Toyota to post Q1 operating profit of $1.1 billion: Nikkei

July 26, 2010 By Leave a Comment

(Reuters) – Toyota Motor Corp (7203.T) is likely to have secured a group operating profit of about 100 billion yen ($1.1 billion) in April-June, thanks to solid sales and a sharp recovery from the previous year’s loss, the Nikkei business daily said on Sunday.

But the automaker, which had a loss of 194.8 billion yen in the same period last year, is likely to keep its annual profit forecast unchanged due to uncertainty over the European and U.S. economies, the report also said, without citing sources.

Toyota, the world’s biggest automaker, has been plagued since last September by a crisis over safety and equipment that has led to the recall of more than 10 million vehicles globally.

Toyota and rival Honda Motor (7267.T) have also been hit by strikes in the past few months at Chinese plants providing parts. Both makers suspended production in China to varying degrees due to supply shortages caused by strikes.

But strong sales in emerging or resource-rich countries, such as in the Middle East, helped Toyota shake off negative factors, including a stronger yen.

Toyota, which competes with global peers such as General Motors GM.UL or Ford Motor (F.N), also saw strong sales of its Prius hybrid model in Japan, the Nikkei report said.

In the three months to June, the Toyota Group — including Hino Motors Ltd (7205.T) and Daihatsu Motor Co (7262.T) — sold between 1.8 million and 1.9 million vehicles, about 30 percent more than a year earlier, the report said.

Toyota’s sales are also picking up in North America after being hurt by the mass recalls, the paper said.

The automaker’s sales could lose some steam later in the year, however, as the Japanese government ends subsidies on purchasing so-called eco cars in September, the paper said.

Toyota officials were not immediately available for comment.

Toyota projects an operating profit of 280 billion yen for the current fiscal year to March, up 90 percent from the previous year.

(Reporting by Mariko Katsumura; Editing by Ron Popeski)

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Toyota to post Q1 operating profit Y100 bln-Nikkei

July 26, 2010 By Leave a Comment

July 25 (Reuters) – Toyota Motor Corp (7203.T) is likely to have secured a group operating profit of about 100 billion yen ($1.1 billion) in April-June, thanks to solid sales and a sharp recovery from the previous year’s loss, the Nikkei business daily said on Sunday.

But the automaker, which had a loss of 194.8 billion yen in the same period last year, is likely to keep its annual profit forecast unchanged due to uncertainty over the European and U.S. economies, the report also said, without citing sources.

Toyota, the world’s biggest automaker, has been plagued since last September by a crisis over safety and equipment that has led to the recall of more than 10 million vehicles globally.

Toyota and rival Honda Motor (7267.T) have also been hit by strikes in the past few months at Chinese plants providing parts. Both makers suspended production in China to varying degrees due to supply shortages caused by strikes.

But strong sales in emerging or resource-rich countries, such as in the Middle East, helped Toyota shake off negative factors, including a stronger yen.

Toyota, which competes with global peers such as General Motors [GM.UL] or Ford Motor (F.N), also saw strong sales of its Prius hybrid model in Japan, the Nikkei report said.

In the three months to June, the Toyota Group — including Hino Motors Ltd (7205.T) and Daihatsu Motor Co (7262.T) — sold between 1.8 million and 1.9 million vehicles, about 30 percent more than a year earlier, the report said.

Toyota’s sales are also picking up in North America after being hurt by the mass recalls, the paper said.

The automaker’s sales could lose some steam later in the year, however, as the Japanese government ends subsidies on purchasing so-called eco cars in September, the paper said.

Toyota officials were not immediately available for comment.

Toyota projects an operating profit of 280 billion yen for the current fiscal year to March, up 90 percent from the previous year. (Reporting by Mariko Katsumura; Editing by Ron Popeski)

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India cabinet approves share sale in Power Grid

July 23, 2010 By Leave a Comment

July 22 (Reuters) – India’s cabinet approved share sale in the state-run power transmission utility Power Grid Corp (PGRD.BO) on Thursday, a government spokeswoman said.

The Indian government plans to raise roughly $8.5 billion from share sales in state-run firms in the current fiscal year that ends in March 2011. [ID:nSGE64R0BK]

($1=47.3 rupees)

(Reporting by Nigam Prusty; editing by Malini Menon)

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Kuwait’s Alafco Q3 net profit down 47 pct

July 19, 2010 By Leave a Comment

KUWAIT, July 18 (Reuters) – Kuwait’s Aviation Lease and Finance Co (ALAF.KW) (Alafco) posted on Sunday a 47 percent fall in net profit in the third quarter of its fiscal year.

Net income in the three months to June 30 fell to 2.74 million dinars ($9.42 million), from 5.13 million dinars in the same period a year earlier, the company said in a statement to the bourse.

The aircraft leasing company made a profit of 7.76 million dinars in the first nine months of its fiscal year, down 6.6 percent from a year earlier.

Alafco said nine-month earnings per share fell to 10.45 fils, from 11.19 fils a year earlier. There are 1,000 fils to the dinar.

The company’s fiscal year starts in October.

Chairman Ahmad Alzabin said in a statement that last year’s higher nine-month results were boosted by the sale of assets.

He said outlook for the current fiscal year that ends on September 30 was better than last year’s, without elaborating.

The company leases Airbus (EAD.PA) and Boeing (BA.N) aircraft to airlines in Europe, Asia, Africa and the Middle East.

The company secured $350 million in financing from banks and other financing institutions in the nine-month period, he said.

Alafco is targeting a fleet of 59 owned and managed aircraft by the end of the current year, Alzabin said, without giving a comparative figure.

($1=0.2910 dinar) (Reporting by Diana Elias; Editing by Firouz Sedarat)

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TEXT-BOJ Statement on Monetary Policy

July 16, 2010 By Leave a Comment

July 15 (Reuters) – The Bank of Japan revised up its economic forecast for the current fiscal year on Thursday but reiterated that it will keep monetary policy easy, with deflation likely to persist at least until early 2011.

The central bank kept interest rates at 0.1 percent and held off on new policy initiatives as widely expected, in a unanimous vote.

Following is the text of the BOJ’s statement issued after the meeting:

1. At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:

The Bank of Japan will encourage the uncollateralized overnight call rate to remain at around 0.1 percent.

2. Japan’s economy shows further signs of a moderate recovery, induced by improvement in overseas economic conditions. Exports and production have been increasing mainly due to high growth in emerging economies and increased global demand for IT-related goods. Corporate profits and business sentiment have been improving, and business fixed investment is showing signs of picking up. The employment and income situation has remained severe, but the degree of severity has eased somewhat. In these circumstances, private consumption has been generally picking up. Public investment is declining. Meanwhile, financial conditions have continued to show signs of easing. The CPI (excluding fresh food) is declining on a year-on-year basis due to the substantial slack in the economy as a whole, but the slowing trend in the pace of decline has continued.

3. The Bank’s baseline scenario projects that the economy is likely to be on a recovery trend. With regard to prices, based on the assumption that medium- to long-term inflation expectations remain stable, the year-on-year rate of decline in the CPI (excluding fresh food) is expected to slow as the aggregate supply and demand balance improves gradually.

4. Compared with the projections presented in the April 2010 Outlook/or Economic Activity and Prices, growth prospects will likely be higher for fiscal 2010 mainly due to acceleration of growth in emerging economies, but remain broadly unchanged for fiscal 2011. With regard to prices, the year-on-year rates of change in the domestic corporate goods price index and the CPI (excluding fresh food) are expected to be broadly in line with the projections presented in April.

5. With regard to economic activity, there are some upside risks such as even faster growth in emerging and commodity-exporting economies. On the other hand, there are also downside risks such as those related to international financial developments. In this regard, attention should be paid to the effects of developments in fiscal and financial conditions in some European economies on international finance and the global economy. With regard to prices, there is a possibility that inflation will rise more than expected due to a rise in commodity prices brought about by higher growth rates in emerging and commodity-exporting economies, while there is also a risk that the rate of inflation might decline due, for example, to a decline in medium- to long-term inflation expectations.

6. The Bank recognizes that Japan’s economy faces the critical challenge of overcoming deflation and returning to a sustainable growth path with price stability. To this end, the Bank will continue to consistently make contributions as central bank. In the conduct of monetary policy, the Bank will aim to maintain the extremely accommodative financial environment.

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India adviser:FY11 industrial output to be at FY10 level

July 14, 2010 By Leave a Comment

July 13 (Reuters) – India’s industrial output in the current fiscal year INIPC=ECI will be similar to last fiscal’s 10.4 percent growth, C. Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, said on Tuesday.

He also said the central bank would need to act if double-digit inflation persists.

“If the inflation level persists at double-digit level for several months together, some action on demand side is needed. So the action on the part of RBI (Reserve Bank of India) is required.”

(Reporting by C.J. Kuncheria; editing by Malini Menon)

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FACTBOX-Policymakers’ key quotes on Japan fiscal policy

June 15, 2010 By Leave a Comment

June 14 (Reuters) – Japan’s new Prime Minister Naoto Kan has vowed to tackle the country’s huge public debt, but his commitment to fiscal austerity could be tested with the economic recovery still fragile.

Bonds

Kan, in his first policy speech, warned that the country risked defaulting on its borrowing if it failed to rein in its massive public debt. [ID:nLDE65A052]

He has spoken in favour of fiscal discipline and during his five-month stint as finance minister pledged to cap new bond issuance for the fiscal year from next April at the record 44.3 trillion yen ($483 billion) set for the current fiscal year’s budget.

Following are key quotes from Kan and his ministers:

KAN

June 11, in first policy speech in parliament:

“We cannot sustain public finance that overly relies on issuing bonds.

“As we can see in the euro zone confusion that started from Greece, there is a risk of default if the growing public debt is neglected and if trust is lost in the bond market.”

June 8, in news conference:

“Having weak finances means we can’t make bold moves. Restoring our fiscal health is indispensable for economic growth.

“If we keep up the current pace of spending for the next three to four years, the ratio of public debt to GDP will go up to over 200 percent in a few years.

“In that sense, this problem is the biggest issue this country must tackle … We need bipartisan debate now on what really needs to be done to restore finances, in terms of the extent and time.

“If we just raise taxes to pay back debt, then this would accelerate deflation. Spending must be allocated to areas that lead to economic growth.

“The reason why Japan’s finances have worsened this much, simply put, is that over the past 20 years, because we couldn’t raise taxes, we tried to make up for this by borrowing.”

May 17, in parliament:

“Limiting bond issuance doesn’t mean I am saying we will shrink fiscal spending …

“Japan is in deflation, so we need a certain amount of fiscal spending to keep money circulating.” [ID:nTOE64G063]

May 11, in news conference:

“Markets are becoming sensitive to sovereign risk, so in order to prevent this from happening we need to make as much effort as possible so that (new government bond) issuance does not exceed 44.3 trillion yen.”

May 3, in news conference:

“We have been making efforts to draw up a fiscal reform bill by the end of April but further coordination is needed. I have been told by the prime minister to proceed carefully on the matter.”

FINANCE MINISTER YOSHIHIKO NODA

June 12, in television programme:

“It’s a very severe situation,” Noda said, referring to the country’s public debt that is nearly twice the size of its GDP.

Noda said the government would consider which of the spending plans pledged earlier by the Democratic Party to prioritise.

“We can’t change everything (pledged by the party) all of a sudden. But we’ll do it steadily.”

June 9, in interview:

“Long-term interest rates remain stable at low levels at the moment … but we cannot be content with this forever. We must conduct debt management with a sense of crisis while communicating with markets to have JGBs smoothly absorbed …

He pledged that Japan will report its fiscal reform plans to the June 26-27 meetings of Group of 20 leaders in Toronto so as to win international trust in its efforts to fix its debt woes.

“Our debt stock stands at the worst levels in the world, so we must show a time frame in reducing the debt pile and win an evaluation that Japan takes heed of the need for fiscal discipline.”

June 8, in news conference on assuming the post:

“Prime Minister Kan has recently said he wants to keep government bond issuance under 44.3 trillion yen and I would like to make the utmost efforts in that direction.”

May 17, in news conference:

“I think the Japanese people understand well the dangers of losing fiscal discipline when they look at news about Greece’s crisis. It is important to show a path to fiscal reform with the mid-term fiscal framework and secure the funding to implement our campaign pledges.

“This is not just what the markets or the Ministry of Finance want, this is also basically what the Japanese people want.

“Up until now, our rule has been that we can’t enact a policy if we don’t have the funding. Basically, I want to continue with this approach. In that regard, Kan’s target of 44.3 trillion yen is an appropriate figure.”

April 5, in news conference:

Asked if the government needed to compile an extra budget:

“The economy is steadily recovering. The government’s role is to monitor the economic situation and respond flexibly when needed. In terms of sequencing, the government would use budget reserves first.”

NATIONAL STRATEGY MINISTER SATOSHI ARAI

June 11, in news conference:

“We want to complete the growth strategy and the medium-term fiscal framework sometime June 18-22, as the fiscal framework will become the basis for discussions at the G20 summit …

“We’re still working on the framework so I cannot say much but I think it should be created based on the pay-as-you-go rule (which would keep spending in line with tax revenues) and the promise to limit bond issuance for next fiscal year at 44.3 trillion yen.”

June 8, at news conference after assuming the post:

Arai said he intends to compile the medium-term fiscal framework and long-term fiscal management strategy by June 24 before Kan leaves for the Toronto G20 summit.

“It would be difficult to show specific tax reform plans in the fiscal framework.” (Reporting by Rie Ishiguro and Leika Kihara; Editing by Chris Gallagher)

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UK unveils 1st round of cuts; much more to come

May 26, 2010 By Leave a Comment

British Finance Minister George Osborne detailed 6.2 billion pounds ($8.92 billion) of spending cuts on Monday in the latest bout of EU belt-tightening, warning much worse lay ahead in an emergency budget next month.

Analysts said the cuts, which were largely as expected, were a useful downpayment on tackling the record budget deficit but would be dwarfed by additional austerity measures that would be needed to safeguard Britain’s triple-A credit rating.

Osborne’s deputy David Laws warned the cuts were intended to “send a shockwave through government departments”, and unions said they would hit services, damage the economy and put thousands of jobs at risk.

Given some breathing room by debt figures for 2009/10 that undercut estimates, Osborne said the new Conservative/Liberal Democrat coalition government, in office for less than two weeks, would not shirk from its top priority of cutting the deficit, running at close to 11 percent of GDP.

Britain’s announcement comes on the heels of emergency austerity measures in other European Union countries weighed down by hefty deficits, including Spain and Portugal, as the region’s policymakers look to prevent a debt crisis from spreading beyond Greece. Italy’s cabinet meets to approved deficit-cutting measures on Tuesday.

Debt servicing costs in the euro zone periphery states have ballooned this year, while they have held at relatively low levels in the UK. UK government bonds rose by midsession on Monday as traders welcomed news of Osborne’s breakdown of where the cuts would fall, with the June gilt future rising 24 ticks to 120.21.

Sterling was mixed, rising against the euro but losing ground against the dollar.

“This is the first time this government has announced difficult decisions on spending. It will not be the last,” Osborne said at a news conference flanked by Laws.

Osborne’s Conservative Party had pledged before the May 6 election to start spending cuts in the current fiscal year. The Lib Dems had said such a move would endanger the recovery but have now signed up to the immediate cuts.

“This action is designed to send a shock-wave through Government departments, to focus ministers and civil servants on whether spending in these areas is really a priority in the difficult times we are now facing,” said Laws.”

“… The years of public sector plenty are over. But the more decisively we act, the more quickly and strongly we can come through these tough times.”

END TO WASTE

In a concession to the Lib Dems, 500 million pounds of the 6.2 billion pounds in reductions will be reinvested in further education and social housing.

But the rest would be used to bring down the deficit. Government advisory bodies — known as “quangos” — would lose 513 million pounds in funding. There would be a hiring freeze across the civil service and almost all departments would have to find savings.

The business ministry, for example, will have its budget cut by more 800 million pounds.

“The new government deserves credit for identifying these cuts on a department-by-department basis in the space of less than two weeks,” said Hetal Mehta, senior economic advisor to the Ernst & Young ITEM Club.

“But we must remember that 6 billion pounds is still a drop in the ocean compared with the scale of tightening that will be required over the course of the parliament. The emergency Budget and the subsequent Comprehensive Spending Review remain the crucial junctures for assessing how credible the deficit reduction programme will be.”

While the task ahead is clearly massive, figures released last week suggested that at least the worst may be over for public finances, with tax receipts up sharply.

Borrowing for 2009/10 was revised lower by 7.5 billion pounds. Excluding financial sector interventions, it stood at 156.1 billion pounds, some 10 billion pounds lower than predicted in the budget in March.

But there is no escaping the fact government spending will have to come down significantly, putting the coalition on a collision course with increasingly militant unions.

“We do not accept that huge spending cuts are necessary or desirable, and we do not believe it is credible for the government to say it can protect public sector jobs and services while taking the axe to departments in this way,” said Public and Commercial Services Union general secretary Mark Serwotka.

Bank of England Monetary Policy Committee member Kate Barker said she thought extra fiscal tightening would act as a headwind to growth but said that markets might take fright if nothing was done to bring down the deficit.

“So it is very important that the … (June 22 budget) is something which is going to avoid further rises in gilt yields. And this tells us that fiscal policy faces some really very difficult choices,” Barker told the Financial Times in an interview published on Monday.

(Additional reporting by Estelle Shirbon, Fiona Shaikh, David Milliken, Peter Griffiths and Kylie MacLellan; editing by John Stonestreet)

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Wrong policies of government responsible for price rise: BJP

April 20, 2010 By Leave a Comment

Mumbai, Apr 19 (ANI): Bharatiya Janata Party President Nitin Gadkari has said that the wrong economic policies of Central Government is responsible for the price rise.

“The basic problem which our country is facing, it is price rise, inflation, unemployment and farmers” suicides. And, basically the reason for all these problems, is the wrong economic policies and bad governance of Congress party,” Gadkari said at a news conference here on Sunday.

Gadkari said the ruling regime was anti-poor and hurting the common man.
Rising inflation has put the Congress-led ruling coalition on the back foot, forcing it to defer key economic reforms, including market-determined fuel prices, as it takes on an emboldened opposition in parliament.

India, the world”s second-fastest growing major economy, is expected by the government to grow 8.5 percent in the current fiscal year, which ends March 2011, and nine percent the next year.

India”s annual inflation was less than expected in March as food and manufacturing price pressures eased, suggesting the Reserve Bank of India (RBI) will opt for a 25 basis-point rate rise next week rather than a more aggressive move. (ANI)

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Wrong policies of government responsible for price rise: BJP

April 19, 2010 By Leave a Comment

Mumbai, Apr 19 (ANI): Bharatiya Janata Party President Nitin Gadkari has said that the wrong economic policies of Central Government is responsible for the price rise.

“The basic problem which our country is facing, it is price rise, inflation, unemployment and farmers” suicides. And, basically the reason for all these problems, is the wrong economic policies and bad governance of Congress party,” Gadkari said at a news conference here on Sunday.

Gadkari said the ruling regime was anti-poor and hurting the common man.
Rising inflation has put the Congress-led ruling coalition on the back foot, forcing it to defer key economic reforms, including market-determined fuel prices, as it takes on an emboldened opposition in parliament.

India, the world”s second-fastest growing major economy, is expected by the government to grow 8.5 percent in the current fiscal year, which ends March 2011, and nine percent the next year.

India”s annual inflation was less than expected in March as food and manufacturing price pressures eased, suggesting the Reserve Bank of India (RBI) will opt for a 25 basis-point rate rise next week rather than a more aggressive move. (ANI)

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Now, it’s US’ turn to do ‘something extraordinary’: Qureshi

March 31, 2010 By Leave a Comment

Islamabad, Mar.31 (ANI): Pakistan Foreign Minister Shah Mehmood Qureshi has said that the US has acknowledged Islamabad’s actions in the ‘war on terror’, and it was now Washington’s turn to do ‘something extraordinary’.

Interacting with media persons on the recent strategic talks between Pakistan and the US, Qureshi said the relationship between both countries has improved greatly over the past few years, which is evident from the enhanced level of interaction.

“You have to see the basic difference between the past and the present meetings. The level of interaction has been upgraded. You can see the level of participation. There are specifics and by the end of April, we will be delivered a big sum and by the end of current fiscal year,” The News quoted Qureshi, as saying.

He said the White House has been hesitant in offering Islamabad the equipments needed to fight against extremists, but the situation has changed as it has now not only agreed to fulfil Pakistan’s requirements but also to fast track the process.

“Earlier, the US administration was not serious in giving us assistance. But, during the recent strategic talks it was agreed that Pakistan also needs economic assistance. We presented them a dossier of demands to tell them what we need,” Qureshi said. (ANI)

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US House of Representatives approves 1.5 billion dollar aid for Pakistan

July 10, 2009 By Leave a Comment

Washington, July 10 (ANI): The US House of Representatives has approved an aid bill authorizing the 1.519 billion dollars being given to Pakistan as assistance during the current fiscal year.

Similarly, the Senate Appropriations Committee also approved its own version of the bill which would provide Pakistan 1.57 billion dollars in aid in 2010, The Nation reports.

However, before sending the final bill to President Obama for approval, the differences in both the versions of the bill would need to be sorted out.

According to the House bill, Afghanistan will get 2.695 billion dollars in assistance during 2010.

The Foreign Operations Appropriations bill also includes an extra allotment of 830 million dollars for Pakistan, Afghanistan, Iraq and other countries of the world to provide relief and assistance during natural calamities.

The fund is also meant to be used for rehabilitation of displaced people in these countries. (ANI)

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Pioneer to raise 25 million dollars in fresh capital from Honda

May 3, 2009 By Leave a Comment

Tokyo – Pioneer Corp plans to raise 2.5 billion yen (25.85 million dollars) in fresh capital from one of its business partners, Honda Motor Co, the firm said Tuesday. Honda will pay 170 yen for each of Pioneer’s 14.7 million new shares and to become the second-largest shareholder with a 6.54-per-cent stake after Sharp Corp, according to Japan’s business daily The Nikkei.

The Japanese electronics maker aims to boost production of car-electronics devices, Pioneer said, adding that it needs to raise a total of about 40 billion yen to implement its management plans including business restructuring.

Pioneer expects a net loss of 129 billion yen and an operating loss of 55 billion yen for the current fiscal year. (dpa)

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Honda’s net profit dives 77.2 per cent for fiscal 2008

May 3, 2009 By Leave a Comment

Tokyo – Honda Motor Co reported Tuesday its net profit plunged 77.2 per cent in fiscal 2008 that ended March 31, to 137 billion yen (1.4 billion dollars) as it suffered from the yen’s surge and a sales decline caused by the global economic downturn. Japan’s second-largest automaker saw operating profit nosedive 80.1 per cent to 189.6 billion yen because of sales declines, increased raw material costs and a stronger yen, the company said.

Sales for the year dropped 16.6 per cent to 10.01 trillion yen from the previous fiscal year.

Overall car sales fell 10.4 per cent in fiscal 2008 to 3.5 million units from the previous year. Overseas sales were down 10.5 per cent to 3 million units due mainly to sales drops in North America, while domestic sales were down by 9.6 per cent to 556,000 units.

For the current fiscal year that began April 1, Honda expected net profit of 40 billion yen, operating income of 10 billion yen and sales of 8.37 trillion yen. (dpa)

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Obama Administration seeks wartime authority for military commanders in dealing with Pak

May 3, 2009 By Leave a Comment

Washington, May 2 (ANI):The Obama administration is pushing for a new proposal which would give the US Central Command (CENTCOM) a wartime authority to deal with Pakistan.

The new proposal, if accepted by the US Congress, would give the military commanders the same total authority that they enjoy in Iraq and Afghanistan’s war zones.

It would also enable the CENTCOM to surpass the State Department and other US Departments while taking decisions about the providing any military assistance to Pakistan.

According to the Dawn, US Secretary of Defence Robert Gates recently revealed the blueprint of the new strategy during a congressional hearing, and asked the Senators to approve the proposed military aid to Pakistan with a sense of wartime urgency.

The programme would also enable CENTCOM chief General David Petraeus to control all the military funds for Pakistan that the US has earmarked for counterinsurgency training and for providing sophisticated equipments.

The United States is planning to provide 400 million dollars to Pakistan in the current fiscal year itself. The Obama Administration is seeking to provide Islamabad a total of three billion dollars over the next five years in aid. (ANI)

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Sharp incurs net loss of 1.3 billion dollars in fiscal year 2008

May 3, 2009 By Leave a Comment

Tokyo – Sharp Corp incurred a net loss for fiscal 2008 after the company introduced inventory control, cost-reduction measures and structural reforms, it said Monday. The Japanese electronics company reported a net loss of 125.82 billion yen (1.3 billion dollars) the fiscal year that ended March 31, a reversal from the profit of 101.92 billion yen the previous fiscal year.

It also incurred operating losses of 55.48 billion yen, compared to operating profits of 183.69 billion yen the year before. Sales fell 16.7 per cent to 2.85 trillion yen.

The firm attributed its losses to the yen’s surge and harsher price competition, as well as to declining consumption.

For the current fiscal year, Sharp projected a net profit of 3 billion yen, operating profit of 50 billion yen and sales of 2.75 trillion yen.(dpa)

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Japan expects economy to contract 3.3 per cent in fiscal 2009

May 3, 2009 By Leave a Comment

Tokyo – The Japanese government on Monday announced the steepest-ever downward projection of the nation’s economic growth as the world’s second-largest economy suffers its worst recession in postwar history.

The Cabinet Office said the nation’s economy would contract 3.3 per cent for the current fiscal year that began April 1, revising downward from zero growth it predicted in December.

The estimate came at a time Japan’s economy “has been deteriorating at an unprecedented speed,” particularly since the latter half of fiscal 2008, because of exports and production declines as well as weak private consumption, the Cabinet Office said.

For fiscal 2008 that ended March 31, the government expected the economy to have shrunk 3.1 per cent, down from an earlier estimate of a 0.8-per-cent fall.

The government expects the 56.8-trillion-yen (584.87-billion-dollar) stimulus package to increase gross domestic product (GDP) growth by 2.9 percentage points in fiscal 2009.

The government submitted a fiscal 2009 extra budget to finance the stimulus plan to the parliament Monday.

The projections are based on the assumption that Japan’s additional stimulus package would show effect in the economy in the July-September period.

For fiscal 2009, exports were expected to fall 27.6 per cent from the previous year, and capital spending was expected to drop 14.1 per cent. Both are the biggest-ever declines.

Private consumption, which accounts for more than half of Japan’s GDP, was projected to recover to a 0.3-per-cent growth in fiscal 2009 after falling 0.3 per cent in fiscal 2008.

Public investment was also expected to rise 18.6 per cent, the biggest rise since fiscal 1971, thanks to aggressive fiscal spending.

Despite 200,000 jobs to be created with the stimulus package, the government estimated the nation’s jobless rate would rise to 5.2 per cent in the current fiscal year, up from 4.1 per cent in fiscal 2008. (dpa)

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Japan to issue $110 bln bond for stimulus

April 24, 2009 By Leave a Comment

TOKYO (Reuters) – The Japanese government unveiled an extra budget on Tuesday for the fiscal year to March 2010, including bond issuance of around 10.82 trillion yen ($110 billion) to fund a record economic stimulus package.

The extra budget includes spending of around 14.7 trillion yen for the stimulus steps, with issuance of construction bonds worth 7.33 trillion yen and deficit-covering bonds worth around 3.49 trillion yen, the Ministry of Finance said.

The stimulus package was prompted by growing fears of an economic free-fall amid the worst recession since World War Two.

The government plans to cut its economic forecast for the current fiscal year to a 3 percent contraction in real gross domestic product, the Nikkei business daily reported on Tuesday.

In January, the government forecast flat growth for this fiscal year and a 0.8 percent contraction for the year that ended on March 31.

Finance Minister Kaoru Yosano has said the government needs to revise its forecast given a rapid deterioration in the economy due to tumbling exports and cutbacks in production.

The International Monetary Fund said last month that the Japanese economy, the world’s second-largest, will likely suffer a 5.8 percent contraction in calendar 2009 and will continue to shrink in 2010 by 0.2 percent.

Tokyo announced earlier this month a stimulus package of 15.4 trillion yen, with which it hopes to raise the country’s economic activity by about 2 percentage points and create 400,000-500,000 jobs in the current fiscal year.

(Editing by Michael Watson)

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TOPWRAP 1-Hopes fade for speedy recovery, markets stumble

April 23, 2009 By Leave a Comment

Bank of America bad loans jump, stock markets slide

* Toyota to cut global output by 12 pct – paper

* Japan details extra budget, to forecast 3 pct contraction

* Colombia seeks $10.4 bln IMF bailout

* All information points to recession – RBA governor (For full crisis coverage, click [nCRISIS])

By Tomasz Janowski

SINGAPORE, April 21 (Reuters) – Evidence of more pain inflicted by the global financial crisis on banks, manufacturers and whole economies dampened hopes for a speedy recovery and snapped a six-week global stocks rally.

Bank of America (BAC.N) reported a jump in troubled loans, Germany probably sank deeper into recession and Japan’s government is expected to acknowledge that its no-growth forecast for the current fiscal year was too optimistic.

Australia’s economy, too, looks to be contracting, with the central bank governor saying all information pointed to a first recession since 1991. On Monday, Prime Minister Kevin Rudd had acknowledged this was inevitable given the global downturn.

The Japanese finance ministry on Tuesday outlined its additional budget for the year to March 2010 that includes about $110 billion in new bond issues to finance its more than $150 billion economic stimulus package announced earlier this month.

Yet the Nikkei newspaper said the new official forecast will see the world’s second-biggest economy contracting by 3 percent amid the deepest and longest recession since the early 1970s.

The world’s No.1 carmaker Toyota Motor Corp (7203.T) is poised to slash its global production by 12 percent to 6.2 million cars as it struggles with overcapacity, the Yomiuri newspaper reported, a move that could further hit a strained jobs market.

Cautious optimism about corporate earnings and data suggesting the free-fall in global trade and economic activity was slowing have spurred talk of “green shoots” of recovery and buoyed world stocks by nearly a third since early March.

But Bank of America’s warnings drove home the message that improved results from several leading U.S. banks masked persistent underlying problems, raising questions about the sustainability of bank profits. [ID:nLK80222]

The surge in BofA’s bad loan provisions also reminded investors that the world economy still remained firmly in the grip of the worst downturn since the 1930s Great Depression. [ID:nN20380236]

“We continue to face extremely difficult challenges, primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment,” BofA CEO Kenneth Lewis said.

RENEWED WORRIES

The biggest U.S. bank more than doubled its first-quarter profit helped by its takeover of Merrill Lynch, but its shares tumbled 24 percent, dragging world stocks lower and boosting safe-haven bonds as investors spurned riskier assets.

Asian stocks .MIAPJ0000PUS fell 2.6 percent on Tuesday, with Tokyo’s Nikkei .N225 shedding 3.3 percent, tracking similar losses in U.S. and European shares.

“Losses overnight in Wall Street stocks and renewed concerns about the health of U.S. banks are weighing on sentiment today,” said Kim Yong-kyun, an analyst at Daishin Securities in South Korea. [MKTS/GLOB]

After a near-9 percent drop a day earlier, oil prices hovered below $46 a barrel, depressed by a rising U.S. dollar and caution about the pace of recovery and its effect on oil demand. [O/L]

In Europe, Germany’s Bundesbank on Monday said the nation’s recession had “intensified further” from a 2.1 percent contraction in the final quarter of 2008, and Russia’s jobless rate hit an 8-year high in the first quarter. [ID:nLK012202]

In yet another sign of the crisis spreading around the globe, Colombia asked the International Monetary Fund for a $10.4 billion credit line, joining a lengthening queue of nations seeking the lender’s help. [ID:nN20424977]

The ballooning costs of IMF-engineered bailouts prompted a pledge from the Group of 20 of the world’s biggest economies to triple the Fund’s resources to $750 billion. Following up on that pledge, U.S. President Barack Obama proposed a $100 billion loan to the IMF. [ID:nN20427789]

Obama made his proposal in a letter to Democrat and Republican leaders in the Congress, just days before world finance leaders gather in Washington on April 24-25 for IMF and World Bank meetings.

FALSE RALLY?

Trillions of dollars committed by governments to stimulus packages, some signs of life returning to the U.S. housing market and a tentative pick-up in some confidence indicators have spurred optimism that the worst of the crisis might be over.

But the Conference Board’s U.S. index of leading indicators dropped 0.3 percent in March, it said, more than the 0.2 percent economists had expected, pointing to a continuing downturn. [nWEQ000888]

U.S. economist Nouriel Roubini said the recent surge in global equity markets was a false rally because more financial shocks were in store and the U.S. economy remained weak. [ID:nHKG343541]

“This is a bear market rally,” said Roubini, a professor at New York University and chairman of economic research firm RGE Monitor, who had predicted much of the current crisis. (Reporting by Reuters bureaus worldwide, Editing by Ian Geoghegan)

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Protests over, Thailand aims to revive economy

April 15, 2009 By Leave a Comment

(For full coverage of Thailand’s crisis click on [nSP470159])

By Alan Raybould

BANGKOK, April 15 (Reuters) – The Thai government geared for steps to shore up the economy on Wednesday, a day after it brought a halt to violent protests that have further dented confidence in a country already on the brink of recession.

The streets of Bangkok were calm, with troop presence much reduced after die-hard demonstrators were dispersed overnight.

The Financial Times quoted Finance Minister Korn Chatikavanij as saying that Thailand may expand its stimulus package and increase borrowing to boost confidence and deal with the economic costs of political turmoil.

“We were already anticipating revenue shortfalls in the current fiscal year and that shortfall is almost certainly going to be larger now as a result of what happened over the last 72 hours and so we are going to have to make sure we have sufficient fiscal space,” he said in an interview. [nSP71907]

Financial markets were closed for the final day of the three-day Thai new year holiday but will reopen on Thursday. Shares and the baht were expected to come under selling pressure.

Tisco Securities strategist Viwat Techapoonphol expected foreign selling to lop between 3 and 5 percent off the main Thai stock index .SETI, which has failed to join in the rally on other bourses in recent weeks due to the political crisis.

“Selling pressure will come from foreign funds constrained by their policy of not investing in countries where there is a state of emergency in place,” he said.

Markets will open even though the government has extended the holiday to cover the whole week to control the flow of people back into the capital because infrastructure needs to be repaired and some anti-government protesters may still want to fight.

ARREST WARRANTS

Police said arrest warrants had been issued for former Prime Minister Thaksin Shinawatra, the exiled figurehead of the “red shirt” protest movement, and 13 leaders of the United Front for Democracy against Dictatorship (UDD) for violating state of emergency regulations. Four of them were already in custody.

Army spokesman Colonel Sansern Kaewkamnerd said on television late on Tuesday that a few hundred protesters, not wearing their usual red shirts, had gathered at Sanam Luang, an open space near the royal palace, but they had been dispersed without force before midnight.

Police said on Wednesday there was still a police presence in that area, but less than 100 officers.

Prime Minister Abhisit Vejjajiva said on Tuesday that the state of emergency imposed on Bangkok on Sunday would remain for the time being to help the authorities restore order.

Newspapers that had lambasted the prime minister for the collapse of an Asian summit at the weekend after protesters invaded the venue in the resort town of Pattaya, praised his handling of the violence in Bangkok.

Two people died, in skirmishes between locals and “red shirts” according to the authorities, while more than 100 were injured in clashes between soldiers and protesters trying to blockade a major road junction on Monday.

But a three-week occupation of Government House, Abhisit’s office, was ended without force on Tuesday when the Thaksin supporters decided to surrender as hundreds of troops and riot police surrounded them.

“The government … should be commended for their demonstration of restraint in the handling of the rioting and, more importantly, for the judgment in not rushing for a final break-up of the protesters at Government House, even though they had the capability to do so and the legitimacy as well,” the Bangkok Post said in an editorial.

Thailand’s intractable political divide broadly pits royalists, the military and the urban middle-class against the rural poor loyal to Thaksin. (Additional reporting by Apornrath Phoonphongphiphat in Bangkok and Andrew Marshall in Singapore; Editing by John Chalmers)

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