income this year and sales of unspecified state assets will generate 2.5 billion. Another 1.2 billion will come from increased pension payments, mostly through a clampdown on evasion of social-security contributions. Savings from the health-care system will reach 1.4 billion euros, according to the plan. The government will cut defense spending by 457 million euros and the reduction in non-salary benefits in the public administration will bring in 650 million euros, the plan says. The Brussels-based commission will make a recommendation on the plan to European finance ministers, who will rule on the measures at a meeting on Feb. 15-16. To contact the reporter on this story: Maria Petrakis at mpetrakis@bloomberg.net

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Japan’s Recovery Persists as Exports Expand to Asia, Economic Index Shows

January 7, 2010

By Aki Ito and Toru Fujioka Jan. 8 (Bloomberg) — Japan’s broadest indicator of economic health rose for an eighth month as growing demand from abroad boosted manufacturing. The coincident index , a composite of 11 indicators including factory production and retail sales, climbed to 95.9 in November from a revised 94.3 a month earlier, the Cabinet Office said today in Tokyo. The median estimate of 13 economists surveyed by Bloomberg was for an advance to 95.8. The report adds to evidence that Japan’s recovery persists as companies from Toyota Motor Corp. to Komatsu Ltd. benefit from more than $2 trillion in global stimulus spending. Analysts say accelerating growth in Asia will prompt manufacturers to continue increasing output, which climbed the most in six months in November. “From steel to metal parts, increasing exports to Asia is lifting activity at the country’s factories,” Kyohei Morita , chief economist at Barclays Capital in Tokyo, said before the report. “Production won’t keep rising at this pace forever. But exports will continue to recover, and that means Japan will be able to avert a double-dip recession.” The leading index , an indication of economic health in three to six months, rose to 91.2, a ninth monthly gain. Japanese shipments to Asia rose in November for the first time in 14 months. Industrial production climbed 2.6 percent, the most since May, and factories increased their workers’ overtime hours for an eighth month. Demand From China Toyota, the country’s largest carmaker, said this week its China sales rose 21 percent to 790,000 units in 2009. The automaker narrowed its full-year net loss forecast for a second time in November after government incentives boosted car demand in China and the U.S. Komatsu and Hitachi Construction Machinery Co., Asia’s two largest excavator makers, said this week that December sales in China more than doubled. Takahide Kiuchi , chief economist at Nomura Securities Co. in Tokyo, says exporters face a better outlook than sectors dependent on consumers at home, forming a “two-faced” recovery this year. Benefits from an export revival have been slow to spread to households because corporate profits are still too low for employers to afford higher personnel costs, according to Barclays’ Morita. That means workers won’t see paycheck increases anytime soon. Wages have dropped for 18 straight months, leaving less money for consumers to spend. Japan’s largest businesses slashed winter bonuses by 15 percent to 755,628 yen ($8,100), the steepest drop since the survey began in 1959, the Japan Business Federation said last month. Firms typically pay the bonus in December. To contact the reporters on this story: Aki Ito in Tokyo at aito16@bloomberg.net ; Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

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Fujii Won’t Commit to Attend Japan’s Parliament as Medical Checks Continue

January 4, 2010

By Kyoko Shimodoi and Aki Ito Jan. 5 (Bloomberg) — Japan’s Finance Minister Hirohisa Fujii refrained from committing to attend the next session of parliament, saying he will follow his doctor’s judgment as checks on his health continue. “My examination is continuing, and I’ll respect my doctor’s judgment,” Fujii said at a news conference after a Cabinet meeting in Tokyo. Fujii, who was admitted to hospital for high blood pressure and exhaustion Dec. 28, met separately with Prime Minister Yukio Hatoyama after the Cabinet session. The Diet is scheduled to convene later this month, when the finance minister would typically face lawmakers’ questions over the government’s proposed budget . “If it becomes clear that Fujii can’t fulfill his duties because of his health, clearly he’ll be replaced,” said Kyohei Morita , chief economist at Barclays Capital in Tokyo. For Hatoyama, losing his finance chief would come just as his public support tumbles and record government debt forces cutbacks to campaign promises. Hatoyama asked 77-year-old Fujii last year to postpone retirement and run in the August election that brought his Democratic Party of Japan to power for the first time. Fujii previously headed the Finance Ministry in 1993, and is a former budget examiner at the agency, giving him a deeper background in the area than other DPJ lawmakers. Fujii said today that the results of his medical checks will be released soon. Yen Policy As finance minister, Fujii is also responsible for overseeing exchange-rate policy. The yen climbed to a 14-year high of 84.83 per dollar on Nov. 27, prompting him to say the government may take action to stem its gains. The currency has since retreated about 8 percent, trading at 91.75 at 3:03 p.m. in Tokyo. “If there’s more need to intervene on behalf of the yen, Fujii has been very vocal on that issue in the past” so his hospitalization may become a problem, Morita said. Fujii’s admission to hospital followed weeks of deliberations over the administration’s first budget. Hatoyama unveiled a record budget of 92.3 trillion yen ($1 trillion) on Dec. 25. He was forced to pare back some campaign pledges to prevent an increase in debt issuance that risked swelling the nation’s borrowing costs. 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. Budget Debate Morita said Fujii’s health concerns were unlikely to disrupt budget debate in the Diet. “Considering that the DPJ on its own has a majority in the lower house, it’s unlikely that budget discussions will stall simply because of Fujii’s hospitalization,” he said. Japan’s parliament must approve the budget for it to take effect as laid out for the year starting April 1. Hatoyama’s party has a majority in the lower house, and his two coalition partners in the upper body have backed the proposed spending. In the course of compiling the budget, Fujii urged ministers to restrain outlays after their requests amounted to an unprecedented 95 trillion yen. Fujii said the government must keep its promise of containing bond sales around 44 trillion yen to contain the world’s largest public debt burden — even after Hatoyama indicated he wouldn’t strictly adhere to the cap should more spending be necessary. “The Cabinet has worked hard to keep new bond sales at 44 trillion yen, so when the leader of that process is gone, some of that discipline may disappear too,” said Masamichi Adachi , senior economist at JPMorgan Chase & Co. in Tokyo. “I don’t think the budget will fall apart, but the discussions may take more time, and we may see some confusion.” To contact the reporters on this story: Kyoko Shimodoi in Tokyo at kshimodoi@bloomberg.net ; Aki Ito in Tokyo at aito16@bloomberg.net

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Hatoyama Says He Won’t Resign After Two Former Aides Indicted Over Funds

December 24, 2009

By Takashi Hirokawa and Taku Kato Dec. 24 (Bloomberg) — Japan’s Prime Minister Yukio Hatoyama said he won’t resign after prosecutors charged two former aides with falsifying the source of 400 million yen ($4.4 million) of campaign funds, including money from his mother. “Talking about whether I will stay or leave would be tantamount to abandoning my responsibilities to the public,” Hatoyama said at a press briefing in Tokyo today. He doesn’t face charges, the Tokyo Prosecutors Office said in a statement. Hatoyama, 62, also said he will pay more than 600 million yen in taxes dating back to 2002 on 1.26 billion yen given by his mother, eldest daughter of the founder of Bridgestone Corp., the world’s largest tire manufacturer by sales. The funding investigation and unpaid taxes threaten to further undermine Hatoyama’s waning popularity as his government struggles to sustain an economic recovery and implement campaign pledges. The approval rating for his cabinet has fallen below 50 percent for the first time since the Democratic Party of Japan’s landslide general election victory in August. “How Prime Minister Hatoyama explains himself to the public will come under scrutiny,” said Hirotada Asakawa , a Tokyo-based political analyst. “If the support rate for the cabinet were to drop below 40 percent, it might be difficult for the administration to stay on.” Opposition leader Sadakazu Tanigaki said earlier that Hatoyama was “making a mockery of honest taxpayers” in comments broadcast by NHK television. Aides Charged Former aides Keiji Katsuba and Daisuke Haga were charged today with misrepresenting the source of donations to Hatoyama’s campaign fund since 2004, the prosecutors’ statement said. His predecessor as DPJ leader, Ichiro Ozawa , resigned after one of his former assistants was arrested in March and charged with concealing 35 million yen in corporate donations. Support for Hatoyama’s cabinet declined 7.6 percentage points to 46.8 percent, Jiji Press reported on Dec. 18. The Jiji survey was conducted between Dec. 11 and 14. “The public will naturally want to know why I wasn’t aware that I was receiving 180 million yen in political funds annually,” Hatoyama said. “My parents and I were used to being taken care of by the people close to us. To be honest, I almost never had any opportunities to speak directly with my parents or the people close to me about money.” To contact the reporters on this story: Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net ; Eijiro Ueno in Tokyo at e.ueno@bloomberg.net .

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Hatoyama Won’t Face Prosecution Over Japan Campaign Funding; Two Indicted

December 24, 2009

By Takeshi Hirokawa and Eijiro Ueno Dec. 24 (Bloomberg) — Japan’s Prime Minister Yukio Hatoyama won’t face charges over possible campaign funding violations that resulted in indictments today for two of his former aides, the Tokyo Prosecutors Office said in a statement. Keiji Katsuba and Daisuke Haga were charged with misrepresenting the source of about 400 million yen ($4.4 million) in donations to Hatoyama’s campaign fund before he took office, the statement said. Hatoyama has no plans to step down, Chief Cabinet Secretary Hirofumi Hirano told reporters today. The investigation threatens to further undermine Hatoyama’s waning popularity following his Democratic Party of Japan’s landslide general election victory in August. The approval rating for his cabinet fell below 50 percent for the first time since taking power, Jiji Press reported last week, citing its own monthly opinion poll. “How Prime Minister Hatoyama explains himself to the public will come under scrutiny,” Hirotada Asakawa , a Tokyo- based political analyst, said in a telephone interview. “If the support rate for the cabinet were to drop below 40 percent, it might be difficult for the administration to stay on.” The indictments follow the arrest of an aide to former DPJ leader Ichiro Ozawa in March for violating campaign finance laws. Takanori Okubo was charged with concealing 35 million yen in donations from Nishimatsu Construction Co., prompting his boss to step down as party leader. Support for Hatoyama’s cabinet declined 7.6 percentage points to 46.8 percent, a second monthly decline, Jiji reported on Dec. 18. The survey was conducted between Dec. 11 and 14. “There’s no need for the Prime Minister to resign,” Hirano told reporters after the indictments were announced. “He wants to continue to fulfill his duty to serve the people.” To contact the reporters on this story: Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net ; Eijiro Ueno in Tokyo at e.ueno@bloomberg.net .

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Japan Machine Orders Fall 4.5%, Signaling Recovery Too Weak for Investment

December 9, 2009

By Keiko Ujikane Dec. 10 (Bloomberg) — Orders for Japanese machinery fell 4.5 percent in October from a month earlier, the Cabinet Office said today in Tokyo. The median estimate of 27 economists surveyed by Bloomberg was for a 4.4 percent drop. To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net

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Japan Announces $81 Billion Stimulus as Recovery, Hatoyama’s Approval Wane

December 8, 2009

By Keiko Ujikane and Toru Fujioka Dec. 8 (Bloomberg) — The Japanese government unveiled a 7.2 trillion yen ($81 billion) economic stimulus package amid signs the recovery and Prime Minister Yukio Hatoyama ’s popularity are waning. Hatoyama’s first stimulus plan includes 3.5 trillion yen to help regions, 600 billion yen for employment and 800 billion yen on environmental initiatives, the Cabinet said today in a statement in Tokyo. The measures had been delayed because of haggling within the coalition government. The Democratic Party of Japan, which took office in September pledging to support households battered by two decades of economic stagnation, is grappling with a slide in prices and a surging yen. The government will say third-quarter economic growth was slower than initially reported in revised figures tomorrow, according to economists surveyed by Bloomberg News. “It’s a necessary step,” said Martin Schulz , senior economist at Fujitsu Research Institute in Tokyo. “Without another stimulus package, it’s very likely that the economy will fall back into recession. The government simply can’t risk this right now.” The yen has weakened since climbing to a 14-year high of 84.83 against the dollar on Nov. 27. The Japanese currency traded at 89.07 at 11:41 a.m. in Tokyo from 88.99 before the announcement. The Nikkei 225 Stock Average fell 0.5 percent. Deflation Risk “Risk factors include a deterioration in employment conditions, sluggish demand because of deflationary pressure, a rise in long-term interest rates and movements in the currency markets,” the statement said. “Excessive and disorderly movements in foreign-exchange rates can inflict considerable adverse impact on the economic recovery and the government will watch movements sternly.” Japanese policy makers are adding stimulus measures just as their counterparts around the world consider how to withdraw them as the global economy recovers. The Bank of Japan released a 10 trillion yen credit program last week, satisfying government calls for it to do more to fight declining prices. Under the program, the central bank will offer three-month loans to commercial banks at 0.1 percent interest. In a meeting with central bank Governor Masaaki Shirakawa last week, Hatoyama applauded the move and refrained from pushing for further monetary easing. Kamei’s Call The People’s New Party, a junior coalition member headed by Financial Services Minister Shizuka Kamei , blocked the stimulus plan last week, calling for a larger package to defeat deflation. Coalition parties agreed to boost the size of the measures by 100 billion yen to accommodate those requests. That increase will need to be funded with so-called construction bonds, Motohisa Furukawa , a vice minister at the Cabinet Office, told reporters late yesterday. The government said some of the package will be paid for with funds frozen from the previous administration’s extra budget. It wants to avoid selling new bonds “as much as possible,” the statement said. Japan has the world’s largest public debt , with liabilities that are approaching twice the size of the economy. Bond Sales Finance Minister Hirohisa Fujii said bond sales for the current fiscal year will exceed tax revenue for the first time in the postwar period. The government will sell 53.5 trillion yen in bonds, more than the 44 trillion yen budgeted in April, he said. Tax revenue will slump to 36.9 trillion yen, less than the 46 trillion yen projected. Today’s package includes 3 trillion yen in tax grants to local governments to make up for a revenue shortfall. Heizo Takenaka , who was economy minister under former Prime Minister Junichiro Koizumi, yesterday attacked the government for lacking policy direction. “There’s no control tower in the policy-making system,” he said in an interview in Seoul. The premier’s sliding popularity may hurt his party’s momentum ahead of upper house elections in July 2010. His approval rating fell below 60 percent for the first time, declining to 59 percent from last month’s 63 percent, the Yomiuri newspaper reported yesterday. Exports Improve Japan’s exports fell at the slowest pace in a year in October as worldwide government spending spurred demand for the nation’s products, a Finance Ministry report showed today. That helped the trade surplus expand 42.7 percent from a year earlier to 1.4 trillion yen. Other reports show the expansion may be weakening. Industrial production advanced at the slowest pace in eight months in October, wages slid for a 17th month, and consumer prices fell a near-record 2.2 percent. Gross domestic product rose at an annual 2.8 percent rate in the three months ended Sept. 30, according to the median estimate of 17 economists surveyed by Bloomberg News ahead of tomorrow’s revised figures. That would be slower than the 4.8 percent the Cabinet Office initially reported, reflecting figures last week that showed companies cut capital spending at a record pace in the period. The world’s second-largest economy will probably shrink 5.4 percent this year, more than a 4.2 percent contraction in the euro area and a 2.7 percent drop in the U.S., the International Monetary Fund forecast in October. To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net ; Keiko Ujikane in Tokyo at kujikane@bloomberg.net

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Takenaka Says Government Lacks Policy `Control Tower’ as Coalition Bickers

December 7, 2009

By Seyoon Kim Dec. 7 (Bloomberg) — Heizo Takenaka , a former Japanese economy minister credited with securing the country’s longest postwar expansion, attacked the coalition government for lacking policy direction as it haggles over a stimulus package. “The decision-making system in the current government is very messy,” Takenaka, who served in cabinet posts under Junichiro Koizumi from 2001 to 2006, said in an interview today on the sidelines of a seminar in Seoul. “There’s no control tower in the policy-making system.” Prime Minister Yukio Hatoyama’s first economic aid package will be completed tomorrow, the government’s top spokesman said, after it was blocked last week by a junior coalition party. The delay threatens to undermine the premier’s leadership in reviving the world’s second-largest economy, which faces deflation and a yen that reached a 14-year high last month. Lack of leadership was cited as one reason why Hatoyama’s approval rating fell to 59 percent from last month’s 63 percent, according to a Yomiuri newspaper survey published today. The report didn’t provide a margin of error. Takenaka said the decision by the Democratic Party of Japan-led government to replace the country’s economic advisory panel with a national strategy bureau has made decision making “messy.” He said the smaller coalition members have “very strong bargaining power” and may succeed in increasing the size of the stimulus package. Hatoyama had been preparing spending of as much as 4 trillion yen ($46 billion), Finance Ministry officials familiar with the matter said last week. Chief Cabinet Secretary Hirofumi Hirano said today that the government is “putting on the finishing touches” in time for the package to be considered by the cabinet tomorrow. To contact the reporter on this story: Seyoon Kim in Seoul at skim7@bloomberg.net

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Japanese Machinery Orders Rise 10.5%, More Than Twice as Much as Estimated

November 10, 2009

By Jason Clenfield and Tatsuo Ito Nov. 11 (Bloomberg) — Orders for Japanese machinery rose more than economists estimated in September, signaling that a recovery in corporate profits may be encouraging firms to start spending on plant and equipment. Orders , an indicator of business investment in three to six months, climbed 10.5 percent from a month earlier, the Cabinet Office said today in Tokyo. The median estimate of 25 economists surveyed by Bloomberg was for a 4.1 percent gain. Today’s report suggests that Japanese companies are becoming confident enough to increase spending as their earnings recover since plunging in the first quarter of the year. Companies from Toshiba Corp. to Elpida Memory Inc. have announced plans to build new factories or increase capacity in the past month after beating their own earnings estimates. “The bottom is probably behind us for capital spending,” said Masamichi Adachi , a senior economist at JPMorgan Chase & Co. in Tokyo. “The retrenchment phase is over and the corporate sector as a whole should gradually pick up in a self-sustained way.” The yen traded at 89.75 per dollar at 8:54 a.m. in Tokyo from 89.76 before the report was published. A report due Nov. 16 will probably show Japan’s economy grew at a 2.9 percent annualized pace last quarter, according to the median estimate of economists surveyed by Bloomberg. It will be the second consecutive expansion since the economy emerged from its worst postwar recession and the first since Prime Minister Yukio Hatoyama’s government took power in September. Add to Growth Business investment may add to growth for the first time since the first three months of 2008, analysts predict. An increase in capital spending, which accounted for about a third of the economy’s growth during the six-year expansion that ended in 2007, would lend stability to a recovery that has depended on temporary factors including government stimulus and a rebound in production spurred by run down inventories. Improved earnings have provided companies with money to invest, while economic growth in Japan’s overseas markets has rekindled demand. Exports grew 10.4 percent last quarter from the previous period, according to Cabinet Office trade figures measured by volume. Pretax profit at the more than 900 Japanese companies that had announced earnings as of Nov. 10 doubled in the quarter ended Sept. 30 from the previous three months, according to data compiled by Bloomberg News. Even after the gain, profit was still 40 percent below the same period last year. More Spending Better earnings are already encouraging companies to spend. Toshiba, Japan’s biggest maker of semiconductors, said last month it will spend 25 billion yen ($277 million) to build a new lithium-ion battery plant in Niigata, northern Japan. Cost cuts last quarter helped the company narrow its loss to 200 million yen from 27 billion yen during the same period last year. Elpida Memory , Japan’s largest computer memory-chip maker, last week raised its estimate for capital spending in the fiscal year by 50 percent to 60 billion yen, citing increased orders for gear to make more advanced semiconductors. Shares of machinery makers have risen this year, with Fanuc Ltd. up 21 percent and Advantest Corp. climbing 41 percent. “Executives feel that we’ve escaped the crisis and now we have to think about a more normal situation,” said JPMorgan’s Adachi. “It’s less benign than in the five years through 2007, but there’s still going to be positive growth and you have to compete with competitors in Asia.” To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito@bloomberg.net .

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Japan Industrial Production Rises a Seventh Month, Best Streak in 12 Years

October 28, 2009

By Jason Clenfield and Tatsuo Ito Oct. 29 (Bloomberg) — Japanese manufacturers increased production for a seventh month in September, extending the longest stretch of gains in 12 years, as spending by governments worldwide helped to revive trade. Factory output rose 1.4 percent last month from August, when it climbed 1.6 percent, the Trade Ministry said today in Tokyo. The median estimate of 30 economists surveyed by Bloomberg News was for a 1 percent gain. Production has rebounded since a record export collapse in the first quarter left half the country’s factory capacity sitting idle. Growth in China, fueled by a 4 trillion yuan ($586 billion) stimulus package, is generating sales for manufacturers including Hitachi Construction Machinery Co. , which this week said it has finally worked off inventory that piled up during the recession. “Inventories and export growth are the drivers,” said Sean Yokota , an economist at UBS AG in Tokyo. “There is demand out there. First it was led by China and exports to Asia, but slowly you’re getting exports to the U.S. starting to rise.” Overseas shipments in the quarter ended Sept. 30 rose 10.4 percent from the previous three months, according to the Cabinet Office’s measure of trade volume, which strips out the effects of currency moves. The yen has gained more than 4 percent against the dollar in the past three months, reducing the value of export sales when repatriated. Japan’s currency traded at 90.68 per dollar at 8:52 a.m. in Tokyo from 90.70 before the report. Asian Demand Asian demand is spurring the export revival. China , the world’s third-largest economy and Japan’s biggest overseas market, grew 8.9 percent last quarter, the fastest pace in a year. Surging demand in the market was one of the main reasons Honda Motor Co. this week tripled its full-year profit forecast. The U.S., Japan’s second-largest customer, is also showing signs of recovery. Retail sales have risen in three of the past five months and a report later today may show the economy grew an annualized 3.2 percent last quarter, the first expansion in more than a year, according to the median estimate of analysts. Hitachi Construction, Japan’s second-largest maker of digging equipment, this month raised output at its largest domestic plant to about 50 percent of capacity from below 10 percent in September. ‘Tough Time’ “We faced a tough time,” Chief Financial Officer Nobuhiko Kuwahara said this week in Tokyo after the company announced it returned to profitability last quarter. “We’ve come out of the bottom and resumed production.” Still, gains in Japan’s output since March have yet to generate employment , trigger capital investment or return companies like Nippon Yusen K.K or Toyota Motor Corp. to profit. Even after seven months of rising output, factories are using only about two-thirds of their capacity. Exports, while improving, remain about 22 percent below last year’s level, according to the Cabinet Office’s measure of trade volume. Nippon Yusen , Japan’s biggest shipping line, this week widened its loss forecast for the fiscal year to 27 billion yen ($300 million) from 5 billion yen as a dearth of demand for container transport caused shipping rates to plummet. The Tokyo-based company also cut by half its plans to buy new vessels from 2011. Toyota’s domestic output fell 11 percent in September from a year earlier, the company said yesterday. It forecasts a loss this business year and says it will sell only 6.5 million vehicles, compared with the 9 million it’s capable of producing. “Even though we have increases in industrial production, that doesn’t mean workers will get paid more, or more investment will be following,” said Richard Koo , chief economist at Nomura Research Institute in Tokyo. “The initial fall was so large we’re only maybe one third of the way back.” To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito@bloomberg.net .

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Russia Economy May Shrink Less-Than-Expected 7.5% This Year, Medvedev Says

October 11, 2009

By Maria Ermakova Oct. 11 (Bloomberg) — Russia’s economy may contract by 7.5 percent this year after performing worse than anyone had predicted, President Dmitry Medvedev said in a televised speech. “I must admit that we sunk below our lowest expectations,” Medvedev said in an interview to be broadcast today at 9 p.m. Moscow time on state television. “The real damage to our economy was far greater than anything predicted by ourselves, the World Bank, and other expert organizations.” The government predicted last month that the economy will shrink by 6.8 percent in the second half, for a full-year contraction of 8.5 percent. Gross domestic product declined by a record 10.9 percent in the second quarter. Russia will return to growth in 2010, the government forecast in a report published on its Web site. Unemployment “is a clear challenge for the president, the Cabinet and other government authorities,” Medvedev said. The jobless rate fell to 7.8 percent in August, lower than previously estimated, from 8.3 percent in July on rising seasonal demand for agriculture and construction. The number of unemployed was 6 million, the Federal Statistics Service said. The government must press to bring down inflation to 5 percent to 7 percent, according to the president. “Then we will be able to lend at normal rates,” he said. “Then our citizens will be able to obtain mortgages and consumer loans at reasonable rates.” Russian inflation fell to the lowest in two years in September as the cost of food slipped and the economic decline depressed consumer demand, paving the way for the central bank to cut rates further. Inflation fell to 10.7 percent from 11.6 percent in August, according to the statistics service. Annual consumer-price growth may be “considerably lower” than 11 percent, allowing the bank to continue cutting rates, Bank Rossii Chairman Sergey Ignatiev said on Sept. 30. The rate in 2010 may be below the government’s official forecast for 9 percent to 10 percent, he said. Russia’s goal is “to achieve a balanced budget or a budget with a minimal deficit within a year,” Medvedev said in the televised comments. “All the government’s efforts and decisions should be directed toward this end.” Russia’s budget deficit held steady at 4.7 percent of gross domestic product in the year through September as the government spent 1.35 trillion rubles ($43.9 billion) more than it collected, the Finance Ministry reported Oct. 9. To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net

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Japan Machinery Orders Fall More-Than-Estimated 9.3% as Recovery Weakens

September 9, 2009

By Jason Clenfield and Tatsuo Ito Sept. 10 (Bloomberg) — Japanese machinery orders fell more than economists forecast in July as declining profits forced companies to limit investment even amid signs overseas markets are recovering. Orders , an indicator of capital spending in the next three to six months, declined 9.3 percent from June, when they jumped 9.7 percent, the Cabinet Office said today in Tokyo. Economists surveyed by Bloomberg News projected a 3.5 percent decline. Companies including Toyota Motor Corp. are cutting costs to limit losses even after a rebound in demand helped Japan climb out of its worst postwar recession last quarter. More than a third of the country’s factory capacity is sitting idle, leaving little need for investment in plant and equipment, spending that last year made up 15 percent of the economy. “There’s been an enormous wave of confidence in the stock markets but that hasn’t been shared by business leaders,” said Martin Schulz , senior economist at Fujitsu Research Institute in Tokyo. “Producers know that lots of the improvement in exports and in the overall outlook has been on the back of government programs and they’re still troubled by the outlook.” More than $2 trillion in emergency spending by governments worldwide has fueled a global economic revival. China, Japan’s biggest export market, expanded 7.9 percent last quarter from a year earlier, while the U.S. shrank an annualized 1 percent, its best performance since the second quarter of 2008. GDP Growth Japan’s gross domestic product grew at a 3.7 percent annual rate last quarter, buoyed by exports and a stimulus package that spurred consumer spending on cars and electronics. Revised figures are due tomorrow. Economists don’t expect the rebound to last as the effects of the stimulus packages fade, forcing the Democratic Party of Japan, which won national elections on Aug. 30, to contend with a weakening economy. Companies plan to cut capital spending 9.2 percent this fiscal year, a survey published last month by the Development Bank of Japan showed. Reductions by manufacturers will be the steepest since 1993. Toyota, which estimates it will make about a third fewer cars this year than it has the capacity to build, said last month it will close an assembly line at its Takaoka plant in central Japan. The carmaker plans to cut capital spending by 36 percent in the year ending March 31. Loss Forecast Spending cuts by electronics-makers are taking a toll on companies such as Ishii Hyoki Co., a Hiroshima-based producer of equipment used to make circuit boards. The company, which had forecast earnings of 579 million yen ($6.3 million), said last week it’s now expecting a 393 million yen loss. “Orders are down and at this point it’s hard to make a forecast,” said company spokesman Hironobu Seo. “Our customers are running below capacity, so there isn’t much demand for new equipment.” Corporate cost cuts have also hurt Japan’s workers, darkening the outlook for retailers including Seven & I Holdings Co., which last month lowered its profit forecast and said it may close 20 supermarkets. The unemployment rate surged July to a record 5.7 percent in July and employees who have managed to keep their jobs have suffered unprecedented pay cuts . To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito@bloomberg.net .

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Japanese Stocks Advance, Following Gains in U.S.; Toyota, Komatsu Climb

September 9, 2009

By Masaki Kondo Sept. 10 (Bloomberg) — Japanese stocks rose after U.S. shares advanced to an 11-month high, outshining a bigger-than- estimated drop in Japan’s machinery orders. Toyota Motor Corp., which gets almost a third of its revenue in North America, rose 1.1 percent. Komatsu Ltd., the world’s No. 2 maker of earthmoving equipment, advanced 1.5 percent after machinery makers helped lift U.S. shares. “Speculators are buying because the momentum of the economic recovery is still strong and there’s no reason to sell,” said Mitsushige Akino , who oversees the equivalent of $652 million at Ichiyoshi Investment Management Co. in Tokyo. “Even a sharp earnings recovery in 2010 has been fully priced into the market, so institutional investors are reluctant to buy and only speculators are active.” The Nikkei 225 Stock Average rose 0.7 percent to 10,385.35 as of 9:02 a.m. in Tokyo. The broader Topix index added 0.8 percent to 946.99, with almost twice as many shares gaining as declining. In New York, the Standard & Poor’s 500 Index climbed 0.8 percent yesterday to the highest level since Oct. 6, with General Electric Co. adding 2.6 percent. Goldman Sachs Group Inc. boosted its investment rating on multi-industry companies to “attractive” from “neutral,” saying they tend to outperform when manufacturing returns to growth. The dollar depreciated against the yen to as much as 91.61 overnight, a level not seen since Feb. 17. Japanese machinery orders dropped 9.3 percent in July from the preceding month, the Cabinet Office said before markets opened. Economists had estimated a 3.5 percent decline in orders, an indicator of capital spending in the next three to six months. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Japan Emerges From Recession; Stocks Decline as Growth Misses Estimates

August 16, 2009

By Jason Clenfield and Tatsuo Ito Aug. 17 (Bloomberg) — Japan’s economy grew for the first time in five quarters as a revival in exports and consumer spending helped the country climb out of its worst postwar recession. Gross domestic product expanded at an annual 3.7 percent pace in the three months ended June 30, following an 11.7 percent decline in the previous quarter, the Cabinet Office said today in Tokyo. The median estimate of 22 analysts surveyed by Bloomberg News was for 3.9 percent growth. The recovery may not be sustained once the $2 trillion in worldwide stimulus that propped up sales for exporters from Toyota Motor Corp. to Kubota Corp. runs out. Some 40 percent of factories still sit idle, forcing companies to cut costs and leaving the winner of an Aug. 30 election with the challenge of staving off unemployment that’s approaching a record high. “The growth we’re seeing is based on government spending and a rebound from the very low level in the previous quarter,” said Seiji Shiraishi , chief economist at HSBC Securities Japan Ltd. in Tokyo. “Companies are burdened with huge overcapacity in terms of equipment and people. It’s much worse than in previous recoveries.” The yen traded at 94.64 per dollar at 9:24 a.m. in Tokyo from 94.76 before the report. The Nikkei 225 Stock Average dropped 1.4 percent, paring its advance to 48 percent since it touched a 26-year low on March 10. The yield on the benchmark 10-year bond fell one basis point to 1.365 percent. Led by Exports From the previous quarter , the world’s second-largest economy grew 0.9 percent. Economists estimated 1 percent. Exports led the expansion, jumping 6.3 percent from the previous three months. Net exports, or overseas shipments minus imports, contributed 1.6 percentage points to quarter-on- quarter growth. Japan’s recovery hinges largely on its overseas markets, which are showing signs of stabilizing. A report last week showed the euro area contracted 0.1 percent last quarter, the region’s best performance in more than a year. The U.S. shrank at an annualized rate of 1 percent, the least in a year. China , Japan’s top overseas market, grew 7.9 percent from a year ago. Confidence in the world economy surged to a 22-month high in August, according to a Bloomberg survey of users on six continents. The resurgence in demand from abroad wasn’t enough to convince companies to spend more on plant and equipment. Business investment, which makes up about 15 percent of the economy, fell 4.3 percent last quarter, today’s report showed. Consumer Spending Consumer spending, which accounts for more than half of the economy, rose 0.8 percent, adding 0.5 percentage point to the expansion, the Cabinet Office said. Prime Minister Taro Aso’s 25 trillion yen ($263 billion) in stimulus has lifted household confidence to its highest level since 2007. The packages, which include incentives to encourage the purchase of eco-friendly products, are the main reason Toyota is predicting its domestic sales will rise for the first time in five years. Aso’s ruling Liberal Democratic Party is likely to lose the lower house election to the opposition Democratic Party of Japan, which has never held power before. Some 43 percent of voters support the DPJ, almost double the 26 percent of those who support the LDP, a Nikkei Inc. and TV Tokyo Corp. poll released this month showed. Emergency spending by governments worldwide has buoyed sales makers of cars and electronics, and companies including Nippon Steel Corp. are filling orders from manufacturers restocking inventories depleted during the recession. Kubota is selling more farming equipment in China. Bank of Japan Bank of Japan Governor Masaaki Shirakawa said last week the recovery may not be strong and there’s no guarantee that demand for the country’s products and services will gain momentum. The central bank will keep the benchmark interest rate at 0.1 percent at least through 2010, according to economists surveyed by Bloomberg. Nippon Steel Corp. , the country’s biggest mill, this month restarted one of its idled furnaces to fill orders from makers of cars and electronics rebuilding inventories. The company is still running 25 percent below full capacity. Economists predict low production levels will drive the jobless rate to a record 5.8 percent next year from the current 5.4 percent. Japanese workers are also suffering unprecedented wage cuts that are likely to damp spending once the effect of the government’s stimulus package tapers off. Cost cuts by corporate Japan are taking a toll on companies such as Canon Inc. The nation’s biggest maker of office equipment last month forecast sales will drop 22 percent this year as clients limit spending on copiers and other business tools. To cope with that, Canon said it will pare its own expenses by 220 billion yen. To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito2@bloomberg.net

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Yen Advances to Two-Week High Against Euro on Japan’s Economic Expansion

August 16, 2009

By Yoshiaki Nohara and Ron Harui Aug. 17 (Bloomberg) — The yen rose to a two-week high against the euro after a government report showed Japan’s economy grew last quarter as a global rebound helped the country climb out of its worst postwar recession. Japan’s currency advanced against all 16 major counterparts after the report showed the world’s second-largest economy grew for the first time in more than a year on a rebound in exports and consumer spending. The euro also slid against the yen for a second day after Asian stocks extended a drop in global equities, damping demand for higher-yielding assets. “Any growth is encouraging, even if it’s coming at a very slow pace,” said Sean Callow , a currency strategist at Westpac Banking Corp. in Sydney. “Having a positive domestic economic reading is also positive for the yen by discouraging outflows.” Japan’s currency rose to 133.90 per euro, the highest since July 30, as of 9:09 a.m. in Tokyo from 134.84 in New York on Aug. 14. The euro dropped to $1.4157 from $1.4203. The yen gained to 94.61 per dollar from 94.94. The MSCI Asia Pacific Index of regional shares declined 0.9 percent, halting a two-day gain. “We suspect some easing in risk appetite will help support safe-haven currencies like the yen,” said Danica Hampton , a currency strategist at Bank of New Zealand Ltd. in Wellington. Japan’s gross domestic product expanded an annualized 3.7 percent in the second quarter, following a record drop of 14.2 percent in the three months ended March 31, the Cabinet Office reported in Tokyo today. That compared with a 3.9 percent rise forecast by analysts surveyed by Bloomberg News. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net ; Ron Harui in Singapore at rharui@bloomberg.net .

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Taiwan Faces More Rain, Mudslides as Rescuers Search for Typhoon Survivors

August 12, 2009

By Yu-huay Sun and Tim Culpan Aug. 13 (Bloomberg) — Taiwan warned of more rain and mudslides as rescuers searched for scores of people missing after Typhoon Morakot triggered the worst floods in half a century and left more than 100 dead. Southern Taiwan, worst-hit by the storm, may experience heavy rains today and landslides are possible in mountainous areas, the Central Weather Bureau said in an advisory. The death toll climbed to at least 103 people yesterday, after rescuers found a total of 32 bodies buried in two mudslides in Kaohsiung county, the state-run Central News Agency reported , citing the Central Emergency Operation Center. Sixty- one people are still missing and mud and debris have cut off remote villages and left hundreds awaiting rescue, CNA said. Almost 1,000 people were found alive in southern villages buried by mudslides after the typhoon hit from Aug. 6 to 9. Helicopters were sent to help about 700 survivors discovered in Shiao Lin and Namahsia in Kaohsiung, Martin Yu, a National Defense Ministry spokesman, said yesterday. About 200 people were found in Ching Ho village and 70 in Wu Li Pu, CNA reported. Hu Li-chu, a 30-year-old housewife and her three children, aged between 5 and 7 years old, were covered in mud when they were rescued from Namahsia. “We were praying for a helicopter to come save us,” she said. “The rest of our family is still back in Namahsia.” They slept on the mountainside for three days and drank rainwater, she said. President’s Visit President Ma Ying-jeou visited two rescue centers in the south yesterday. Speaking at one center, he said there isn’t any need to issue an emergency order in the aftermath of the typhoon because existing measures are adequate. Premier Liu Chao-shiuan instructed agencies to come up with a resettlement plan for survivors within two days, comparing the destruction and loss of homes with the earthquake that struck Taiwan 10 years ago, killing more than 2,400 people and leaving as many as 100,000 homeless. The National Fire Agency airdropped food to the 700 people in the two villages, Liang Yu-chu, senior executive officer with the fire agency, said by phone yesterday. As of noon yesterday, about 10,944 people had been evacuated from the disaster zone, with 8,338 in shelters, according to the NFA. Taiwan plans to spend around NT$20 billion ($607 million) to rebuild roads and bridges as the Cabinet considers whether to implement a special budget for typhoon relief, Deputy Transport Minister Yeh Kuang-shih said by phone yesterday. The Taiwanese premier said yesterday the government can redirect more than NT$40 billion from its 2009 budget for reconstruction, CNA reported . Probe Ordered The government ombudsman, the Control Yuan, ordered an investigation into the administration’s preparation for Morakot after advice following Typhoon Kalmaegi last year wasn’t followed. Kalmaegi lashed the island in July 2008, killing at least 18 people and causing millions of dollars of damage to agriculture. The Control Yuan is one of Taiwan’s five branches of government and has the power to impeach, audit and censure government agencies. More than 754,000 customers remained without water yesterday, 28,476 without power and 61,730 have phone lines that remain disconnected, the fire agency said. Morakot brought more than 3,000 millimeters (118 inches) of rain to Taiwan, the most for a 48-hour period in 100 years of record keeping, the Central Weather Bureau said. Flooding was the worst in 50 years, Wu Yueh-hsi, deputy director general of the Water Resources Agency, said this week. Agricultural losses climbed to NT$9 billion, the Council of Agriculture said on its Web site. The government is warning against “price collusion” and said it will provide frozen vegetables and meat to stabilize supplies, the Cabinet said in a statement yesterday. To contact the reporter on the story: Yu-huay Sun in Taipei at ysun7@bloomberg.net ; Tim Culpan in Taipei at tculpan1@bloomberg.net .

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Taiwan Rescuers Search for Scores Still Missing After Typhoon Slams Island

August 12, 2009

By Yu-huay Sun and Tim Culpan Aug. 12 (Bloomberg) — Rescuers in Taiwan found almost 1,000 people alive in villages buried by mudslides after Typhoon Morakot triggered the worst floods in half a century. Helicopters were sent to help some 700 survivors discovered in the southern villages of Shiao Lin and Namahsia in Kaohsiung county, Martin Yu, a National Defense Ministry spokesman, said today in a phone interview. He didn’t say how many people are unaccounted for. About 200 were found alive in Ching Ho village and another 70 in Wu Li Pu, both also in the south, the state- run Central News Agency said. The death toll from Morakot increased to at least 103 people, with 59 of them from Kaohsiung county, including 32 who were buried in mudslides, Agence France-Presse cited the National Fire Agency as saying. The fire agency said earlier today that 61 people have been confirmed missing since the typhoon struck Taiwan Aug. 6 to Aug. 9. President Ma Ying-jeou visited two rescue centers in southern Taiwan today. “There are so many policemen here today because President Ma is coming. Why aren’t they out there searching for people?” Joseph Hong, a 58-year-old pastor, said at the Chishan rescue center. “There are fewer helicopters out there as they are waiting for Ma to arrive. This is the wrong use of resources.” Ma, speaking at the center, said there isn’t any need to issue an emergency order in the aftermath of the typhoon because existing measures are adequate. Resettlement Plan Taiwan Premier Liu Chao-shiuan instructed agencies to come up with a resettlement plan for survivors within two days, comparing the destruction and loss of homes with the earthquake that struck Taiwan 10 years ago, killing more than 2,400 people and leaving as many as 100,000 homeless. The NFA airdropped food to the 700 people in the two villages, Liang Yu-chu, senior executive officer with the fire agency, said by phone today. As of noon, about 10,944 people had been evacuated from the disaster zone, with 8,338 in shelters, according to the NFA. Hu Li-chu, a 30-year-old housewife and her three children, ages 5 to 7, were covered in mud when they were rescued from Namahsia village. “We were praying for a helicopter to come save us,” Hu said. “Even when a helicopter came, we had to queue up to be picked up. The rest of our family is still back in Namahsia.” They slept on the mountainside for three days and drank rain water, she said. Minister Is Jeered More than 200 people waiting at the Chishan center, which was converted from a high school, jeered when Justice Minister Wang Ching-feng arrived early today. “The relief workers don’t really understand the severity of the problem,” said Chen Yu-chen, 45, operator of a hot- spring spa in Baolai village in Kaohsiung county. “They need to send more helicopters and drop food to the people who are affected.” Taiwan plans to spend around NT$20 billion ($608 million) to rebuild roads and bridges as the Cabinet considers whether to implement a special budget for typhoon relief, Deputy Transport Minister Yeh Kuang-shih said by phone today. The government ombudsman, the Control Yuan, ordered an investigation into the administration’s preparation for Morakot after advice following Typhoon Kalmaegi last year wasn’t followed. Kalmaegi lashed the island in July 2008, killing at least 18 people and causing millions of dollars of damage to agriculture. ‘Government’s Failure’ “Typhoon Morakot once again highlights the government’s failure in flood prevention,” the Control Yuan said in a statement on its Web site . “The Control Yuan on Aug. 5 censured 14 government departments including the Cabinet for failing to coordinate a NT$116 billion budget for flood prevention following the Typhoon Kalmaegi disaster last year.” The Control Yuan is one of Taiwan’s five branches of government and has the power to impeach, audit and censure government agencies. More than 754,000 customers remain without water, 28,476 without power and 61,730 have phone lines that remain disconnected, the fire agency said in its report today. As many as 500 people were feared dead in Shiao Lin after mudslides destroyed around 150 houses in the remote village, the agency said yesterday. A rescue helicopter delivering food crashed yesterday, killing the three people aboard, it said. “I have nothing now,” said Lee Ching-ming, 35, an unemployed resident of Namahsia. “Three relatives have passed away. I don’t have a house now. I don’t know what I can do for my future any more. I am very lost and helpless.” He and his parents and two daughters were rescued by helicopters today. Record Rainfall Morakot brought more than 3,000 millimeters (120 inches) of rain to Taiwan, the most for a 48-hour period in 100 years of recordkeeping, the Central Weather Bureau said. Flooding was the worst in 50 years, Wu Yueh-hsi, deputy director general of the Water Resources Agency, said yesterday. Agricultural losses climbed to NT$9 billion, causing the destruction of 57,071 hectares of agriculture land, 54 million chickens and 106,370 pigs as of 3 p.m. today, the Council of Agriculture said in a statement on its Web site. The government is warning against “price collusion” and said it will provide frozen vegetables and meat to stabilize supplies, the Cabinet said in a statement today. To contact the reporter on the story: Yu-huay Sun in Taipei ysun7@bloomberg.net Tim Culpan in Taipei at tculpan1@bloomberg.net .

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Asian Stocks Gain on U.S. Jobs, Japan Machinery Orders; Bridgestone Climbs

August 9, 2009

By Shani Raja Aug. 10 (Bloomberg) — Asian stocks rose after the U.S. jobless rate dropped and Japanese machinery orders increased, boosting confidence that recessions in the world’s two largest economies are easing. Japan’s Toyota Motor Corp. , which gets 31 percent of its revenue from North America, gained 2 percent as the dollar strengthened against the yen after the U.S. jobs report. Bridgestone Corp. , the world’s largest tiremaker, rose 6.5 percent in Tokyo after a profit forecast. Hallenstein Glasson Holdings Ltd. , a New Zealand clothing retailer, jumped 3.9 percent in Wellington after the country’s house prices rose. The MSCI Asia Pacific Index climbed 1 percent to 111.87 as of 9:53 a.m. in Tokyo, following a 1 percent drop last week. The gauge has climbed 58 percent from a more than five-year low on March 9 amid speculation the global economy is recovering from the credit crisis. “The improvement in the U.S. job market will increase demand for risk assets globally, including stocks,” said Tomochika Kitaoka , a senior strategist at Mizuho Securities Co. in Tokyo. “Exporters will get an extra boost in that the yen is sufficiently weak to help raise their profits.” Japan’s Nikkei 225 Stock Average advanced 1.3 percent to 10,545.90. Australia’s S&P/ASX 200 Index rose 1.1 percent. New Zealand’s NZX 50 Index added 0.7 percent. Beating Estimates Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The gauge climbed 1.3 percent on Aug. 7 after a Labor Department report showed the joblessness rate dropped to 9.4 percent last month from June, the first decline since April 2008. Economists had estimated the rate would rise to 9.6 percent. Japanese machinery orders, an indicator of capital investment in the next three to six months, climbed 9.7 percent from May, the Cabinet Office said today in Tokyo. The median estimate of 22 economists surveyed by Bloomberg was for a 2.6 percent increase. Toyota gained 2 percent to 4,170 yen. Sony Corp. , which gets about a quarter of its sales from the U.S., climbed 2 percent to 2,750 yen. Komatsu Ltd. , the world’s second-biggest maker of construction equipment, rose 2.8 percent to 1,631 yen. A weaker yen also boosted the outlook for Japanese export earnings. The Japanese currency depreciated to as much as 97.78 from about 95.43 at the 3 p.m. close of Tokyo stock trading on Aug. 7. Bridgestone jumped 6.5 percent to 1,800 yen after forecasting full-year net income of 6 billion yen ($62 million), compared with an earlier break-even prediction. Hallenstein Glasson gained 3.9 percent to NZ$2.90. New Zealand house prices rose for the third month in July, advancing 0.7 percent from the previous month, according to Quotable Value New Zealand Ltd., the government valuation agency. To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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Japanese Stocks Gain on Machinery Orders, U.S. Jobs; Bridgestone Advances

August 9, 2009

By Masaki Kondo and Satoshi Kawano Aug. 10 (Bloomberg) — Japanese stocks rose after the U.S. jobless rate dropped for the first time in more than a year, orders for Japanese machinery increased and the yen weakened. Mitsubishi Motors Corp. added 1.2 percent. Hitachi Construction Machinery Co. advanced 1.7 percent. Sumitomo Metal Mining Co. gained 1.6 percent after metals prices increased for a fourth straight week. Bridgestone Corp., the world’s largest tiremaker, was set to climb after boosting its full-year outlook. The Nikkei 225 Stock Average rose 114.97, or 1.1 percent, to 10,527.06 as of 9:04 a.m. in Tokyo. The broader Topix index climbed 10.28, or 1.1 percent, to 967.04. “The improvement in the U.S. job market will increase demand for risk assets globally, including stocks,” said Tomochika Kitaoka , a senior strategist at Mizuho Securities Co. in Tokyo. “Exporters will get an extra boost in that the yen is sufficiently weak to help raise their profits.” In New York, the Standard & Poor’s 500 Index climbed 1.3 percent on Aug. 7 after a Labor Department report showed the joblessness rate dropped to 9.4 percent last month from June, the first decline since April 2008. Economists had estimated the rate would rise to 9.6 percent. Japan’s machine orders jumped 9.7 percent in June from May, the Cabinet Office said before markets opened today. Bookings, an indicator of corporate spending in the next three to six months, were estimated to have risen 2.6 percent, according to economists surveyed by Bloomberg. The Nikkei gained 18 percent in 2009 through Aug. 7 as manufacturing in China, Europe and the U.S. improved. Stocks on the gauge traded at 1.34 times corporate net worth last week, climbing back to their level on Sept. 29, according to data from Nikkei Inc., which compiles the gauge. The Japanese currency depreciated to as much as 97.78 from about 95.43 at the 3 p.m. close of Tokyo stock trading on Aug. 7. A weaker yen boosts the value of overseas trading at Japanese companies when converted into the local currency. A gauge of six metals in London added 1.7 percent, bringing its five-day advance to 7.2 percent and capping its fourth weekly gain. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo at skawano1@bloomberg.net .

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Japan Machine Orders Rise for First Time in Four Months as Recession Eases

August 9, 2009

By Jason Clenfield and Tatsuo Ito Aug. 10 (Bloomberg) — Japanese machinery orders rose in June, ending a three-month streak of declines that came as companies cut costs to protect earnings. Bookings , an indicator of capital investment in the next three to six months, rose 9.7 percent from May, the Cabinet Office said today in Tokyo. The median estimate of 22 economists surveyed by Bloomberg was for a 2.6 percent increase. Signs Japan’s deepest postwar recession is moderating haven’t convinced manufacturers there will be a sustained revival in global demand. Companies including Toyota Motor Corp. are cutting capital spending, a driver of growth in past recoveries that made up 15 percent of gross domestic product last year. “The worst is definitely over in terms of earnings, but the incentive to invest is very limited in a world in which production levels are so low,” said Junko Nishioka , chief economist at RBS Securities Japan Ltd. in Tokyo. A survey published last week by the Development Bank of Japan showed Japanese companies will cut capital spending 9.2 percent this fiscal year. Reductions by manufacturers will be the steepest since 1993. Still, more than $2 trillion in spending by governments worldwide has stabilized global demand, supporting manufacturers such as Kubota Corp. , which is selling more farming equipment in China. Japan’s factory production rose 8.3 percent last quarter, rebounding from a record 22.1 percent plunge in the previous period. Better Profits Profit estimates for Japanese companies have been better than expected, helping lift the Nikkei 225 Stock Average 6.6 percent in the last month. Some 15 percent of firms listed on the first section of the Tokyo Stock Exchange have raised first-half earnings estimates since June, according to Tokyo- based Shinko Research, while 10 percent have lowered projections. “Earnings will probably keep improving gradually, but cash flows are very low,” said RBS’s Nishioka. “When companies are making the decision about whether to invest, what’s important isn’t how much sales or production are increasing, it’s the level that matters.” Toyota last week narrowed its loss forecast for the current business year, citing government incentives introduced in Japan, the U.S. and Europe to encourage car-buying. Even with an improved outlook, the company estimates it will sell 3 million fewer cars than it has the capacity to build. The automaker plans to cut capital spending 36 percent this year. Declining business spending is one of the reasons Japan’s recovery is forecast to lose momentum later this year. The world’s second-largest economy probably grew last quarter for the first time in a year, expanding at an annualized 3.8 percent pace after a record 14.2 percent contraction in the first quarter, according to the median estimate of 20 analysts. To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito@bloomberg.net .

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Obama Cabinet Members Outline $242 Million in Budget Cuts Over Two Years

July 27, 2009

By Roger Runningen July 27 (Bloomberg) –President Barack Obama’s Cabinet officers responded to his challenge to cut their budgets with $242 million in trims over two years, the Office of Management and Budget said today. Obama in April ordered his Cabinet members to find at least $100 million in cuts, a fraction of the $3.9 trillion the federal government is likely to spend this year, to demonstrate his commitment to reducing the deficit. To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

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