Japan index: Economy is ready to take on tax hike 10 Apr 2014 The Breakingviews Abenomics Index climbed to a six-year high in February, suggesting the economy has enough strength to withstand this month’s sales tax increase. Wages and inflation expectations firmed up, while hopes of further monetary easing pushed bond yields lower.
Nasdaq vertigo warns bubbly global markets 8 Apr 2014 The tech-heavy exchange’s main index has tumbled 6 pct in a month. The sharp rise and recent fall are less alarming than the dot-com bubble of the 1990s. With global liquidity pumps mostly still hard at work, however, software and web stocks are still telling investors something.
Jury’s $9 bln pharma penalty is punitive overdose 8 Apr 2014 Japan’s Takeda and its diabetes drug partner Eli Lilly were ordered to pay the 10-figure sum for covering up cancer risks. Whopping fines are common in the high-risk world of pharmaceuticals. Past cases and judicial guidance, however, suggest that this one may go too far.
Ranbaxy sale shows risk in Japanese M&A adventures 7 Apr 2014 Daiichi Sankyo is handing control of the troubled Indian drugmaker to local rival Sun Pharma in a $3.2 billion all-share deal. The investment has lost almost 40 percent of its value in six years. It’s a reminder of all that can go wrong when Japanese companies venture overseas.
Triple defence will shield Japan from tax burden 31 Mar 2014 The bump in the country’s sales tax on April 1 is threatening growth. But fiscal policy that pumps extra revenue back into the economy and a revival in investor optimism over deregulation can prevent a deflationary funk. If those tactics fail, there is always the Bank of Japan.
Sumitomo’s U.S. expansion needs cautious approach 26 Mar 2014 The Japanese bank is eyeing Royal Bank of Scotland’s American retail arm. A full takeover would give Sumitomo higher margins in a healthier economy and the UK bank a speedier exit from a non-core asset. But Citizens doesn’t yet look a business worth paying through the nose for.
Japan stock market selloff is a temporary setback 19 Mar 2014 Equity indices are down more than 10 pct this year, worse than every large economy but Russia. Jitters over emerging markets and a looming sales tax hike are partly to blame. But with the central bank on standby for more easing, Japanese stocks should benefit from home support.
Japan’s deflation apathy has lessons for euro zone 12 Mar 2014 The country’s history shows even small price declines are risky. Falling wages depress consumption and rising real interest rates suppress investment. Pensions suffer while diplomatic clout erodes. Andy Mukherjee says Japan’s mistakes are a cautionary tale for Europe.
Japan is imperfect deflation model for euro zone 12 Mar 2014 When economists project low or falling prices in the euro zone, they often look to Japan for lessons. Some Japanese experience is undoubtedly relevant. But Edward Hadas says differences in stock markets, workforce, and financial politics are greater than the similarities.
Japan index: Weak demand shows need for stimulus 11 Mar 2014 The Breakingviews Abenomics Index inched higher in January. But manufacturing stumbled, and the trade deficit zoomed, suggesting anaemic demand both at home and abroad. With wages subdued and sales taxes about to rise, the economy may need a fresh dose of monetary easing.
Display IPO offers turnaround lesson for Japan Inc 10 Mar 2014 Two years after scrunching together unloved parts of Sony, Toshiba, and Hitachi, Japan Display is raising up to $3.8 bln. The smartphone screen maker is an example of successful government intervention. But the model and its high-resolution returns will be hard to replicate.
Japan pension debate goes beyond bonds and stocks 7 Mar 2014 A government advisor and the chief of the country’s $1.2 trillion public retirement fund are sparring over asset allocation between debt and equity. While stock market investors have a stake in the turf war, the bigger concern for bond buyers is the surge in pension liabilities.
SoftBank’s Alibaba stake both blessing and burden 27 Feb 2014 Billionaire chief Masayoshi Son is expanding the Japanese internet firm through M&A. But its 37 pct stake in the Chinese e-commerce giant dominates its valuation, according to a Breakingviews calculator. When Alibaba goes public, SoftBank may come under pressure to let it go.
Japan bond investors’ overseas trip may flop again 26 Feb 2014 The Federal Reserve’s taper talk discouraged Japanese investors from venturing abroad last year. Now wobbly emerging markets are threatening this year’s outing. That’s bad news for bondholders searching for better returns - and for the Bank of Japan’s anti-deflation campaign.
Rakuten’s buying spree getting harder to justify 20 Feb 2014 The Japanese e-commerce group’s $900 million purchase of online chat app Viber looks a bargain compared with WhatsApp. But Rakuten’s track record is patchy: it has written off $400 million on past acquisitions since 2012. Deals may create buzz, but investors want earnings.
Japan index: Trade gap, muted wages raise risks 11 Feb 2014 The Breakingviews Abenomics Index improved for the fourth straight month in December. But it masks two risks. A vanishing current account surplus means relying on foreigners to finance bloated public spending. Besides, struggling wage growth could stall private consumption.
Sony jumps onto Japan’s taboo-breaking wagon 6 Feb 2014 The troubled Japanese giant is finally getting serious about restructuring. It’s selling its ailing PC business to a local buyout fund and is separating out its loss-making TV unit. The moves are a welcome sign that Sony is willing to shrink in its bid to return to health.
Abe can afford to ignore slumping Japan equities 5 Feb 2014 The prime minister’s anti-deflation therapy could have done without the 11 percent drop in the stock market this year. But as long as the bond market remains calm and the yen weak enough to help boost inflation expectations, Shinzo Abe can focus on reforms and leave stocks alone.
Don’t blame the economy for melting markets 4 Feb 2014 Small-country troubles, shaky Chinese demand and a few U.S. disappointments would not normally be enough to push investors into fear mode. The current volatility proves what a difference a tapering Fed makes to the health of financial markets.
Nintendo throws investors a Pokemon 30 Jan 2014 Fresh from a profit warning, the games maker says it will license its characters to new partners and use mobile devices to promote its products. Given Nintendo’s lack of internet savvy, sticking to its hardware-focused business model is probably the least bad option for now.