Bank of Japan’s new currency salvo could backfire 29 Jan 2016 The central bank has responded to turmoil in global financial markets by cutting interest rates below zero. The shock move weakens the yen and opens a new front in Japan’s battle against deflation. But it also risks adding to the international tumult that prompted the BOJ to act.
Reformed robot maker tripped up by tech slowdown 29 Jan 2016 Japan’s Fanuc smartened up after activist Dan Loeb took a stake: hiking dividends, cancelling stock, and actually talking to investors. But dismal results reflect the challenges posed by a slowing China and weaker smartphone demand. That’s not something financial policy can fix.
Japan’s Abe loses a shield but keeps his armour 28 Jan 2016 A funding scandal has claimed Economy Minister Akira Amari. Losing a close ally is embarrassing for Shinzo Abe. Still, the PM and his party remain strong. Abe’s plan to revive Japan faces challenges, but they are mostly financial and economic, not political.
Toyota can make handy tune-up with Daihatsu 27 Jan 2016 The world’s top carmaker could buy out minority shareholders in its $5 bln subsidiary. That would eliminate inefficiency while boosting its small-car credentials. It’s also a good use of Toyota stock. A bolder follow-up would be to take control of affiliate Subaru.
Japan’s shareholder-friendly era faces Sharp test 26 Jan 2016 The ailing display-maker is likely to opt for a state-backed rescue over a higher-looking offer from Foxconn of Taiwan. Investors deserve a full explanation. If Japan puts industrial policy first, that would directly contradict its big push to treat investors better.
Foxconn is better off without Sharp 22 Jan 2016 The Taiwanese giant wants to gatecrash a state-backed rescue with its own $5 bln-plus offer. The Japanese group’s display technology would make Foxconn even more indispensable to Apple. But fixing this basket case will be hard. And Sharp’s other businesses are a poor fit.
Japan index: Inflationary mindset still elusive 21 Jan 2016 Our index slipped in November, retreating from its 2015 peak a month earlier. Inflation expectations weakened and wages disappointed. That highlights the challenges the Bank of Japan faces in achieving its 2 percent inflation target, despite Governor Haruhiko Kuroda’s optimism.
Chip giant’s revival is partial success for Japan 19 Jan 2016 State money propping up ailing firms sounds like bad industrial policy. Yet Japan’s INCJ has overseen a real recovery since rescuing Renesas in 2013. Still, the $11 bln chipmaker faces strategic challenges. And INCJ’s likely next patient – electronics group Sharp – is worse off.
Grolsch could leave bitter taste at Asahi 13 Jan 2016 Japan’s top brewer is eyeing beers left over from ABI’s takeover of SABMiller. A mooted $3.4 bln tab for Peroni and Grolsch sounds frothy, especially with limited potential to cut costs. Asahi looks desperate for overseas growth, even at the expense of shareholder value.
China’s troubles catch Japan off-guard 12 Jan 2016 Japan is highly sensitive to its larger neighbour’s economic health. Market turmoil is also strengthening the yen, threatening profit and prices. This could hardly come at a worse time: policymakers already battling deflation and stagnation have few levers left to pull.
Sharp’s rescue choices centre on a Japanese fudge 6 Jan 2016 The ailing electronics group is at once a big debtor, a major employer, and a flag-bearer for cutting-edge Japanese technology. So neither a foreign takeover nor bankruptcy protection would be easy routes to take. A messy state-backed salvage deal remains the likeliest outcome.
Carl Icahn’s Pep Boys fight can go another round 29 Dec 2015 The auto-parts chain is spurning Japan’s Bridgestone in favor of a sweetened $1 bln offer from the raider-turned-activist. Icahn is offering a 52 pct premium. But shareholders seem to be betting that Bridgestone has the financial wherewithal to punch its way to a higher price.
Japan’s outbound M&A wave will sweep up minnows 29 Dec 2015 A growing number of companies are trying to buy their way out of a shrinking home market. While blue-chips like Canon, Nippon Life and Mitsubishi UFJ are still shopping abroad, smaller companies are getting bolder. Watch for less familiar names venturing overseas in 2016.
Japan’s dealmakers rediscover their samurai spirit 23 Dec 2015 Acquisitions by Nomura and Panasonic cap a punchy year for outbound M&A with deals totaling a near-record $79 bln. Overseas purchases have eclipsed domestic ones for a second year. Though assets are getting pricier, Japan’s demographic decline ensures the exodus will continue.
Japan index: Onwards and upwards 16 Dec 2015 Business confidence is holding up and revised data shows Japan dodged a technical recession. Our index also suggests the economic picture may be improving. In October the gauge reached its highest point since 2000: prices, stocks, lending, wages and consumption all crept up.
New Renault-Nissan pact is only roadside repair 14 Dec 2015 France’s growing power at Renault is curbed, as is the French carmaker’s sway in Japan. It ends months of distraction for the auto alliance led by Carlos Ghosn. But the fiddly legal fixes only go so far. It would be better to see the duo drive towards a full merger.
Jobs in Japan outweigh recession-that-wasn’t 8 Dec 2015 Revised data show Japan avoided six straight months of economic shrinkage after all. Bravo. But GDP figures are always volatile and technical recessions count for little in low-growth countries. For Japanese policymakers, the priority is ensuring a healthy labour market and boosting inflation.
Another reckoning looms for Sharp 2 Dec 2015 Lenders have bailed out the embattled Japanese electronics firm twice in the past three years. A more radical overhaul now looks likely – perhaps involving state-backed fund INCJ and affiliate Japan Display. If credit markets are right, there is little value for shareholders.
Toshiba’s overdue nuclear illumination is welcome 30 Nov 2015 The scandal-hit Japanese group has been too fuzzy about the performance of important businesses. Now it has finally laid out the finances and outlook for various key units. Improved disclosure, plus growth potential in nuclear power, should help restore some market confidence.
Japan’s investor revolution is delayed, not dead 20 Nov 2015 Shareholders are souring on the hope that Japan Inc. can become better-run and more profitable. That’s too gloomy. Last year’s returns on equity were humdrum and there have been big disappointments. But real change is underway and the pressure for more is huge.