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Japanese stocks decline

by on August 25, 2011

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(MENAFN – Saudi Press Agency) Stocks in Tokyo fell in Wednesday morning trading on weak US economic data and a downgrade in Japan’s sovereign credit rating by Moody’s Investors Service. The …

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Japanese stocks decline

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Japan- Nikkei Closes 1.22% Higher

by on August 24, 2011

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(MENAFN – Qatar News Agency) Tokyo stocks closed sharply higher Tuesday with the key Nikkei stock index surging 1.22 percent. The benchmark Nikkei 225 Average gained 104.88 points from Monday to …

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Japan- Nikkei Closes 1.22% Higher

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Paul Sylvester: Big Infrastructure Projects Have High Risks but High Rewards

July 7, 2011

Commentators in the United States often lament the country’s seeming loss of will to take on the kinds of big infrastructure projects that made the nation great in the first place; founding the Tennessee Valley Authority in the 1930s to provide electricity and economic development to Tennessee and six neighboring states; providing long distance road travel throughout the lower 48 states by constructing the Interstate Highway System beginning in 1950s; and, of course, landing men on the Moon in the Apollo program of the 1960s, which spurred scientific and technological innovations that continue to today, just to name a few. China meanwhile seems to be getting on with the business of building a 21st century country. A new, $5 billion US, 2,525 kilometer (1,575 mile) railway between Beijing and Hong Kong was completed in 1997, and there are plans to spend $100 billion US to lay down tracks for a 12,000 kilometer (7,500 mile) high-speed railroad, running trains at speeds up to 300 kilometers (185 miles) per hour. The Three Gorges Dam is the world’s largest and costliest ( estimated at $30 billion US or more) hydro power project ever undertaken, with a capacity to produce of 18,000 megawatts of electricity. The reality of a non-democratic country boldly building big things intended to service a large modern state challenges the paradigm taught for decades that only democracies can produce such successes. It is with this background that news reached us on Canada Day (July 1) that the Innu Nation of Labrador ratified the New Dawn Agreement , marking another step toward the start of the Lower Churchill Project, a hydroelectric development that will transmit electrical power from Labrador, across the Strait of Belle Isle, down to the island of Newfoundland, and then across the Cabot Strait into Nova Scotia, with the possibility of exporting excess power to the rest of the Maritimes and New England. It is an audacious plan undertaken by two Canadian provinces, Newfoundland and Labrador and Nova Scotia, with a combined population of only about 1.5 million people. It should remind us that the ability to tackle big infrastructure projects is still alive in North America, and inspire us to embrace similar projects elsewhere. The project in Atlantic Canada is estimated to cost between $6-$9 billion CAD (the Canadian and US dollars are approximately at parity at present) for construction of a 824-megawatt generating facility at Muskrat Falls on the lower Churchill River in Labrador; a 1,100-kilometer (680 mile) transmission link to the island of Newfoundland, including 30 kilometers (19 miles) of submarine cable; a maritime link to Nova Scotia including 180 kilometers (112 miles) of submarine cable; and other transmission infrastructure. The New Dawn Agreement includes provisions for native peoples in Labrador to receive a royalty of five per cent of net project revenue and payments of $2 million CAD per year until the project first begins generating commercial power, expected to be in 2017. Forty per cent of the electricity output will be sold to customers in Newfoundland, replacing the current oil-burning facility that generates electricity on the island; 20 per cent will provided to Nova Scotia customers, representing almost 10 per cent of the province’s domestic needs; and the remaining 40 per cent will be available for sales to other parts of the Maritimes or in the United States. There is an option to expand the development significantly later, by building a 2,250-megawatt hydroelectric plant at Gull Island, further upstream on the lower Churchill River. The project is not without its challenges or critics. Taxpayers in Newfoundland and Labrador will be burdened with the capital costs of the development and electricity prices for customers will inevitably increase. Even Nalcor Energy , the provincial crown corporation power utility responsible for the project in Newfoundland and Labrador estimates that customers in the province will pay about 15 cents per kilowatt hour for electricity in 2017 compared to about 10 per cent today. Some have argued that the total project costs are likely to be closer to $15 billion CAD so the costs to taxpayers may be much more than those predicted now. The project is already behind schedule and it is unclear if power will really begin flowing by 2017. Some have doubted that markers for electricity generated by the project will exist in New England and other eastern U.S. states in the coming decades if local sources of energy continue to be available, particularly natural gas hosted by shale rocks, which seems much more abundant than was thought even just a few years ago. While many of these concerns may be true, what many miss is that big infrastructure projects are, by their very nature, high risk, high reward enterprises. One does not go into them lightly but, at the same time, one should not let their uncertainties provide cover for a lack of courage to take them on. Intangibles play a role in predicting the future. In this case, hydroelectric power generation has a small carbon footprint compared to many other energy sources, and it is very possible that in the years to come, this source of energy will become highly valued in a world struggling mightily to reduce greenhouse warming. This is not to say that damming rivers and flooding lands does not have adverse environmental impacts and perhaps other technologies such as wind and solar power seen as even more “environmentally-friendly” will be more appropriate for some regions than hydroelectric plants. Which leads to the final point — debating when and where to tackle big infrastructure projects, and which ones, is still an advantage held by democracies.

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Japan’s Prices Rise For First Time In Two Years

May 27, 2011

TOKYO — Japan’s consumer prices in April rose for the first time in more than two years on a spike in energy and tobacco prices, the government said Friday. Japan’s core consumer price index, which excludes fresh food, climbed 0.6 percent last month from a year earlier, marking the first year-on-year increase since December 2008, the Ministry of Internal Affairs and Communications said. The rise in Japanese consumer prices was mainly due to a jump in gasoline and tobacco prices. The ministry said education costs were also higher in April. On a month-on-month basis, Japan’s core consumer price index was up 0.4 percent last month. But economist Hiroshi Watanabe at the Daiwa Institute of Research said the April increase in consumer prices does not mean Japan’s economy has emerged from deflation. “The April results were mainly lifted by temporary factors, such as a surge in tobacco prices. Overall, Japan’s economy still remains under deflationary pressure as the economy has yet to post a steady recovery,” he said. The world’s No. 3 economy has been battling periods of deflation – or a steady decline in prices – since the 1990s. Deflation is a burden as it can hamper economic growth by depressing company profits, sparking wage cuts and causing consumers to postpone purchases. It also can increase debt burdens. Faced with tumbling output and exports following the March 11 earthquake and tsunami, Japan’s economy recently slipped into a recession after contracting at an annualized rate of 3.7 percent in the January-March quarter.

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Video: Korn Says IMF Should Consider `All Comers’ for Top Spot

May 27, 2011

May 27 (Bloomberg) — Thai Finance Minister Korn Chatikavanij spoke with Bloomberg’s Mike Firn in Tokyo on May 25 about the selection process for the next head of the International Monetary Fund and Thailand’s economy and politics. (Source: Bloomberg)

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Toyota Announces Social Network For Drivers

May 23, 2011

TOKYO — Toyota is setting up a social networking service with the help of a U.S. Internet company and Microsoft so drivers can interact with their cars in ways similar to Twitter and Facebook. Japanese automaker Toyota Motor Corp. and Salesforce.com, based in San Francisco, announced their alliance Monday to launch “Toyota Friend,” a private social network for Toyota owners that works similar to tweets on Twitter. In a demonstration at a Tokyo showroom, an owner of a plug-in Prius hybrid found out through a cell phone message from his Prius called “Pre-boy” that he should remember to recharge his car overnight. When the owner plugged in his car to recharge it, the car replied, “The charge will be completed by 2:15 a.m. Is that OK? See you tomorrow.” The exchanges can be kept private, or be shared with other “Toyota Friend” users, as well as made public on Facebook, Twitter and other services, the company said. The companies did not give details of how the technology, such as the content of the talking car’s dialogues, will be managed. But officials said the answers will be automated through sensors in the car. If your car is up for an inspection, for example, the owner will be notified through “Toyota Friend,” which will in turn automatically link to a dealer to set up an appointment. Toyota is investing 442 million yen ($5.5 million), Microsoft Corp. is investing 335 million yen ($4.1 million) and Salesforce.com 223 million yen ($2.8 million) in the project. Many cars are already equipped with navigation and other network-linking capabilities, and can function as a mobile device just like an iPhone or a Blackberry. Toyota’s service, built on open-source cloud platforms that are the specialty of Salesforce.com, as well as on Microsoft’s platform, will start in Japan in 2012, and will be offered later worldwide, initially with electric vehicles and plug-in hybrids, according to Toyota. Such next-generation cars need to be recharged and so drivers may need real-time information, such as the battery level of their cars and locations of charging stations, more than regular gas-engine cars. Toyota President Akio Toyoda, a racing fan, said he always “talks” with his car when he is zipping around on the circuit. With the popularity of social networking, cars and their makers should become part of that online interaction, he said. “I hope cars can become friends with their users, and customers will see Toyota as a friend,” he said. Salesforce.com chief executive Marc Benioff said social networks can add value to products and companies. It can also help Toyota gain massive information not only about their buyers but about how the car is working or not working, he said. “I want a relationship with my car in the same way we have a relationship with our friends on social networks,” he said. Toyoda, who has always been interested in telematics, or the use of Internet technology in autos, has been aggressive in forging alliances with new kinds of companies, including one with U.S. luxury electric carmaker Tesla Motors that he announced last year. Partnerships with dot.com types have been a bright spot in Toyoda’s bumpy career as president. He has faced growing doubts about reliability and transparency because of the massive global recalls that began two years ago, shortly after he took office, and which now affect more than 14 million vehicles. Toyota is also battling parts shortages after the March 11 earthquake and tsunami in Japan destroyed key suppliers, hampering production.

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Sony Paid Big Money To Mitigate PlayStation Network Hack

May 23, 2011

TOKYO — Sony Corp. is expecting an annual loss of $3.2 billion, reversing its earlier projection of a return to profit, as the electronics giant struggles with production disruptions from Japan’s tsunami and a hacker attack on its online gaming service. The Japanese maker of PlayStation 3 video game machines and Bravia flat-panel TVs said Monday that the projection of a 260 billion yen ($3.2 billion) net loss for the fiscal year ended March 2011 was largely due to writing off 360 billion yen ($4.4 billion) related to a tax credit booked in a previous quarter. Sony announced the loss ahead of its official earnings announcement Thursday under Tokyo Stock Exchange guidelines. The company had earlier projected a 70 billion yen ($860 million) profit. Like many other Japanese manufacturers, Sony has been hampered by the production disruptions set off by the March 11 earthquake and tsunami that killed more than 25,000 people, destroyed many factories and sent the nation’s economic recovery into reverse. The company kept its operating profit forecast unchanged at 200 billion yen ($2.46 billion). It expects to report sales of 7.18 trillion yen ($88.2 billion), slightly down from an earlier projection of 7.2 trillion yen ($88.5 billion). Masaru Kato, Sony’s chief financial officer, said parts shortages in the aftermath of the disaster have eased but a full recovery hasn’t yet been realized. “In the first quarter, we saw quite a major impact on our manufacturing activities,” he said. After the quake, “negative factors have grown bigger” and offset earlier improvement in the previously loss-making games division, dashing hopes for a profit. Tokyo-based Sony also faced a new challenge to its reputation following a massive security breach affecting more than 100 million online accounts. After temporarily closing down its online gaming services last month, Sony began restoring its PalyStation Network services in the U.S. and Europe on May 15 mainly for online gaming, chat and music streaming services. Sony spent 14 billion yen ($170 million) to cover costs that included identity theft insurance for customers, improvements to network security, free access to content, customer support and an investigation into the hacking. Sony has seen plunging sales of flat-panel TVs and other gadgets, and was likely to remain in the red in its TV business for the seventh year straight. Sony has also taken a beating in music players and other portable devices to Apple’s iPod, iPhone and iPad. The company booked a 40.8 billion yen ($439 million) loss for the fiscal year ended March 2010 after a 98.9 billion yen loss the year before_ Sony’s first annual red ink in 14 years. ___ Associated Press writer Tomoko A. Hosaka contributed to this report.

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Sony To Post Huge Loss For The Year

May 23, 2011

TOKYO (By Isabel Reynolds) – Sony Corp said it expected to post a $3.2 billion net loss for the year that ended on March 31 due to a write off on tax credits, the latest in a string of grim headlines for the consumer electronics giant. The maker of PlayStation video games, Vaio computers and Bravia TVs has been battling to recover from the devastating Japan earthquake in March, and more recently, a series of computing hacking attacks that affected more than 100 million user accounts. “I have been skeptical about Sony for a long time. Sony has been overtaken by Apple and other companies,” said Yuuki Sakurai, CEO and president of Fukoku Capital Management in Tokyo. “The management is not able to show shareholders the future of the company.” Sony, once a symbol of Japan’s electronic and manufacturing excellence, has found itself outmaneuvered by Apple in portable music and Samsung Electronics in flat-screen TVs and is facing a tough fight in video games with Nintendo and Microsoft. Sony said it now expected a net loss of 260 billion yen ($3.2 billion) versus a previous forecast for a profit of 70 billion yen due to a “non-cash charge” of around 360 billion yen related to Japanese tax credits. It is due to announce its full-year earnings on Thursday. The net loss would be Sony’s biggest since 1995 and its second-largest ever. The company stuck with its earlier forecast, issued before the March 11 earthquake, for an annual operating profit of 200 billion yen, which is broadly in line with consensus forecasts. CLEAN SLATE Sony said it expected sales to rise this year and forecast a net profit. Some investors saw the revisions as a way for Sony to put the slew of bad news behind it and start with something of a clean slate. “Sony sharply revised down its net forecast to a big loss to show that the impact of the earthquake has been largely factored-in during the previous financial year, while the impact would be limited for the current year,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “Probably the company is expecting the global economy to recover during the second half of the year. Maybe this perception could be a bit optimistic, but we still have to wait and see.” In its first estimate for the year to March 2012, Sony said its operating profit would also be around 200 billion yen. The devastating earthquake and tsunami in March damaged Sony plants in northeastern Japan, snarled the global supply chain in several industries and triggered a plunge in domestic consumption. Sony estimated the impact of the quake in the current year at 150 billion yen at the operating level. Many rival corporations, including Panasonic Corp, have yet to issue forecasts for the current financial year to March 2012, due to uncertainty following the disaster. Sony last month disclosed that it had been a victim of one of the biggest cyber-attacks in history. It shut down its PlayStation Network across the globe in mid-April and has slowly started to restore access, starting in the United States. The company is still working with Japanese government authorities to restore access in that country. Sony said “known costs” were estimated at 14 billion yen. Sony is targeting the end of May for fully restoring the affected networks. Shares in Sony ended down 0.5 percent in a Tokyo market down 1.5 percent. It shares though have fallen 24 percent so far this year, compared with a 7 percent fall in the Nikkei average. ($1=81.71 yen) (Additional reporting by Tim Kelly and Chikafumi Hodo; Writing by Lincoln Feast; Editing by) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: Credit Suisse’s Shirakawa Says Japan Economy Still Weak

May 23, 2011

May 23 (Bloomberg) — Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo and a former Bank of Japan official, talks about the impact of the March 11 earthquake on the country’s economy. Shirakawa speaks with Susan Li on Bloomberg Television’s “First Up.” (Source: Bloomberg)

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Nintendo May Seek Outside Help

April 26, 2011

(TOKYO) – Nintendo said on Tuesday that alliances with other companies may be necessary, a day after the game maker reported its second straight fall in annual profit and said it would launch a successor to its aging Wii console. “I now regret that we didn’t tie up with someone outside the company to market the Wii. If we had done that, the fate of the Wii might have been different,” Chief Executive Satoru Iwata said at a conference for investors and analysts. “Now I am aware that we should not rely too much on ourselves. You will see what I mean by this when we market the 3DS and the Wii in the future.” (Reporting by Junko Fujita; Editing by Michael Watson) Copyright 2011 Thomson Reuters. Click for Restrictions

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OECD: Tax Hike In Japan Will Help Economy During Recovery

April 21, 2011

TOKYO — Japan should as much as quadruple its sales tax rate to deal with a crushing deficit that’s bound to grow as it spends on reconstruction from last month’s earthquake and tsunami, the OECD said Thursday. Economists for the association of wealthy, industrialized nations said in a report that Japan’s public debt of more than twice its gross domestic product leaves it little choice but to gradually raise its sales tax, now 5 percent, to as high as 20 percent. “Japan has not so much room to cut spending because it has a small government,” Randall Jones, the OECD’s head economist for Japan and Korea, said at a press conference. “Most of the consolidation will have to be from the revenue side.” Tax increase proposals have proven vastly unpopular in the past. Prime Minister Naoto Kan’s suggestion that sales taxes be raised to as high as 10 percent just before July’s parliamentary elections contributed to the ruling Democratic Party’s loss of control of Japan’s upper house. The Organization for Economic Cooperation and Development suggested in the report that “the Japanese people’s sense of solidarity” following the March 11 disaster may make an increase more palatable. The extensive damage from the March 11 disasters across seven prefectures (states) resulted in direct losses of between 16 trillion yen ($198 billion) and 25 trillion yen ($309 billion), according to Japan’s Cabinet Office, making it the world’s most expensive natural disaster on record. OECD Secretary-General Angel Gurria said the disaster, while unquestionably a tragedy, may have the upside of forcing Japan to confront its fiscal problems earlier than they otherwise would have. “Right now, there is the opportunity to plant the seeds of a better tomorrow,” he said. “Perhaps this can precipitate some decisions that were longstanding, that probably should have been taken before.” Gurria said the disasters will have a limited economic impact, as its negative short-term impact on output is followed by a rebound once reconstruction spending kicks in. In addition to the tax hike, the OECD recommended changes to Japan’s education system aimed at helping students from poor families and suggested measures to boost the status of so-called non-regular workers, who receive lower pay and enjoy less job security. The economists said the country should also increase women’s participation in the work force as a partial remedy to the deceasing number of working age taxpayers who must support the growing population of elderly retirees. Another suggestion was for Japan to access additional markets by increasing its participation in regional free trade agreements. The suggested corporate tax decrease, meanwhile, would make it cheaper and easier for Japanese companies to increase employment, the economists said. Gurria said the economic growth that these reforms would create is vital to Japan’s ability to finance disaster-area reconstruction while cutting debt. “Economic growth is going to critical to be able to have success in this very careful balance that needs to be struck,” he said.

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Ian Fletcher: Why Donald Trump Is Right on Trade

April 20, 2011

The usual suspects are racing to debunk Donald Trump’s foray into the most serious protectionism — a 25% tariff on China — proposed by a major presidential candidate since Patrick Buchanan ran in 1992. They know this is serious stuff. Our long-delayed national trade debate has begun in earnest. I have expressed reservations about getting obsessed with just China before. But broadly speaking, Trump is right on the money here. Nothing less than an actual tariff or the equivalent is ever going to get Beijing to stop gaming the international trading system to America’s disadvantage. This matters, big-time. Because until we sort out America’s trade mess — which must start by zeroing out, or close to it, our $600 billion-a-year trade deficit — our economy will never truly be healthy again. Jobs are the aspect of this everyone understands. But what a lot of people miss is that the current budget fight, and the angst over our mounting national debt, are also intimately connected to trade. So Trump is onto something even bigger than people realize. The budget fight ultimately comes down to the fact that we don’t have an economy large enough to generate tax revenue commensurate with the spending we have voted for. But why isn’t our economy big enough? Start with the fact that, as economist William Bahr has estimated, America’s accumulated trade deficits since 1991 alone have caused our economy to be 13 percent smaller than it otherwise would be. The trade deficit costs us about one percent in GDP growth every year, and that compounds over time. As for our national debt, or, more properly, our bloating public and private indebtedness? As I explained at length in another article , borrowing money (and selling off existing wealth, which has the same net effect) is a mathematically inevitable result of running trade deficits. The only way this can not happen is if a) the aforementioned $600 billion isn’t real money, or b) America is trading with Santa’s elves. So, Mr. Trump… How do we rebalance America’s trade, starting with China? Forget about doing it by playing nice. China will only give up one-way free trade (free for America, protectionist for them) when they are coerced into doing so. They are making far too much money to ever give up this sweet racket voluntarily. We are constantly warned that imposing a tariff on China would trigger a trade war. But the curious thing about the concept of trade war is that, unlike actual shooting war, it has no actual historical precedent . In fact, the reality is that there has never been a significant trade war. Anyone who knows otherwise, please name one. The usual example free traders give is America’s Smoot-Hawley tariff of 1930, which supposedly either caused the Great Depression or caused it to spread around the world. But this canard does not survive serious examination, and has actually been denied by almost every economist who has actually researched the question in depth — including many free traders and ranging from Paul Krugman on the left to Milton Friedman on the right. (I debunked this myth at length in this article.) There is, in fact, a basic unresolved paradox at the bottom of the very concept of trade war. If, as free traders insist, free trade is beneficial whether or not one’s trading partners reciprocate, then why would any rational nation start one, no matter how provoked? Wouldn’t they just keep lapping up the benefits of one-way free trade, if it’s so good for them? Furthermore, if the moneymen in Beijing, Tokyo, Berlin, and the other nations currently running trade surpluses against the U.S. start to ponder exaggerated retaliation against the U.S., they will soon discover the advantage is with us, not them. Because they are the ones with the trade surpluses to lose, not us. What exactly does the U.S. have to lose in a trade war? The only way a deficit nation can “lose” a trade war is by having its trade balance get even worse. Given that the U.S. trade balance is already outlandish, it is hard to see how this could happen. Supposedly, China could suddenly stop buying our Treasury Debt. Indeed they could, but this would immediately reduce the value of the $1.15 trillion or so they already hold. Furthermore, this would depress the value of the dollar — exactly the opposite of their currency manipulation strategy. Then there is the awkward problem of what China would do with all the money it would get by selling off its dollars. There just aren’t that many good alternatives for parking that much money. Japan doesn’t want its currency used as an international reserve currency, and the Euro has huge problems. Assets like gold and minor currencies are volatile or in limited supply. Others, like real estate or corporate stocks, are still denominated in those pesky dollars and euros. We are still a nuclear power, so at the end of the day, China cannot force us to do anything that we don’t want to. We could — a grossly irresponsible but not impossible hypothetical — repudiate our debt to them (or stop paying the interest) as the ultimate counter-move. More plausibly, we might simply restore the tax on the interest on foreign-held bonds that was repealed in 1984 thanks to Treasury Secretary Donald Regan. We have lots of little cards like that up our sleeve. So an understanding will, most likely, be reached. A deal (one of Mr. Trump’s favorite words!) will be struck. I think Mr. Trump understands this better than anyone else. That’s one of the things I like about him. The reality is that the United States is already in a trade war with China. Kowtowing to China today is economic appeasement, with the same result as political appeasement in the 1930s: a few more years of relative quiet with a bigger explosion at the end. At some point, America’s ability to run gigantic deficits must end, due to a prolonged slide or sudden crash in the value of the dollar. The longer we wait, the greater the likelihood that it will come as a sudden and destabilizing shock, rather than a managed, more gradual adjustment. This issue is bigger than China alone. How America deals with China will set the precedent, and establish or destroy America’s credibility, for dealing with a long list of other nations. Believe me, they’re watching Trump now in Tokyo, Berlin, and Brussels.

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Japan Cabinet Ministers Express Confidence In U.S. Debt After S&P Lowers Outlook

April 19, 2011

April 19, 2011 1:27:39 AM By Kaori Kaneko and Tetsushi Kajimoto TOKYO (Reuters) – Japanese cabinet ministers on Tuesday moved to shore up confidence in U.S. debt after Standard & Poor’s threatened to lower its credit rating on the world’s largest economy due to a bulging budget deficit, touching a nerve with one of the largest holders of Treasuries. S&P, which assigns ratings to guide investors on the risks involved in buying debt instruments, slapped a negative outlook on the United States’ top-notch AAA credit rating on Monday and said there was at least a one-in-three chance that it could eventually cut it. Japan is the second-largest holder of Treasuries after China and its confidence in dollar-denominated assets has been steadfast until now, but the prospect of a ratings downgrade could test Japan’s faith in Treasuries. The increasing chance of a downgrade for the United States could also draw unwanted attention to Japan’s large debt burden, which is likely to grow larger as the government secures funding to rebuild after last month’s devastating earthquake and tsunami. “The United States is tackling fiscal issues in various ways, so I still think U.S. Treasuries are basically an attractive product for us,” Finance Minister Yoshihiko Noda told reporters after a cabinet meeting. If investors start demanding higher returns for holding riskier U.S. debt, the rise in bond yields could erode the value of Treasuries held in currency reserves and push borrowing costs up in other countries. Japan’s reserves rose to $1.12 trillion at the end of March from $1.09 trillion at the end of February after Japan and other Group of Seven countries intervened to stem a rise in the yen. The bulk of Japan’s reserves are believed to be held in Treasuries. “Even if a private company downgraded, U.S. treasury bills are in demand from the world,” Economics Minister Kaoru Yosano said. Japan’s public finances are also in a dangerous state, and the timing of S&P’s warning could be a source of discomfort. Japan is set to compile an extra budget worth about 4 trillion yen ($48.4 billion) to start reconstruction after the March 11 earthquake and tsunami, which also triggered the world’s worst nuclear crisis in a quarter century. This is likely to be the first of several spending packages. Japan’s public debt is already twice the size of its $5 trillion economy, and policymakers have said new bond issuance would be needed after the first extra budget to pay for reconstruction costs. S&P cut Japan’s sovereign rating to AA-minus in January, although it said shortly after the March disaster that it did not expect to change its ratings stance on Japan. ($1 = 82.675 Japanese Yen) (Editing by Edmund Klamann) Copyright 2011 Thomson Reuters. Click for Restrictions .

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U.S. Regulators Privately Doubted Nuke Plants Despite Expressing Public Confidence

April 6, 2011

BOSTON (By Scott Malone) – U.S. regulators privately have expressed doubts that some of the nation’s nuclear power plants are prepared for a Fukushima-scale disaster, undercutting their public confidence since Japan’s nuclear crisis began, documents released by an independent safety watchdog group show. Internal Nuclear Regulatory Commission e-mails and memos obtained by the Union of Concerned Scientists questioned the adequacy of the back-up plans to keep reactor cooling systems running if off-site power were lost for an extended period. Those concerns seem to contrast with the confidence U.S. regulators and industry officials have publicly expressed after the world’s worst nuclear accident since Chernobyl began to unfold on March 11, UCS officials said on Wednesday. “While the NRC and the nuclear industry have been reassuring Americans that there is nothing to worry about — that we can do a better job dealing with a nuclear disaster like the one that just happened in Japan — it turns out that privately NRC senior analysts are not so sure,” said Edwin Lyman, a UCS nuclear expert. The e-mails in question are part of an NRC review of how the operators of nuclear plants in Delta, Pennsylvania, and Surry County, Virginia, would cope with a prolonged power outage that knocked cooling systems offline, as occurred at the Tokyo Electric Power Co-operated Fukushima plant. In a July 28, 2010, e-mail, one NRC staffer said that contingency plans for Exelon Corp’s Peach Bottom nuclear plant in Delta “have really not been reviewed to ensure that they will work to mitigate severe accidents.” Another document, undated, said backup plans included just having equipment on the plant grounds that could be useful “when used by knowledgeable operators if post-event conditions allow.” The document went on to note: “If little is known about these post-event conditions, then assuming success is speculative.” A nuclear industry lobbying group criticized the UCS’ disclosures. “UCS conveniently missed the point of a Nuclear Regulatory Commission study,” said Steve Kerekes, a spokesman for the Nuclear Energy Institute. He noted that the NRC’s review concluded that the risk of plants releasing radiation after an accident was lower than the agency had previously assumed. The Peach Bottom site uses a General Electric Co reactor with a similar design to four of the reactors at Fukushima. Officials at the NRC and Exelon did not immediately respond to calls seeking a comment. The UCS said it obtained the e-mails through a Freedom of Information Act request. The Surry County nuclear power station is operated by Dominion Resources Inc. (Reporting by Scott Malone, editing by Dave Zimmerman and Gerald E. McCormick) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Japan plans to bail out nuke plant operator Tokyo Electric

April 2, 2011

Japan plans to bail out nuke plant operator Tokyo Electric

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Japan plans to bail out nuke plant operator Tokyo Electric

April 2, 2011

Japan plans to bail out nuke plant operator Tokyo Electric

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Japan plans to bail out nuke plant operator Tokyo Electric

April 2, 2011

Japan plans to bail out nuke plant operator Tokyo Electric

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Japan plans to bail out nuke plant operator Tokyo Electric

April 2, 2011

Japan plans to bail out nuke plant operator Tokyo Electric

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Japan plans to bail out nuke plant operator Tokyo Electric

April 2, 2011

Japan plans to bail out nuke plant operator Tokyo Electric

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Video: Ito Says Japan Has 80% Recession Chance on Power Outages

April 1, 2011

April 1 (Bloomberg) — Takatoshi Ito, a University of Tokyo professor and former adviser to the Japanese government, talks about the outlook for the economy amid reconstruction following last month’s earthquake and power outages.¶ He speaks with Bloomberg’s Ryan Chilcote in Cernobbio, Italy.

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Japan Government To Reportedly Take Partial Control Of Nuclear Plant Owner

April 1, 2011

March 31, 2011 10:40:09 PM TOKYO (Reuters) – TOKYO, April 1 (Reuters) – Japan’s government plans to take control of Tokyo Electric Power Co , the operator of a stricken nuclear power plant, by injecting public funds, the Mainichi newspaper said on Friday. But the government is unlikely to take more than a 50 percent stake in the company, an unnamed government official was quoted by the daily as saying. “If the stake goes over 50 percent, it will be nationalized. But that’s not what we are considering,” the official was quoted by the paper as saying. The company, also known as TEPCO, has come under fire for its handling of the emergency at its Fukushima Daichi nuclear complex, triggered by a March 11 earthquake and tsunami that left more than 27,500 people dead or missing. Mainichi quoted an unnamed government official as saying: “It will be a type of injection that will allow the government to have a certain level of (management) involvement.” A series of missteps and mistakes, combined with scant signs of leadership, have further undermined confidence in the company. Poor communication has led to some heated exchanges in media conferences as journalists demanded information. TEPCO could face compensation claims topping $130 billion if Japan’s worst nuclear crisis dragged on, Bank of America-Merrill Lynch estimated this week, further fuelling expectations Japan’s government will step in to save Asia’s largest utility. Investor concern about the future of Tokyo Electric mounted after its president, Masataka Shimizu, was admitted to hospital and the company said on Wednesday that 2 trillion yen ($24 billion) in emergency loans from Japan’s major banks would not cover its mounting costs. Liabilities for compensation claims alone could be up to 11 trillion yen ($133 billion) — nearly four times TEPCO’s equity — if the nuclear crisis drags on for two years, an analyst at Bank of America Merrill Lynch wrote in a report. TEPCO shares are down almost 80 percent since the disaster. Bank of America-Merrill Lynch said shareholders were very likely to take a big hit and a rapid resolution of the crisis was the only way to keep costs down. If the situation can be turned around within the next two months, compensation costs may be less than 1 trillion yen. Costs will rise to 3 trillion yen if it drags on for six months, analyst Yusuke Ueda wrote. Experts, however, say a final resolution of the nuclear disaster is likely to take decades and there could be many further setbacks. TEPCO could burn through 2 trillion yen in about a year, said CLSA equity analyst Penn Bowers, as it pays extra for fuel to run its thermal plants, among other costs. TEPCO has around $91 billion in debt including some $64 billion in bonds. That excludes about $24 billion recently secured in loans from domestic lenders. At the end of December, TEPCO had equity of about $35 billion, its accounts show. (Reporting by Yoko Nishikawa, Kazunori Takada and Taiga Uranaka; Writing by Dean Yates; Editing by Alex Richardson) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Video: Tepco Reactors May Take 30 Years, $12 Billion to Scrap

March 30, 2011

March 30 (Bloomberg) — Damaged reactors at the crippled Fukushima Dai-Ichi nuclear plant in Japan may take three decades to decommission and cost operator Tokyo Electric Power Co. more than 1 trillion yen ($12 billion), engineers and analysts said. Bloomberg’s Sara Eisen reports. (Source: Bloomberg)

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Fears Of Weakening Economy, Global Unrest Threaten U.S. Recovery

March 25, 2011

NEW YORK — Just a couple of months ago, it seemed the slow economic recovery was starting to gather momentum. But that was before a series of violent protests in the Middle East pushed energy prices to their highest level since 2008. A devastating earthquake struck Japan, threatening global supply chains and raising fresh fears about nuclear radiation. Last weekend, international conflict began in Libya, as a U.S.-led coalition pummeled the country with missiles. Americans appear to be growing nervous, and that unease could take an economic toll. Consumer sentiment fell in March to its lowest level since November 2009, according to the Reuters/University of Michigan index, released Friday. With oil prices rising, Americans’ confidence in the economic recovery has taken a sudden plunge. Amid new anxieties, people are becoming less inclined to spend money. And consumer spending makes up two-thirds of U.S. economic activity. So as Americans worry about unrest abroad and a still-weak domestic economy, the recovery faces another strain. “There’s a negative psychological blow when the economy starts to deteriorate,” said Bernard Baumohl, chief global economist for the Economic Outlook Group. “We can see consumers begin to worry enough to cut back on spending and preserve their savings.” In a sobering new report, Baumohl argues that a combination of recent economic strains has caused crucial engines of economic growth to cool. Consumers are cutting back. Businesses are likely delaying new investments. Growth in U.S. economic output this year, originally predicted to be 3.5 percent, is now expected to be 2.8 percent, the report says. The reversal in consumer sentiment has been dramatic. Late last year, holiday sales were stronger than expected. In February, a month when the unemployment rate finally dipped below 9 percent, consumer confidence reached a three-year high. But that confidence appears to be eroding. Gas prices are still rising. The value of Brent crude, an industry benchmark, has risen more than 20 percent since the beginning of the year, reaching nearly $116 a barrel on Thursday. Each $10 rise in the price of a barrel of oil translates into a 25-cent increase in gas prices, which tears more than $25 billion from the U.S. economy yearly, economists say. If energy prices continue a sustained rise, that would constitute the “primary threat” to the U.S. economic recovery, said Gus Faucher, director of macroeconomics at Moody’s Analytics. High pump prices strain consumers’ wallets, and can force businesses to pass high transportation costs on to customers. But expensive fuel also has another effect: It makes people nervous. Combined, the financial and psychological strains appear to be encouraging Americans to cut back. Already, one in three consumers has cut spending due to rising gas prices, according to the RBC Consumer Outlook Index, released in early March. “These are not quiet economic times. We see a lot of shakeups, we see a lot of displacements,” said Michael Czinkota, a professor of marketing and international business at Georgetown University. “Does that contribute to uncertainty by customers? Absolutely, yes.” That situation isn’t likely to improve soon. Gas prices, for one, will likely stay elevated as long as investors remain nervous that the world’s oil supply could be disrupted. Already, Libya’s oil output has been reduced by three-fourths. It could fall to zero, the chairman of Libya’s National Oil Corporation said in a televised media conference last week. Investors, whose contracts help boost the price of oil, seem concerned that supply disruptions could strike the region’s major producers. Tensions between Saudi Arabia and Iran, which together provide more than 17 percent of the world’s oil, appear to be mounting. If that supply were compromised, prices would likely skyrocket. “The ‘fear premium’ built into these prices will likely remain,” Baumohl said. “No one has a clue how all these disruptions — the friction in Saudi Arabia, in Lybia and Bahrain — how all this will play out.” Still, the decline in consumer confidence may be temporary. Such measures are sensitive to news and are liable to change, said Tim Quinlan, an economist at Wells Fargo. “These sorts of measures tend to get big movements off of either job market moves or gasoline prices,” Quinlan said. “You add to that news stories of political instability all over the Middle East and the earthquake in Japan, and fears about radiation in water in Tokyo — you tend to rattle cages with consumers all over the world.”

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Japanese Automakers Further Delay Restarting Factories

March 22, 2011

TOKYO (Reuters) – Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) cut output at five more plants and Toyota Motor (7203.T: Quote, Profile, Research, Stock Buzz) further delayed restarting its Japanese assembly lines, as the country’s catastrophic earthquake plays havoc with the global supply of parts and products. Global electronics and autos companies have been hardest hit by the turmoil, but in an illustration of how the ripples are spreading, global miner Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) (RIO.AX: Quote, Profile, Research, Stock Buzz) warned the disruptions posed a threat to its expansion plans. More than 10 days after a 9.0 magnitude earthquake and 10-meter tsunami struck the northeast of Japan, manufacturers are struggling to get back up to speed as factories grapple with power cuts, crippled infrastructure and a shortage of parts. Such is Japan’s position in the global supply chain that companies from Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz) to General Motors Co (GM.N: Quote, Profile, Research, Stock Buzz) and Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz) are feeling the impact. Toyota, the world’s largest automaker, said all 12 Japanese assembly plants would remain closed until at least Saturday and it was not sure when they would reopen. Production lost between March 14-26 would be about 140,000 units. Toyota had hoped to have resumed assembly on Tuesday. Electronics giant Sony said five more of its plants, mostly in central and southern Japan, were hit by parts shortages stemming from the disaster and would close or reduce output until the end of the month. “If the shortage of parts and materials supplied to these plants continues, we will consider necessary measures, including a temporary shift of production overseas,” the maker of PlayStation games consoles said in a statement on Tuesday. The plants make products such as digital and video cameras, televisions and microphones, Sony said. A sixth plant in Chiba, north of Tokyo, was set to resume production on Tuesday, but it could be interrupted by rolling blackouts that are affecting some areas supplied by Tokyo Electric Power (TEPCO) (9501.T: Quote, Profile, Research, Stock Buzz), the operator of the stricken Fukushima nuclear plant. Including two factories only partially restarted last week, 15 of Sony’s 25 Japanese plants are currently affected. It has a total of 54 plants worldwide. TECH CHAIN VULNERABLE Japan’s grip on the global electronics supply chain is causing particular concern. It produces around a fifth of the world’s computer chips and exported 7.2 trillion yen ($91.3 billion) worth of electronic parts last year, research from Mirae Asset Securities shows. “There are a huge number of little bits of the high-tech food chain which are done nowhere but in Japan,” said Sam Perry, senior investment manager of Pictet Japanese Equity Selection Fund. “Nobody else has the quality or the consistency, and in some cases the technology, to do it.” Japan dominates with the supply of LCD film and sealants for semiconductors, among other areas, Perry added. “You simply can’t do high-tech without Japan.” Fujifilm Holdings (4901.T: Quote, Profile, Research, Stock Buzz), the largest producer of triacetyl cellulose film used in making LCD panels, said its main factories are all west of Tokyo and were not directly affected. It has other facilities in northeast Japan, but said any disruptions were unlikely to damage its earnings. Konica Minolta (4902.T: Quote, Profile, Research, Stock Buzz), the second-largest maker of the LCD film, said its three factories in the Tokyo region had been affected by the rolling power cuts. Company officials declined to specify what these factories produce. Camera and copier maker Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz), which has suspended all its domestic camera production until at least Thursday, said a lack of gasoline was affecting distribution and stopping staff getting to work in areas such as the island of Kyushu, where train services are minimal. Nikon (7731.T: Quote, Profile, Research, Stock Buzz), which makes cameras and precision equipment, said it expects to resume production at all its north Japan plants by the end of March, but warned power cuts and shortages of parts could make a return to full production difficult. Renesas Electronics Corp (6723.T: Quote, Profile, Research, Stock Buzz), the world’s No.5 chipmaker, restarted operations on Saturday at a semiconductor plant in Yamagata prefecture, in northwest Japan, a company spokeswoman said on Tuesday — leaving output suspended at six of the firm’s 22 factories in Japan. RIPPLES SPREAD Rio Tinto, the world’s No.2 iron ore miner behind Brazil’s Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz), is worried the disaster will disrupt supplies of mining equipment, tires and parts, which could set back some of its expansion plans. “The impact of the Japanese earthquake and tsunami have been many and diverse, and they affect us,” Rio’s head of iron ore Sam Walsh told an industry conference in Perth. “Some steel mills have suspended operations and suppliers of heavy equipment, such as Hitachi, have been impacted,” he said. Hitachi Construction (6305.T: Quote, Profile, Research, Stock Buzz), Japan’s No.2 maker of earthmoving equipment, said five plants in Ibaraki prefecture, north of Tokyo, closed after the quake. Three have partially reopened, but there is no timetable for re-opening the others. Tsunami damage to the nearest port means Hitachi is shipping some products from Yokohama, near Tokyo. Car makers are also struggling to get production lines restarted. On top of Toyota’s delays, Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) (HMC.N: Quote, Profile, Research, Stock Buzz) was also extending its production suspension until Sunday from Thursday. A fifth of Honda’s leading Japan-based suppliers affected by the earthquake have said it will take “more than a week” to recover, Honda said late on Monday. In a sign of some return to normality, Japan’s top three steelmakers reported some progress in restoring production. Nippon Steel Corp (5401.T: Quote, Profile, Research, Stock Buzz) said output at the three blast furnaces at its mainstay plant in eastern Japan had recovered to pre-quake levels, while JFE Steel Corp (5411.T: Quote, Profile, Research, Stock Buzz) said two blast furnaces at its 10 million tonnes-a-year plant near Tokyo were now operating normally. (Additional reporting by Junko Fujita and Nathan Layne in TOKYO and James Regan in PERTH; Writing by Lincoln Feast, Editing by Ian Geoghegan) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Video: Wallace Says U.S. Nuclear Plants Are Safely Designed

March 19, 2011

March 18 (Bloomberg) — Michael Wallace, chief operating officer at Constellation Energy Group Inc., talks about the safety of U.S. nuclear plants. Prime Minister Naoto Kan says Japan’s nuclear crisis remained “very grave” as forecasts indicate changing winds could start moving radiation closer Tokyo by the end of the weekend. Wallace speaks with Emily Chang and Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Japanese Automakers Search For Alternative Suppliers Post-Quake

March 18, 2011

TOKYO — Japan’s major automakers are trying to find alternative parts suppliers to replace those knocked out of action by the colossal earthquake last week that has forced most of the country’s car production to a halt. Analysts say production is likely to resume within the next few weeks, bouncing back from the Mar. 11 quake and tsunami which killed more than 6,000 people. Once parts are coming, automakers will be able to make up for much of the lost production in coming months, they say. What’s likely to hurt in the longer run are logistical difficulties caused by destroyed roads, and limits on electricity use. Power stations have suffered damage including several nuclear power reactors that are beyond recovery – and leaking radiation in a still unfolding crisis. The yen’s recent surge to record highs could also hamper automakers. Toyota Motor Corp., maker of the Prius hybrid and Lexus luxury models, has stopped production at auto assembly plants throughout Japan through next Tuesday. Among Japan’s automakers, it will likely be least affected because most of its suppliers are located near the company’s Nagoya headquarters, southwest of Tokyo, which is far from the disaster’s epicenter in the northeast. Honda Motor Co. said its production halt at auto assembly plants in Japan will be extended by three days until March 23. Earlier this week, Nissan Motor Co. and Mitsubishi Motors Corp. restarted some plants using their stocks of parts, which will continue only as long as inventory lasts. “It’s all guesswork,” Koji Endo, analyst with Advanced Research Japan, said of the potential damage. Automakers are scrambling to find other suppliers, including overseas ones, to replace those disabled by the 9.0-magnitude quake, he said. Northeastern Japan is home mostly to tertiary parts-makers – the tiny machine shops that make parts for secondary and other suppliers. Parts-makers higher up in the supply chain will be able to make those parts instead, Endo said. He estimates the loss for Toyota at about 6.5 billion yen ($81 million) or 13,000 vehicles at day, but Toyota can make up for that by boosting production later on. Goldman Sachs said in a report this week that the damage to automakers will be short term, and parts-makers have recovered quickly from previous earthquakes. Nissan’s engine plant in northeastern Japan suffered damage, and a transmission plant was damaged from another quake Tuesday in Shizuoka, southwest of Tokyo. That could prove more serious as suppliers for engines and transmissions are harder to replace. Spokesman Mitsuru Yonekawa said damage was being assessed and it was unclear when production will resume. Nissan said Friday that checks began this week for traces of radioactive material in vehicles to avoid spreading contamination. Fears about radiation leaks have been growing because of the crisis at the Fukushima Dai-ichi nuclear power plant, which is spreading low levels of radiation in northeastern Japan, forcing nearby areas to be evacuated amid efforts to cool overheating nuclear reactors. Toyota said it may decide next week’s plans by later Friday. It began production for repair and replacement parts Thursday, and plans to start production of parts for overseas production, including knockdown car assembly, Monday.

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G7 Financial Ministers Plan Emergency Meeting

March 17, 2011

TOKYO (Reuters) – Financial leaders of the world’s richest countries will hold talks on Friday on ways to calm global markets roiled by Japan’s nuclear plant crisis and concern it will unravel the world economy’s fragile recovery. Rising alarm over the unfolding disaster in Japan following an earthquake and tsunami has sent shivers through world markets, hitting shares and other riskier assets, such as commodities, while prompting investors to scurry for the safety of government debt. The yen soared in disorderly trading to a record high against the dollar on speculation Japan will repatriate billions of dollars in overseas funds to pay for massive reconstruction that is expected to be much costlier than the bill following the Kobe earthquake in 1995. “I think the world economy is going to go right down and it has happened at a time when financial markets are still fragile,” said a central banker of a Group of Seven country. The comments, made on condition of anonymity, are a testimony to the degree of concern among top policymakers about the potential impact of Japan’s triple disaster and in particular its race against time to prevent a nuclear meltdown. The G7 financial ministers and central bankers will hold a telephone conference call around 2200 GMT on Thursday (7 am Tokyo time Friday), Japan’s finance minister, Yoshihiko Noda, said as financial markets braced for potential currency intervention following the yen’s surge. “I don’t think stock and currency markets are in a state of turmoil,” Japan’s economy minister, Kaoru Yosano, said in an interview with Reuters. “We would like to get psychological support from the G7,” he said. The triple disaster, unprecedented in a major developed economy, is already disrupting global manufacturing. SUPPLY CHAIN Makers of equipment for mobile telephones to carmakers and chipmakers have warned of a squeeze on their businesses given Japan’s crucial role in many supply chains that keep global commerce ticking over. The technology sector felt an immediate impact after Friday’s quake and tsunami since Japan makes around a fifth of the world’s semiconductors. NAND flash memory chips, used in various electronic gadgets, soared 20 percent on Monday. On Thursday, electronic conglomerate Toshiba Corp said an assembly line that makes LCD displays for smartphones and other devices will be shut for a month to repair machinery damaged by the quake. The company’s shares are already reeling on speculation its nuclear power business will suffer after governments globally have raised doubts about the industry’s future. China suspended approvals for new nuclear plants on Wednesday, effectively putting on hold the world’s most ambitious expansion plan. Economists fear an extended slump for the world’s third-biggest economy with a recession possibly lasting two or three quarters. Billions of dollars have already been wiped off the stock market, a surging yen is threatening the economy’s key exports industry and an electricity gap that could last months. The economy bounced back quickly after the Kobe earthquake. Industrial output fell for one month but the overall economy continued to expand. “The economic cost of the disaster will be large,” economists at JP Morgan said. “There has been substantial loss of economic resources and economic activity will be impeded by infrastructural damages in the weeks and months ahead.” The effect on global economic growth may be more limited. BNP Paribas estimates the disaster will shave 3 percent from Japan’s projected GDP this year, Paul Mortimer-Lee, head of market economics, said. That would account for just 0.2 percent of world output. YEN POWERS TO RECORD HIGH A big concern for G7 financial leaders will be the potential for a surge in yen repatriation to Japan to unsettle global markets. In addition, many investors borrow in yen to fund investments in other currencies, so may be vulnerable if their positions are squeezed. That also would push the yen higher. “If there is a requirement for Japan to start to repatriate, I think an important role that authorities might play is to make sure that financial markets are stable,” said Robert Rennie, chief currency strategist at Westpac Institutional Bank in Sydney. “And if that involves the authorities helping to smooth financial markets, under the circumstances I think that is very understandable,” he said. What also worries policymakers is that Japan’s disaster has come at a vulnerable time for the global economy and financial market confidence following the global financial crisis. The G7 talks will address the impact of the crisis on economic growth, energy output, the supply chain and financial markets, a French government source said on Wednesday. Japan’s central bank has pumped billions of dollars in cash into its banking system to help stabilize jittery markets and government leaders have called for calm. Instead, market moves exposed an increasing nervousness over the Fukushima nuclear power plant where engineers are scrambling to prevent a meltdown. Premiums on retail prices of gold bars in Tokyo rose on Thursday to $2 an ounce over London spot prices from par before the quake. The yen soared to a record high of 76.25 per dollar, flying past its previous record high of 79.75 which occurred in the wake of the Kobe earthquake. The yen later back tracked to around 79.00 per dollar, marking extreme volatility for a major currency and relatively illiquid conditions. “Fear is the only factor driving the market today and if you look at news about temperatures rising, things exploding, you’re not going to trade calmly, right?” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. Currency traders said the market was disorderly during the yen’s surge. “It’s mayhem out there,” said a trader at an Australian bank in Sydney. “The yen’s been moving a big figure a second on occasions. A lot of people are crying out for the central banks to step in.” Japan’s Nikkei stock market index fell on Thursday by 1.4 percent, for losses this week of more than 12 percent. Shares elsewhere in Asia fell 1 percent, for losses this week of 2.7 percent. U.S. stocks lost ground on Wednesday on Japan concerns. The broad S&P index and the tech-heavy Nasdaq fell into negative territory for 2011. The so-called Wall Street fear gauge — the CBOE volatility index — jumped 21 percent, the biggest percentage gain in almost a month. With world alarm rising, operators of the nuclear power plant in Japan dumped water on overheating reactors on Thursday as engineers worked furiously to run power from the main grid to fire up water pumps needed to cool two reactors. “The worst-case scenario doesn’t bear mentioning and the best case scenario keeps getting worse,” said Perpetual Investments, one of Australia’s biggest fund managers, in a market note. (Additional reporting by David Chance, John Mair, Kevin Lim, Yoo Choonsik; Writing by Neil Fullick; editing by Vidya Ranganathan) Copyright 2011 Thomson Reuters. Click for Restrictions .

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At California Nuclear Plant, Emergency Response Plans Don’t Include Earthquakes

March 16, 2011

As the world’s attention remains focused on the nuclear calamity unfolding in Japan, American nuclear regulators and industry lobbyists have been offering assurances that plants in the United States are designed to withstand major earthquakes. But the emergency plan for the Diablo Canyon nuclear plant on the California coast, which sits less than a mile from an offshore fault line, does not include a ready response for an accident triggered by an earthquake. Though experts warned from the beginning that the plant would be vulnerable to an earthquake, asserting 25 years ago that it required an emergency plan as a condition of its license, the Nuclear Regulatory Commission fought against making such a provision mandatory as it allowed the facility to be built. As Americans absorb the spectacle of a potential nuclear meltdown in Japan — one of the world’s most proficient engineering powers — the regulatory review that ultimately enabled Diablo Canyon to be built without an earthquake response plan amplifies a gnawing question: Could the tragedy in Japan happen at home? Experts who recall how the California plant came to be erected offer a disconcerting answer: Yes. And some are calling for more urgent government action to review safety at nuclear plants across the country. “What they’re displaying now is exactly what was wrong in the past with the nuclear establishment, which is that they didn’t have their priorities right,” said Victor Gilinsky, who served on the Nuclear Regulatory Commission during the Diablo Canyon debate and agreed with the call for greater attention to earthquakes in emergency plans. “They’re more concerned about the protection of the plants, and installation of further plants, than they are about public safety. The president should be saying, ‘I want every single plant reviewed.’” Back when the California plant was being finalized in the mid-1980s, local activists and environmental lawyers sued the Nuclear Regulatory Commission in an effort to slow the project, arguing that the clear risks from earthquakes nearby required additional planning. The case made its way to the U.S. Court of Appeals in Washington, D.C., where a 5-4 majority — including current Supreme Court Justice Antonin Scalia and former Clinton independent counsel Kenneth Starr — ruled that earthquakes did not have to be included in the plant’s emergency response plans. The underlying theory was that the plant’s design, which came after years of planning and geological studies, could withstand any foreseeable earthquake in the area — the same assumption that guided thinking in Japan. Emergency response plans at the Diablo Canyon plant still do not take an earthquake-induced nuclear release into account. “What they’re saying is that there could be an earthquake, but in no way could it ever cause a radioactive release at the same time,” said Rochelle Becker, who led the San Luis Obispo, Calif., group that first sued the Nuclear Regulatory Commission over earthquake preparedness in the 1980s. “I’m pretty sure we now have evidence that it does.” A spokeswoman for the Nuclear Regulatory Commission confirmed that the emergency response plans at Diablo Canyon do not have an earthquake contingency plan because the commission is satisfied that the plant’s structure will be able to withstand an earthquake in the area — calculated as a maximum magnitude of 7.5. But officials at Tokyo Electric Co., the operator of Japan’s stricken Fukushima Daiichi plant, said over the weekend that the strongest earthquake they had anticipated was much lower than the magnitude-9.0 quake that struck last Friday. “That’s a lesson that we ignore at our own peril, because we could be wrong, too,” said Joel Reynolds, the attorney who originally brought the case against the Nuclear Regulatory Commission and who is now a senior attorney with the Natural Resources Defense Council in California. “It is a story as old as science that we’re always learning new things. We’re always discovering the unexpected.” Critics have raised particular questions about how a standard emergency response to a nuclear disaster could be complicated if it had been caused by an earthquake, where roads and other surrounding infrastructure would also be impaired. So far, the commission has not specifically recommended any changes to safety regulations or emergency response procedures at nuclear plants in the United States. “All our plants are designed to withstand significant natural phenomena like earthquakes, tornadoes and tsunamis,” the commission’s chairman, Gregory B. Jaczko, said earlier this week. “We believe we have a very solid and strong regulatory infrastructure in place now.” He added that the commission would “continue to take new information and see if there are changes that we need to make with our program.” Michael Mariotte, the executive director of the Nuclear Information and Resource Service, a group critical of the nuclear industry and the regulatory process, said the pushback on response planning reflects an environment where the industry is helped along by regulators. “That’s the logic behind a lot of our nuclear regulation, unfortunately, is that it’s designed to accommodate the operation of a plant, and not necessarily the protection of the public,” Mariotte said. “If they acknowledged that an earthquake occurred that damaged the plant, then they’re also acknowledging that an earthquake has damaged the transportation infrastructure, that you can’t get people out properly, that the plant doesn’t work, and then it can’t be approved.” At the time the Diablo Canyon case was being litigated in the mid-1980s, the Nuclear Regulatory Commission and the electric utility looking to build the plant had been dealing with more than a decade’s worth of federal and state reviews for the facility. Federal regulators were comfortable with their seismic reviews of the remote coastal area between Los Angeles and San Francisco. Comments made during closed meetings, later released to the public, showed that some NRC commissioners were concerned that additional public hearings surrounding the emergency response plan and earthquakes would slow the process further. “One of the things that I think makes me shy away often from hearings is because as soon as we hear the word ‘hearing,’ you see so much time elapse that it maybe over-influences one,” then-NRC Chairman Nunzio J. Palladino, who has since passed away, said at the time. “I do feel that at this late stage, requiring a delay while we wait for a hearing is not in the best national interest.” When the case involving earthquake response was eventually litigated all the way to the federal appeals court in D.C., which ultimately sided with the Nuclear Regulatory Commission, the five-member majority noted that there had already been extensive review of seismic activity around the plant. “We can think of no potential natural or unnatural hazards, regardless of their improbability, that the Commission would not be required to consider,” failed Reagan Supreme Court nominee Robert Bork wrote in an opinion for the appellate court. “That is a prescription for licensing proceedings that never end and plants that never generate electricity.” The four dissenting judges, including current Supreme Court Justice Ruth Bader Ginsburg, noted: “The very purpose of the exercise is to plan for the unthinkable eventuality that the design safeguards will not prevent an accident.” “It defies common sense to exclude evidence about the complicating effects of earthquakes from a proceeding dealing with how to respond to a nuclear accident at a plant located three miles from an active fault, a plant in which seismic concerns dominated the design and construction proceedings for well over a decade,” the justices wrote. In recent years, the utility that operates Diablo Canyon, Pacific Gas and Electric Company, has recently found another fault line less than a mile from the plant after conducting research with the U.S. Geological Survey. The plant’s original design had accounted for a fault that was farther offshore — about three miles from the plant. The spokeswoman for the Nuclear Regulatory Commission, Lara Uselding, said the utility has not found evidence that the newly discovered fault line would pose a risk to the plant. The commission is currently reviewing the company’s geological report.

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Nuclear Safety Debate Hits Stock Prices

March 16, 2011

General Electric, which designed all six (and built three) of the reactors at the stricken Fukushima Daiichi nuclear power plant in Japan, has lost over $10 billion in market value since last Friday. The March 11 earthquake in Japan, and the devastating tsunamis which followed, critically damaged the nuclear power plant in Fukushima, 150 miles north of Tokyo, raising the threat of a meltdown. After radiation levels at the plant grew dangerously high on Wednesday, workers were temporarily evacuated. Shares in the companies like GE heavily involved in the design and construction of the power plant fell sharply as soon as news of the damage and radiation leaks broke. As the debate turned to the safety of nuclear power plants in the U.S., analysts, expecting construction delays at new plants, cut expectations for shares of companies that build and run American power plants, along with companies that mine the nuclear fuel uranium. GE saw the worst drop of all 30 companies in the Dow Jones industrial average, according to Bloomberg, with shares falling 3.7 percent to $19.61 between March 11 and March 15. Shares of Japanese firm Hitachi, which runs the stricken plant along with GE, fell 6.3 percent in trading on Monday, before recovering. GE’s nuclear power arm, represents a small fraction of the firm’s income, making up around $1 billion of GE’s $150 billion in revenue in 2010, Bloomberg reported. The firm also has no legal liability for the crisis in Japan. Toshiba, which was responsible for building another of the nuclear reactors at the Fukushima Daiichi plant, also fell 10 percent on Monday, Marketwatch reported. U.S. firms more involved in the nuclear power industry , are likely to take a harder hit as the crisis plays out, Marketwatch reported, with questions over the safety of nuclear power . Shares at energy firm Entergy, which runs 12 U.S. nuclear power plants, fell 2 percent on Tuesday, Businessweek reported. Citing concerns about the safety of American nuclear power plants, especially in earthquake-prone parts of the country, as well as possible delays to new construction and possible higher costs, Steve Fleishman, analyst at Bank Of America Merrill Lynch cut ratings for Entergy and Scama Corp, which is planning to build two nuclear reactors in South Carolina, according to the Wall Street Journal . Companies which mine uranium , an element used to power nuclear power plants, are also expected to suffer, while renewable energy stocks trade higher the WSJ reported.

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Video: Aftershocks Continue in Japan; Rain May Spread Radiation

March 16, 2011

March 16 (Bloomberg) — Bloomberg’s Margaret Conley in Tokyo reports the latest news on the crisis in Japan. A second fire in as many days broke out at a Japanese reactor hours after more earthquakes struck a country battling to avert a nuclear meltdown following last week’s record magnitude earthquake and tsunami. (Source: Bloomberg)

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Video: U.S. Stocks Pare Decline on Fed Statement on Economy

March 15, 2011

March 15 (Bloomberg) — Bloomberg’s Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks escaped the brunt of a global selloff that sent Tokyo shares to their worst two-day decline since 1987, paring losses as Japanese officials made progress in stabilizing damaged nuclear reactors and the Federal Reserve said the American economy is improving. Bloomberg’s Pimm Fox also speaks. (Source: Bloomberg)

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TEPCO cuts power in Tokyo

March 15, 2011

TEPCO cuts power in Tokyo

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Video: Kelley Sees Progress in Japan Nuclear Health Precautions: Video

March 14, 2011

March 14 (Bloomberg) — Robert Kelley, nuclear engineer and former contractor for the U.S. Department of Energy, discusses the damage and safety of Tokyo Electric Power Co.’s Fukushima Dai-Ichi nuclear plant. Kelley, speaking with Deirdre Bolton on Bloomberg Television’s “InsideTrack,” also talks about the outlook for nuclear energy following the March 11 Japanese earthquake and tsunami. (Source: Bloomberg)

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Toyota Indefinitely Shuts Down Two Japanese Factories

March 12, 2011

(Reuters) – Toyota Motor Co (7203.T) said it has halted production at two factories with combined annual capacity of 420,000 small cars built mainly for overseas markets, after a massive earthquake hit Japan the previous day. Toyota, Japan’s biggest carmaker, said it had not decided when it will restart either facility. Managers at the plants, one in Iwate prefecture and the other in Miyagi prefecture, the areas hardest hit by Friday’s quake and subsequent tsunami, has evacuated personnel, so the current state of the facilities is unknown, Toyota said. Nissan Motor (7201.T) said that it had halted output at four plants in northeast Japan and close to Tokyo and suspended work at an operation center. The factories will stay idle Sunday and Monday, it said. Staff at locations close to the coast were evacuated, while employees at other facilities were urged to remain on site. Two workers at a plant in Tochigi prefecture were slightly injured by the quake, Nissan said. Honda Motor (7267.T), Japan’s No. 3 carmaker, said four of its domestic plants and a research and development center will stayed shuttered on Monday. (Reporting by Kentaro Sugiyama; Writing by Tim Kelly) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Art Levine: Report: Explosion at nuclear plant in Japan (VIDEOS). Officials Fear: Meltdown at Reactor?

March 11, 2011

The AP reports: TOKYO, Japan — The walls of a building at nuclear power station crumbled Saturday as smoke poured out and Japanese officials said they feared the reactor could melt down following the failure of its cooling system in a powerful earthquake and tsunami. It was not clear if the damaged building housed the reactor. An official said the utility that runs the Fukushima Daiichi plant was reporting that several workers may have been injured. Fukushima Prefecture official Masato Abe said the cause of the rattling and smoke was unclear, declining to say whether an explosion had occurred. Footage on Japanese TV showed that the walls of one building had crumbled, leaving only a skeletal metal frame block standing. Puffs of smoke were spewing out of the plant. Pressure has been building up in the reactor — it’s now twice the normal level — and Japan’s Nuclear and Industrial Safety Agency told reporters Saturday that it was venting “radioactive vapors” to relieve that pressure. Officials said they were measuring radiation levels in the area. The reactor in trouble has already leaked radiation: Operators at the Fukushima Daiichi plant’s Unit 1 detected eight times the normal radiation levels outside the facility and 1,000 times normal inside Unit 1′s control room. Japanese officials fear a meltdown,but it’s not known if the reactor has been breached. Here’s footage of the BBC airing the moment of explosion . Japanese TV first aired shots of smoke from the explosion: Follow breaking real-time news on nuclear crisis in Japan at www.topsy.com . UPDATE : BBC has a more alarming report: : Huge blast at Japan nuclear power plant A massive explosion has struck a Japanese nuclear power plant after Friday’s devastating earthquake. A huge pall of smoke was seen coming from the plant at Fukushima and several workers were injured. Japanese officials fear a meltdown at one of the plant’s reactors after radioactive material was detected outside it. A huge relief operation is under way after the 8.9-magnitude earthquake and tsunami, which killed more than 600. Hundreds more people are missing and it is feared about 1,300 may have died. The offshore earthquake triggered a tsunami which wreaked havoc on Japan’s north-east coast, sweeping far inland and devastating a number of towns and villages. Japan’s Prime Minister Naoto Kan declared a state of emergency at the Fukushima 1 and 2 power plants as engineers try to confirm whether a reactor at one of the stations has gone into meltdown . Read more: http://www.foxnews.com/world/2011/03/12/shaking-smoke-seen-japanese-nuclear-plant-facing-possible-meltdown/#ixzz1GNGlzvbv

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Video: Commuters Stranded After Japan Earthquake, Tsunami

March 11, 2011

March 11 (Bloomberg) — Tokyo’s subway system, the world’s busiest with about 8 million riders a day, shut down after today’s 8.9-magnitude quake and tsunami struck the city, leaving commuters to wait hours for taxis or search for somewhere to spend the night. Retail store shelves were also left empty as victims struggled to buy supplies and food amid the disaster. Police say 60 people were killed and 56 are missing, according to the Associated Press. Bloomberg’s Mike Firn reports. (Source: Bloomberg)

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Video: Okubo Says Japan Quake Could Cause 1% Hit to GDP

March 11, 2011

March 11 (Bloomberg) — Takuji Okubo, chief Japan economist at Societe Generale Securities, discusses the potential impact of the 8.9-magnitude earthquake in Japan on its economy. Okubo speaks from Tokyo with Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Video: Powerful Quake Rocks Japan, Triggers Deadly Tsunami

March 11, 2011

March 11 (Bloomberg) — Japan was struck by its strongest earthquake in at least a century, an 8.9-magnitude temblor that shook buildings across Tokyo and unleashed a tsunami as high as 10 meters, engulfing towns along the northern coast. At least 26 people were killed by the 33-foot wave and many are missing, according to state broadcaster NHK Television. Bloomberg’s Mike Firn reports. (Source: Bloomberg)

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Video: HSBC’s Qu Says Stock Market Reaction to Quake Temporary

March 11, 2011

March 11 (Bloomberg) — Qu Hongbin, co-head of economic research at HSBC Holdings Plc, talks about the stock, currency and bond market reaction to the earthquake in Japan and the effect of the disaster on economic growth. Japan was struck by its strongest earthquake in at least a century, an 8.9-magnitude temblor that shook buildings across Tokyo and unleashed a tsunami as high as 10 meters, engulfing towns along the northern coast. Qu speaks with Maryam Nemazee on Bloomberg Television’s “The Pulse.”

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Video: Japan Hit by 8.9 Maginitude Earthquake, 10-Meter Tsunami

March 11, 2011

March 11 (Bloomberg) — Bloomberg’s Mike Firn reports from Tokyo on the 8.9-magnitude earthquake that struck off the coast of northern Japan. Mark Barton also speaks on Bloomberg Television’s “Countdown.”

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Ian Fletcher: In Praise of Mercantilism (or Why Economic History Isn’t Boring)

February 26, 2011

Does economic history hold a giant clue for getting America out of its present trade mess? Yes, because it debunks the idea that free trade is how nations become prosperous. Instead, it shows that nations win at international trade by playing a 400-year-old game called mercantilism. Let’s look at England, for example. The great Adam Smith, founder of modern economics, published his epoch-making free-trade tract The Wealth of Nations , the origin of endless subsequent delusions, in 1776. But he was a hypocrite, for Britain in 1776 was not a blank slate upon which free markets and free trade could work their magic. It was instead the beneficiary of several prior centuries of protectionism and industrial policy. In the words of British economist William Cunningham: For a period of two hundred years [c. 1600-1800], the English nation knew very clearly what it wanted. Under all changes of dynasty and circumstances the object of building up national power was kept in view; and economics, though not yet admitted to the circle of the sciences, proved an excellent servant, and gave admirable suggestions as to the manner in which this aim might be accomplished. England in this era was, in fact, a classic authoritarian (this is long before English democracy) developmentalist state: a Renaissance South Korea , with kings rather than the military dictators who ruled South Korea for most of the Cold War period. English industrialization must actually be traced 300 years prior to Adam Smith, to events like Henry VII’s imposition of a tariff on woolen goods in 1489. King Henry’s aim was to wrest the wool weaving trade, then the most technologically advanced major industry in Europe, away from Flanders (the Dutch half of present-day Belgium), where it had been thriving upon exports of English wool. Flemish producers were entrenched behind huge capital investments, which gave them economies of scale sufficient to outcompete fledgling entrants into the industry. So only government action could get England a toehold. Even in the 15th century, there was an awareness that being an exporter of agricultural raw materials was a dead end–a problem impoverished African and Latin American nations wrestle with to this day. And there was an awareness that free trade will not lift a nation out of this predicament: you need some well-chosen protectionism. Henry VII created, in fact, the first national industrial policy of the modern era, long before the Industrial Revolution introduced artificial energy sources like steam power. A whole interlocking series of now-forgotten policy moves underlay the rise of English industry; what all these measures had in common was that protectionism was essential to making them work . In the words of economist John Culbertson of the University of Wisconsin and the Federal Reserve Board of Governors: Step after step in the cumulative economic rise of England was directly caused by government action or depended upon supportive government action: the prohibition of importation of Spanish wool by Henry I, the revision of land-tenure arrangements to permit the development of large-scale sheep raising, Edward III’s attracting of Flemish weavers to England and then prohibiting of the wearing of foreign cloth, the termination of the privileges in London of the Hanseatic League under Edward VI, the near-war between England under Elizabeth I and the Hanseatic League, which supported the rise of English shipping. And then there was the prohibition of export of English wool (which damaged the Flemish textile industry and stimulated that of England), the encouragement of production of dyed and finished cloth in England, the use of England’s dominance in textile manufacture to push the Hanseatic League out of foreign markets for other products… The aim of English policy was what would today be called “climbing the value chain”: deliberately leveraging existing economic activity to break into more-sophisticated related activities. Henry VII’s advisors got their economic ideas ultimately from the city-states of Renaissance Italy, where economics had been born as a component of Civic Humanism, their now-forgotten governing ideology. The name for this forgotten developmentalist wisdom of early modern Europe that has stuck is “mercantilism.” One of the great myths of contemporary economics is that mercantilism was an analytically vacuous bundle of gold-hoarding prejudices. It was, in fact, a remarkably sophisticated attempt, given the limited conceptual apparatus of the time, to advance national economic development by means that would be familiar and congenial to the technocrats of 21st-century Tokyo, Beijing, or Seoul. (And believe me, they’re still using these techniques against us.) For 400 years, this is how former Third-World nations have become former Third World nations. Mercantilists invented many economic concepts still in use today, such as the balance of payments, value added, and the embodied labor content of imports and exports. They championed the economic interests of the nation as a whole at a time when special interests (notably royal monopolies) were an even bigger problem than today. They began with obvious ideas like taxing foreign luxury goods. They progressed to the idea that exporting raw materials for foreigners to process was bad if the nation could process them itself. They understood that nations rose economically by imitating the industries of already rich nations (first the more primitive industries, then the more sophisticated) and that low relative wages were the key advantage of underdeveloped nations in this game. How little has changed! Mercantilists saw free markets as a useful tool in economics, but not the sum total of economic wisdom. Even their much-mocked obsession with the accumulation of bullion was not as irrational as it is usually depicted as being, given that under a monetary system based on gold, accumulating it is the only way to expand the money supply and drive down interest rates, a boon to investment then as now. Mercantilism, in fact, created the modern European economy and thus made possible the colonial power that economically shaped much of the rest of the world. It is thus the foundation of modern capitalism itself. Anyhow: Britain functioned on a mercantilist basis for centuries before its much misunderstood experiment with free trade began. Even as late as the beginning of the 19th century, Britain’s average tariff on manufactured goods was roughly 50 percent–the highest of any major nation in Europe. And even after Britain embraced free trade in most goods, it continued to tightly regulate trade in strategic capital goods, such as the machinery for the mass production of textiles, in order to forestall its rivals. This was rational, as the win-win logic of free trade starts to break down if productive capital is mobile between nations or if free trade induces productivity growth abroad. After Britain embraced free trade in the mid-19th century, its long economic decline , of course, began. Today, the United States is making the same mistake, having mistaken the temporary tactical advantages of free trade for a nation at the peak of its economic power for a fundamental strategic truth. Meanwhile, our rivals, especially but not only in the Far East, hold firm to the mercantilist principles that we ourselves employed for 150 years. Mercantilism has somewhat different application in developed, rather than developing, nations, but its fundamentals still hold good. At the very least, we need to defend ourselves against mercantilist aggression against us, something we are not doing .

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Euro Steady against US Dollar in Tokyo Trading

February 21, 2011

Euro Steady against US Dollar in Tokyo Trading

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Euro Steady against US Dollar in Tokyo Trading

February 21, 2011

Euro Steady against US Dollar in Tokyo Trading

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Japan Falls Behind China As World’s Number 2 Economy

February 14, 2011

TOKYO (By Tetsushi Kajimoto and Leika Kihara) – Japan’s economy shrank slightly in the final quarter of 2010 but analysts expect a recovery this year as stronger exports to China and other parts of fast-growing Asia offset persistently weak domestic demand. The data confirmed Japan lost its place to China last year as the world’s second-largest economy and highlighted Tokyo’s increasing reliance on its giant neighbor, which buys nearly a fifth of Japan’s exports. Gross domestic product (GDP) shrank 0.3 percent in the October-December period from the previous quarter, slightly less than a 0.5 percent fall expected by markets but still the first contraction in five quarters. That translated into an annualized contraction of 1.1 percent, with analysts largely blaming the weakness on a temporary hit to consumption after the September expiry of government incentives to buy low-emission cars. The data showed Japan’s economy was the weakest among major rich nations, compared with annualized growth of 3.2 percent in the United States in the same quarter. European data due out on Tuesday is expected to show slight growth in the 17-nation euro zone. “The data confirms that the economy entered a lull on a downturn in private consumption, but recent monthly economic indicators such as output and exports show it is unlikely that the lull will be prolonged,” said Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute. “The economy will continue to depend on external demand for growth, as domestic demand is likely to be capped by subdued income growth and the anticipated negative impact from the expiry of subsidies for energy-efficient electrical appliances.” CHINA THE NEW NO.2 The latest GDP figures confirmed analysts’ estimates that China pulled ahead of Japan in 2010 as the world’s second-biggest economy behind the United States on a seasonally unadjusted, nominal dollar basis, at $5.8786 trillion against $5.4742 trillion. Economics Minister Kaoru Yosano said Japan needed to make the most of China’s growth to boost its own fortunes, as it increasingly relies on demand from its Asian neighbor. “The fact that China’s economy is booming is welcome news for Japan as a neighboring country,” Yosano told reporters after the release of the data. “We want to deepen the amicable economic relationship between Japan and China.” Japan’s shipments to mainland China accounted for 19.4 percent of its overall exports last year, making it the No.1 destination for Japanese goods, followed by the United States at about 15.4 percent. The signs of an export-led recovery prompted the government to upgrade its economic assessment last month and dampened expectations of any imminent monetary easing by the Bank of Japan. BOJ policymakers meeting this Monday and Tuesday may see no immediate need to ease policy further through an increase of asset purchases and may instead focus on assessing the strength of the recovery. While recent data showed exports and industrial output rose more than expected in December, a pick-up in the corporate sector is seen unlikely to spill over to personal consumption, which makes up about 60 percent of GDP. Capital expenditure rose 0.9 percent from the previous quarter, slower than the 1.5 percent pace of gains in July-September. Analysts said the increase in capital spending may not lead to stronger consumer spending as companies remain reluctant to boost wages due to fierce global competition, and as workers put a higher priority on job security than wage hikes. The roll-back of government incentives for purchases of energy-efficient household electronics in December will also weigh on private consumption, which fell 0.7 percent from the previous quarter after a 0.9 percent increase in July-September. External demand, or net exports, shaved 0.1 percentage point off GDP, with the yen’s spike to a 15-year high against the dollar during the period hurting exports. BOJ STANDS PAT As the economy remains mired in stubborn deflation, the BOJ is in no position to roll back its comprehensive easing anytime soon. That is in stark contrast with policymakers in other parts of Asia, Europe and elsewhere where the focus is shifting from supporting sustainable recoveries to controlling inflation. China raised interest rates last week for the second time in just over six weeks and further policy tightening is expected from Beijing in the coming months, raising the prospect of a slowdown in Chinese demand for everything from imported electronics to construction equipment and cars. Nissan Motor Co, Japan’s No.2 automaker, raised its annual profit and sales forecasts last week as its big drive into emerging markets such as China pays off. But with Japan’s domestic demand expected to remain weak, a heavy reliance on exports to fuel recovery is expected to pose a risk if external demand stumbles. “Risks from overseas economies and currency moves need to be closely watched,” Economics Minister Yosano said, noting that financial markets were also monitoring the government’s ability to enact legislation in a divided parliament. Highlighting concerns about prolonged political paralysis, a Kyodo news agency survey showed support for Prime Minister Naoto Kan’s government had fallen below 20 percent, a level where some premiers have been nudged out of power in the past. (Editing by Edmund Klamann and Kim Coghill.) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Earth Dragon Resources Appoints Former Olympian and Top Team Coach Jiichiro Date to Board

February 1, 2011

TOKYO–(Marketwire – February 1, 2011) – Earth Dragon Resources, Inc. ( OTCBB : EARH ) (the “Company”) is pleased to announce the appointment of former Olympic gold medalist Mr. Jiichiro Date to the Company’s Board of Directors.

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Earth Dragon Resources Announces New Management

January 21, 2011

TOKYO–(Marketwire – January 21, 2011) – Earth Dragon Resources, Inc. ( OTCBB : EARH ) (the “Company”) is pleased to formally announce the appointment of its new management and board of directors.

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Earth Dragon Resources Appoints Business Consultant Christine Salvesen to Board of Directors

January 14, 2011

TOKYO–(Marketwire – January 14, 2011) – Earth Dragon Resources, Inc. ( OTCBB : EARH ) (the “Company”) is pleased to announce the appointment, effective immediately, of Christine L. Salvesen to the Company’s Board of Directors.

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ABN Newswire and AUN Consulting (TYO:2459) Jointly Present a Seminar on PR Distribution and Search Engine Marketing (SEM) in Tokyo

January 12, 2011

ABN Newswire and AUN Consulting (TYO:2459) Jointly Present a Seminar on PR Distribution and Search Engine Marketing (SEM) in Tokyo

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Why 2010 Was Not Japan’s Year

December 27, 2010

TOKYO — Japan has been overtaken by China as the world’s No. 2 economy. Its flagship company, Toyota, recalled more than 10 million vehicles in an embarrassing safety crisis. Its fourth prime minister resigned in three years, and the government remains unable to jolt an economy entering its third decade of stagnation. For once-confident Japan, 2010 may well mark a symbolic milestone in its slide from economic giant to what experts see as its likely destiny: a second-tier power with some standout companies but limited global influence. As Japanese drink up at year-end parties known as “bonen-kai,” or “forget-the-year gatherings,” this is one many will be happy to forget. Problem is, there’s little to look forward to. With a rapidly aging population, bulging national debt, political gridlock and a risk-averse culture slow to embrace change, Japan’s prospects aren’t promising. And a tense, high-seas spat with China has intensified fears of its neighbor as a military as well as economic threat. A few optimists hope Japan can harness its strength in technology and its “Cool Japan” cultural appeal – from fashion and art to “anime” cartoons. The country needs to shed its reliance on manufacturing, they argue, and find new growth areas such as green energy, software engineering and health care for its elderly. But talk to university students, and their outlook is bleak. Many worry about finding steady jobs and whether they can support families – concerns that have contributed to Japan’s low fertility rate of 1.3 children per woman. Average household income has fallen 9 percent since 1993. Makoto Miyazaki, a 22-year-old student at prestigious Keio University in Tokyo, senses forces outside his control – and Japan’s – are going to dictate his future. “Internationally, Japan is between big countries like China and the U.S. And Korea is becoming a major competitor – that’s a big threat to Japan,” he said. “I feel like we have fewer choices.” It’s a startling contrast with the 1980s, when Japan was flush with cash and some experts believed its economy was poised to dominate the world. Millions have given up the goal of lifetime employment at a major corporation and become “freeters,” flitting among temporary jobs with few if any benefits. As companies cut costs, temporary workers have grown to a third of the work force, up from 16 percent in the mid-1980s. Further, the population is projected to fall from 127 million to 90 million by 2055 – 40 percent of them over the age of 65. That’s going to place a heavy tax burden on workers. Economic difficulty is a chief reason more than 30,000 Japanese have committed suicide every year for the past 12 years. Hopes for change from the Democratic Party, which toppled the long-ruling conservatives last year, have fizzled. The Democrats lost control of the upper house of parliament in July elections, setting the stage for political gridlock. Prime Minister Naoto Kan has acknowledged Japan’s declining status. His prescription: “Open up the country.” He advocates reducing trade barriers, loosening regulations and making the country a more attractive place to invest. His Cabinet recently approved cutting the corporate tax rate by 5 percentage points to 35 percent and is weighing whether Japan should join a U.S.-led free trade zone, the Trans-Pacific Partnership, that would slash tariffs on everything from electronics to food. Business leaders say doing so is vital, but farmers fear a flood of cheaper imports would ruin them. Analysts say it could be a vehicle for economic revival but also lead to job losses and social dislocation, especially in rural areas. “Merely unleashing the forces of competition and the free market isn’t going to do the trick because people who feel vulnerable will crawl back into whatever they have,” said Koichi Nakano, a political science professor at Sophia University in Tokyo. Nakano and others say sweeping changes are needed in both policy and mindset, from expanding the social safety net to overcoming a deep fear of failure that has constrained entrepreneurship and risk-taking – and Japan’s economic potential. About 77 percent of Japan’s jobless aren’t getting unemployment benefits, according to International Labor Organization data, in part because temporary workers don’t qualify. Japan can be innovative: It is the world leader in hybrid vehicles and industrial robots. Nintendo’s “Wii” gaming console is a hit in living rooms around the world. Entrepreneur Tadashi Yanai, Japan’s richest person, built Fast Retailing Co. and its low-cost Uniqlo brand into one of Asia’s biggest clothing retailers. But Japan sometimes undermines itself by being insular. Its sophisticated mobile phone industry, for example, has failed to grow overseas because it operates on a network hardly used anywhere else – earning it the nickname “Galapagos Syndrome.” One optimist is Michael Alfant, an American who has worked in Japan for 20 years. He sees the country becoming more entrepreneurial and focusing on opportunities in service industries. “Japan is reinventing itself,” said Alfant, CEO of Fusion Systems, a startup software company, and the incoming president of the American Chamber of Commerce in Japan. “I’m very confident Japan will get there.” Any change is likely to come gradually. A conformist, consensus-based culture means Japan is generally slow to make changes or respond to crises – as seen in Toyota Motor Corp.’s handling of its safety woes. “One would think there would be more of a sense of urgency here,” said Jeff Kingston, director of Asian Studies at Temple University’s Tokyo campus. “At best, Japan will muddle through, meaning it will avert catastrophe, but it is hard to see anything but bleak prospects in a country that should be doing better given its enormous strengths.” Japan seems destined to follow in the footsteps of former global powers such as France and Britain. That’s not necessarily bad, said Sophia’s Nakano. “If you manage the decline reasonably well and turn things around in a different direction,” he said, “it’s possible to retain some influence and reinvent oneself as a soft power, a relevant player on the world stage.”

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Euro and Yen Rise Against the U.S. Dollar in Tokyo

December 10, 2010

Euro and Yen Rise Against the U.S. Dollar in Tokyo

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