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Reuters blog archive
from Breakingviews:
New recall narrows Toyota’s recovery window
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It may take just 40 minutes to replace the gizmo responsible for Toyota’s latest embarrassment, but with 7.4 million cars to fix, that’s 565 years of mechanic time. Actually it is neither the first nor the most serious of Toyota’s recent difficulties. But the Japanese automaker’s problems are beginning to look unending.
After battling back to profit after the global crisis in 2009, it was struck with a series of product faults. In early 2011, the devastating earthquake and tsunami crippled production. And violent anti-Japanese demonstrations in China over disputed islands cut its sales there in half last month as patriotic consumers switched to other countries’ cars.
Considering the succession of setbacks, it is testament to Toyota’s strength that it has soldiered on as well as it has. And while the latest product problem is extensive - it affects a broad range of worldwide models and is the largest recall since Ford’s faulty ignitions in 1996 - it is unlikely to sink the company.
from Breakingviews:
China’s IMF boycott undermines quest for clout
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
If China wants a bigger say at the IMF, boycotting the fund’s meeting in Japan is the wrong way to get it. The head of the central bank, Zhou Xiaochuan, withdrew on Oct. 10, amid a territorial dispute between the two countries. Yet the IMF is supposed to be about finance, not border politics. If China doesn’t agree, maybe it isn’t ready for a bigger role.
from Photographers Blog:
Republic of the elderly
By Kim Kyung-hoon
There are several key descriptive phrases to keep in mind when talking about Japan; one obvious to everyone is “Rapidly Aging Society”.
The rise of the elderly population and falling birth rate are no longer surprising news. One in four people in Japan is now over 65 years.
from Breakingviews:
Consumer boycotts won’t decide Sino-Japan fight
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Are consumers China’s secret weapon? Not when it comes to winning its ongoing spat with Japan. Even if some Chinese shoppers are giving Uniqlo and Toyota a miss, history shows that consumer boycotts have at best a short-lived effect. Economic warfare looks reassuringly hard to wage.
from Breakingviews:
Markets sagely dismiss China’s anti-Tokyo tantrums
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Investors aren’t particularly bothered by China’s anti-Tokyo protests. While smashed cars and shuttered factories are worrying, the two countries have more to lose in trade and investment than to gain from tit-for-tat reprisals. Companies that are big in China like Nissan may suffer in the short-term, but Japan Inc. has more to fear from U.S. Federal Reserve chairman Ben Bernanke than from Beijing.
from Photographers Blog:
Where have all the toys come from?
By Kim Kyung-hoon
When you look at the mountain of toys in this picture, you might think that your childhood dream has come true and this is a toy lover’s paradise.
In fact, what seemed to be a child’s dream come true was not a magic spell but “recycling”.
from Breakingviews:
Japan Inc’s earnings tell worrisome global story
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
At first glance Japan Inc’s earnings look dazzling. Operating profits at the country’s four biggest manufacturers quintupled in the latest quarter, relative to same period last year. Growth in the U.S. and a post-tsunami rebound in Japan overwhelmed the drag from weaker economies in Europe and China. But the message is actually more sobering: the buffer from such slow-growth economies is unlikely to last.
from Breakingviews:
Investors may be happy to ride on renovated JAL
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Japan Airlines’ plans to raise roughly $8.5 billion in an IPO may seem a heavy lift amid weak global markets and a perennially limping aviation industry. But big funds will likely clamor for seats on a flight fueled by a mix of government largesse and one of Japan’s most promising turnaround stories.
from Felix Salmon:
The problem of Japan’s household savings
Almost two years ago, in September 2010, the Japanese currency reached an all-time high of just 83 yen to the dollar. The Bank of Japan, shocked into action, brought out the big guns: a massive intervention in the fx market, which immediately sent the currency down more than 3%. And I responded with a blog post headlined "Why Japan’s FX intervention might actually work": the intervention was unsterilized, which meant that the Bank of Japan was essentially printing money. If a central bank prints enough money, the currency will, eventually, fall.
Of course, that didn't happen. A commenter, gpowell, looked into the details of what was going on and discovered that the intervention was only technically unsterilized: in reality, the Ministry of Finance ended up issuing new debt within days to repay the central bank. And so the inevitable happened, and the yen kept on strengthening. It's now hitting new all-time highs around 78 yen to the dollar: the Japanese wish it were back at the 83 level which seemed so unacceptable two years ago. The Bank of Japan's actions are barely making a dent in deflation, let alone weakening the yen.
from Global Investing:
Mrs Watanabe in Istanbul
Japanese mom-and-pop investors' penchant for seeking high-yield investments overseas is well known. Mrs Watanabe (as the canny player of currency and exchange rate arbitrage has come to be known) invests billions of yen overseas every year via so-called uridashi bonds, debt denominated in currencies with high yields. Data shows the lira has suddenly become the red-hot favourite with uridashi investors this year.
In a note entitled Welcome Mrs Watanabe, Barclays analysts estimate $2 billion in lira-based uridashi issuance this year, ahead of old favourite, the Australian dollar.
