When it comes to Japan, political change should translate into long-term profits for global investors.
Barclays PLC (ADR: BCS), the United Kingdom’s fourth-largest bank, may get a $927 million cash infusion from Japan’s Sumitomo Mitsui Financial Group Inc. by the end of the month.
Despite having the lowest overnight rate of the Group of Seven nations, Japan’s central bank unanimously voted today (Friday) to keep its key interest rate steady at 0.5%.
From my vantage point on my recent visit to both China and Japan, the signs are clear.China is coming. And Japan knows it.
The Japanese economy is steadily growing and may have finally “decoupled” from the US, according to a report in The Guardian:
Senior officials say the economy has become much more stable as it has plugged into the booming economies of Asia, exporting everything from consumer goods to machine tools. But not everyone is convinced, with some worried that as Asia slows in response to lower exports to a recession-hit US, Japan’s exports will suffer, as will its consumers, whose spending will be hit by higher fuel prices.
“Japan is cheap in a way that no other developed markets are,” says Merryn Somerset Webb in Money Week.
Japan and the US said they would use the World Trade Organization to overturn European Union tariffs on consumer technology items such as computer screens, multifunctional printers and TV set-top boxes capable of accessing the Internet.
“The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products,” US Trade Representative Susan Schwab said to Thomson Reuters.
Japanese stocks have risen on news that US orders for durable goods rose in April. This from Bloomberg:
Sony Corp., which gets a quarter of its sales from the U.S., sent electronics makers higher, while Canon Inc. jumped the most in a month. Mazda Motor Corp., which exports 80 percent of domestic production, led a gain by carmakers after the yen weakened against the dollar.
There’s an incredible story taking place in Asia.
At the launch party for the Spectator’s business magazine, a banker introduced himself to me. He’d been wanting to meet me for ages, he said.
Lower global growth rates and rising energy and commodity costs are taking their toll on the Japan, which the IMF forecasts will grow in 2008 at its slowest rate in five years.
However, the Financial Times reports that the country’s export links to emerging markets are likely to shield it from the worst effects of the global recession:
Exports, which have been a big driver of growth in Japan’s economic recovery, have been surprisingly resilient in the face of a slowdown in the US