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from Breakingviews:

An Abenomics lesson on politics for Uncle Sam

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

Two years ago, there was no gloomier place than Japan. The country was recovering from the horrific devastation of the Fukushima earthquake and tsunami. Fearful of radiation poisoning, Tokyoites were purchasing Geiger counters and eschewing vegetables. The government was a thicket of finger-pointing, evasion and paralysis.

Things couldn't be more different today. Just this week, Prime Minister Shinzo Abe forged ahead with the kind of measure that in any normal democracy would provoke howls of protest: a 60 percent hike in consumption taxes.

Now, contrast Tokyo's politics with those of the country that effectively drafted the Japanese constitution: The United States. An impasse over whether to pay the nation's bills – between Republicans and Democrats, the House and the Senate - has plunged the nation into such dysfunction the government has shut down, sending 800,000 federal workers home and forcing parks like the Statue of Liberty to padlock their gates.

from Breakingviews:

Bond-buying helps Japan’s banks more than economy

By Andy Mukherjee

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

The Bank of Japan’s bond-buying is proving to be more of a blessing for the country’s lenders than for the deflation-stricken economy. The central bank’s spending spree has allowed lenders to offload 12 percent of their holdings of government debt this year.

from Breakingviews:

M&A diplomacy features in $29 bln tech deal

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

Applied Materials and Tokyo Electron have showcased M&A diplomacy in their $29 billion deal. The U.S.-based producer of semiconductor-making equipment heeded local sensitivities and ceded governance duties in the proposed acquisition of its Japanese rival. At the same time, most of the financial benefits will accrue to its own shareholders. The merger is a delicate inauguration of Abenomics-style corporate reform.

from Breakingviews:

Japan’s bond market calm hides fiscal disquiet

By Andy Mukherjee

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

The calm in the Japanese government bond market is hiding growing fiscal disquiet. After briefly shooting up to 1 percent in May, yields on 10-year JGBs are back down to 0.74 percent, even as inflation expectations have firmed up. This Zen-like state of affairs is all the more striking considering that interest rates are increasing across the Western world as investors anticipate an end to the cheap money of the post-financial crisis era.

from Breakingviews:

Suntory pays up to quench thirst for Japan escape

By Una Galani

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

Suntory is paying up to quench its thirst for overseas growth. The newly-listed Japanese firm wants to double its sales by 2020, partly through foreign acquisitions. To help achieve that goal, it’s paying GlaxoSmithKline 1.4 billion pounds ($2.1 billion) in cash for British brands Lucozade and Ribena. That’s a big premium to reduce its exposure to a tough domestic market.

from Breakingviews:

Japan index: Wages and consumption stymie recovery

By Andy Mukherjee

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

Firmer prices, stronger bank lending and higher manufacturing output helped the Breakingviews Abenomics Index reverse half the previous month’s decline in July. But unless wages and spending rise, Prime Minister Shinzo Abe will struggle to win his war against deflation.

from Breakingviews:

Japan’s Olympic boost will be mostly psychological

By Peter Thal Larsen

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

Japan’s Olympic boost will be mostly psychological rather than financial. Tokyo’s victory in the race to host the 2020 summer Games will help Prime Minister Shinzo Abe’s efforts to rebuild the country’s confidence. But expectations that an Olympian investment spree will lift Japan out of deflation are as misplaced as fears that it will trigger a debt crisis.

from Breakingviews:

The lessons for China from Japan’s lost decade

By Andy Mukherjee

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

Is China condemned to suffer a Japanese “lost decade”? Its economy today has three big similarities with Japan in the late 1980s: High and rising debt, diminishing export competitiveness and an ageing society. China can avoid slipping into Japan’s deflationary hole, but only if it learns from Tokyo’s failure to cleanse its banking system.

from Photographers' Blog:

The quiet of a nuclear beach

Iwaki, Japan

By Issei Kato

“I have to arrive at the beach before it starts raining.” This is what I was thinking as I drove up to the Fukushima coast, less than 35 km (21 miles) from the crippled nuclear plant. Because the weather forecast said it was going to rain in the region, I had packed a waterproof kit for my camera and beach gear so I could be ready to photograph the beach.

Iwaki city, located just 40 km (24 miles) south of the plant, had declared nearby Yotsukura beach open to the public this summer, the first time since a massive earthquake and tsunami triggered a nuclear crisis at Tokyo Electric Power’s Fukushima Daiichi nuclear plant. But, during the period between July 15 and August 18, when the beach was open to the public, the operator of the plant admitted that contaminated water was leaking out to the ocean. Government officials said 300 tonnes of radioactive water was probably flowing out to the sea every day.

from MacroScope:

Does less QE from the Fed necessarily mean a stronger dollar?

Based on the latest U.S. Treasury flows data, it may be time to ditch the textbook theory that says less monetary stimulus means a stronger currency - at least for now.

The problem may just be that the theory doesn't fully account for the situation when your largest creditors - and they are very large - are trying to beat you to the market.

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