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from Breakingviews:

Deflation flu could leave Asia feeling very sick

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Deflation is entering Asia through the back door. Producer prices are sliding across the region - falling 8.5 percent even in the Philippines, where GDP grew 7.8 percent in the first quarter. Cheaper commodities are partly to blame, but the main culprit is sluggish demand from the United States. If companies can’t make up the difference, they may struggle to repay growing debts.

Robust local demand, turbocharged by cheap global money, is showing up in frothy real estate prices from Bangkok and Jakarta to Singapore and Hong Kong. But domestic demand is not a major driver for manufacturers in these export-dependent economies. U.S. consumers still largely decide what Asian producers are paid.

And despite all the money-printing since the 2008 financial crisis, Americans’ consumption remains weak.

from Global Investing:

When Japan was an emerging country

Recent wild swings in Japan's financial markets -- stocks, bonds and the yen -- make Japan look almost like an emerging country.

Back in the 19th century, Japan was an emerging country, with its feudal society based largely on farming.

from Breakingviews:

SoftBank’s bump for Sprint isn’t a knock-out

By Peter Thal Larsen

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

SoftBank’s raised bid for Sprint Nextel is no knock-out blow. The Japanese group has tweaked its offer for a controlling stake in the U.S. telco to give the target’s shareholders more value. But Sprint shareholders would retain a stake in a Sprint that has more debt than first envisaged. That erodes SoftBank’s key advantage as it seeks to combat a rival bid from leveraged counterbidder Dish Network.

from Breakingviews:

Bond jitters shouldn’t delay Japan pension reform

By Andy Mukherjee

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

By reforming Japan’s public pension system, Prime Minister Shinzo Abe is taking a calculated risk. Asking state funds to buy fewer government bonds may look like an own goal at a time when the central bank is struggling to control yields. But the payoff to both the government and Japan’s fast-ageing society could be worth it.

from Breakingviews:

Japan e-book: Abe’s Economic Experiment

By Peter Thal Larsen

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Japan’s prime minister has electrified investors with his three-pronged strategy to shock the country out of its economic malaise. Abenomics has profound implications not just for Japan, but for the rest of the world too. Our new book examines the economic phenomenon of the year.

from Breakingviews:

Japan bond market blues: A guide for the perplexed

By Andy Mukherjee

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

The Bank of Japan’s money-printing plan is failing to keep borrowing costs in check. Since the central bank pledged on April 4 to double its holdings of Japanese government bonds in two years, the yield on 10-year government debt has doubled. On May 23, it briefly touched 1 percent.

from Anatole Kaletsky:

What’s behind the spooked stock market?

Strange things have been happening in the world economy and financial markets this week. While that sentence could be written almost any time in the past five years, since the outbreak of the global financial crisis, the strangeness this week has taken a particular form that reveals more than it confuses.

Almost all the economic news recently has been favorable, or at least better than expected. U.S. home values have risen more than at any time since 2006, job losses are down and consumer confidence has been restored to pre-crisis levels. Japan has enjoyed its fastest growth in years, with evidence mounting of stronger consumption and rising wages. Even in Europe, the outlook appears to be improving as policy shifts away from austerity and toward growth, with the European Commission no longer pressing governments to hit their deficit targets. Meanwhile, the European Central Bank hints at the possibility of negative interest rates and other extraordinary stimulus measures. But financial markets have reacted to all this good news by becoming more volatile – panicky, even – than at any time this year.

from Breakingviews:

Blame Japan’s debt on companies, not the state

By Andy Mukherjee

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Japan’s government is up to its neck in debt. That, however, is not because the government has been overly profligate, but because Japanese companies have been deleveraging for a long time. If Prime Minister Shinzo Abe’s policies revive private investment, the government’s track record suggests it will tighten its belt.

from Global Investing:

The only game in town

The extent of the surge to Japan by equity investors is written in sparkly 50-foot-high neon letters by the latest flows data out from Lipper.

We all know that Abenomics has, thus far, cast a spell over markets; the Nikkei is up about 80 percent since the middle of November, when Shinzo Abe first started looking like a bona fide challenger to win power. But it is still startling to see how flows into Japan have dominated investment behaviour.

from Photographers' Blog:

Seaside nuclear power

Omaezaki, Japan

By Toru Hanai

Chubu Electric Power Co.'s Hamaoka Nuclear Power Station in Japan is located at water level next to a beach. It is also widely reported to be one of the world's most dangerous nuclear plants as it sits close to a major fault line - not unlike the one that caused the Fukushima nuclear disaster.

I had an offer of an exclusive tour of Chubu Nuclear Power Station where an 18-meter (60 ft) high and 1.6 km (1 mile) long tsunami defense wall has been built at a cost of $1.3 billion.

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