U.S. protests won’t stop Japan’s yen meddling 28 Dec 2011 The Treasury has rightly criticised Tokyo for weakening the yen. Currency intervention has limited impact, and exporters have learned to live with a strong yen. But fears that traders see the yen as a one-way bet mean more meddling is likely, whether Washington approves or not.
Delphi slips Tokio Marine a $2.7 bln spiked cocktail 21 Dec 2011 That’s one explanation for the Japanese insurer’s Godzilla-sized overpayment for the U.S. group. Including a special dividend, it’s paying a near 80 pct premium. It’s another example of Japan Inc throwing shareholders under the bus in the name of international expansion.
Olympus must dump its board to save itself 15 Dec 2011 The Japanese company’s board wants to hang on until March. That’s too long. Even though it beat an earnings deadline, Olympus still risks being delisted over ongoing accounting concerns. A fresh board can only help, and should also placate creditors and help buoy up the stock.
Olympus’ ex-CEO no shoo-in for post-scandal return 6 Dec 2011 Michael Woodford wants his job back at the Japanese group now that those accused of covering up investment losses have left the board that fired him. But the same board hired him, and he only ran the company for six months. Olympus shareholders should make sure to look around.
Bagehot to cenbanks: liquidity needn’t be cheap 30 Nov 2011 The 19th-century British financier believed in lending freely during crises but at high rates. Wednesday’s coordinated action by the ECB, the Fed et al boosted liquidity and reduced its cost. That could worsen imbalances. A Bagehotian approach would be workable and less risky.
Central banks take on market fears 30 Nov 2011 A six-nation coordinated move to make cheaper dollars available globally seems aimed initially at European banks. Like it or not, it shows a willingness to do what private investors won’t. If politicians show similar unity, they could win the standoff with markets over the euro.
China won’t be Asia’s importer of last resort 25 Nov 2011 Slower manufacturing in the second-largest economy is bad news for other Asian exporters like Japan and Korea. They’re counting on China as U.S. and European demand ebbs. But at least a fifth of China’s imports go to making exports, so China may not prove the hedge they hope.
Collapse not yet likely for battered Olympus 11 Nov 2011 The scandal-racked Japanese company could see its shares delisted, and its debt burden is formidable. But its core medical equipment business provides strength. A strike by suppliers, creditors and customers could push Olympus over the edge, but that still looks remote.
Olympus mystery may hinge on M&A accounting 9 Nov 2011 The company hasn’t said how it used takeovers to hide decades of investment losses. Japanese goodwill accounting might provide a way, by allowing companies to pay big takeover premiums and advisory fees and write them down over time. It’s time Japan closed this loophole.
Olympus casts shadow over corporate Japan 8 Nov 2011 The Japanese group admitted covering up investment losses for 20 years. That could spell fines and even jail sentences. But Olympus isn’t the only company that lacked necessary checks and balances. Its listed peers may now need to prove that shady accounting wasn’t catching.
Olympus investors price in a worst-case scenario 8 Nov 2011 Shares in the Japanese company have fallen 70 percent as gruesome news of misdeeds in deals has emerged. But assuming the core business is viable – and Olympus escapes giant penalties – significant value may lie beneath the mess. Only the bold will be tempted, though.
Japan Inc’s earnings problems are home grown 7 Nov 2011 Honda, Panasonic and Sony all reported grim quarterly earnings. Weak global demand, a strong yen and natural disasters are partly to blame. But they underscore deeper problems caused by domestic policies and Japanese exporters’ long-standing neglect of profit margins.
Tough markets prompt Nomura soul-searching 1 Nov 2011 After a $589 million quarterly loss, the Japanese group is shrinking its investment bank. It’s not alone. But unlike peers, Nomura was sub-scale to begin with. Without a sustained market recovery, it is hard to see how Nomura’s global ambitions can survive.
Japan acts alone in global financial mess 31 Oct 2011 Monday’s unilateral effort to keep the yen from rising will probably work as well as the last one – not very much. Tokyo can’t easily resist the pressure from foreigners fleeing troubled currencies. The G20 could move the world towards financial balance, but won’t try hard soon.
Boardroom rejig still leaves Olympus adrift 26 Oct 2011 The Japanese camera-maker, racked by accusations from its ousted CEO, has sidelined its 70-year-old chairman. But Kikukawa will stay on the board, along with 13 other former Olympus managers. Shareholders need to call for new blood to put the rudderless company back on course.
Olympus scandal wakens Japan’s sleeping investors 21 Oct 2011 Nippon Life has joined foreign investors asking the company to clear up accusations by its ousted CEO. Growing outlays for Japan’s aging society are turning once passive insurers into activist shareholders. If only its banks, who are even bigger investors, would get on board.
Olympus’s M&A moves went from unorthodox to mad 21 Oct 2011 The Japanese firm’s merger misadventure started oddly and went downhill. Deals don’t always require big banks or cash fees. But Olympus seemingly ceded most of a UK target’s future profits to a mystery adviser, resulting in the biggest M&A fee in history. At best, that’s crazy.
Olympus investors need urgent answers 19 Oct 2011 Accusations by its ousted CEO have them wondering: why did the Japanese company pay two M&A advisers a 35 percent commission in 2008? The fear is that Olympus could be forced to take big writedowns, or even delist. Until the air is cleared, its shares will continue to founder.
Olympus fiasco strengthens case for Japan reform 17 Oct 2011 Naming foreigner Michael Woodford to run the company was part of a grudging shuffle toward accountability. Firing him six months later suggests an allergic reaction. It’s a setback for Olympus, whose shares have plunged, but will only increase the heat on Japan’s conservative boards.
Japan’s new funding plan is hopeful, yet remedial 16 Sep 2011 The new government’s plans to finance rebuilding by hiking taxes and selling stakes in companies like Japan Tobacco are welcome. But details of how the revenue will be raised are worryingly vague. Given the political hurdles ahead, Japan can’t afford to re-learn old lessons.