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Japan Business Sentiment Hits Highest Point in Two Years

July 1, 2013 by Leave a Comment

TOKYO — Business sentiment among major manufacturers in Japan is at its highest in more than two years, a closely watched central bank survey showed Monday, in a sign that the economic policies of Prime Minister Shinzo Abe are continuing to lift Japan’s corporate outlook.

The Bank of Japan’s “tankan” survey for the three months through June showed that the headline index for major manufacturers rose to 4 from negative 8 in the previous quarter, the second consecutive quarter of improvement.

The index beat market expectations that it would rise to 3; the reading Monday was the highest since March 2011, and the first positive reading since September that year. It compares with a dismal result of negative 48 four years ago, in the depths of the global economic crisis.

The Nikkei average climbed 1.3 percent to a one-month high after the upbeat tankan, finishing the day at 13,852.50, its third straight session of gains.

The corporate improvement comes six months into Mr. Abe’s bid to jump-start Japan’s economy with a combination of aggressive monetary easing, government stimulus and a package of promised economic changes.

An immediate effect of his policies has been a weaker yen, which has come as a boon to Japan’s exporters by inflating the value of their overseas earnings. Earnings at Toyota and Japan’s other big manufacturers have already gotten a big boost from the tumbling currency.

The tankan also showed improved sentiment in the service sector, with the index for big non-manufacturing companies rising 6 points to 12.

The survey “showed a broad-based improvement of corporate sentiment from March to June, as widely expected,” Masamichi Adachi, a Tokyo-based economist at JPMorgan Securities Japan, said in a note.

The reading fell short of Mr. Adachi’s forecast of 9, however, thanks in part to cautiousness on the part of many manufacturers in assuming that the yen will remain weak in the longer run.

Kyohei Morita, Japan economist for Barclays, wrote in a note that improved business sentiment was in line with expectations and set the stage for strong economic growth for Japan.

“We look for Japan to outpace its G7 peers” in economic growth, he said, referring to the conference of seven industrialized nations. Last month, government figures showed that Japan’s gross domestic product grew at a robust annualized pace of 4.1 percent in the first quarter, by far the fastest clip among the Group of 7.

Economists are now watching to see whether the positive turn in mood at Japan’s big companies will trickle down to Japan’s consumers. On that front, the evidence is mixed.

The tankan measures sentiment by conducting a survey of Japan’s largest companies and subtracting the percentage of respondents who say conditions are negative from those who say they are positive.

Article source: http://www.nytimes.com/2013/07/02/business/global/japan-business-sentiment-hits-highest-point-in-two-years.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

PC Quarterly Sales Plummet, Sharpest Drop on Record

April 10, 2013 by Leave a Comment

The huge drop over a year ago, the steepest since International Data Corp started publishing sales numbers in 1994, mark a new milestone in the apparent decline of the age of the PC as computing goes mobile via tablets and smartphones.

Total worldwide PC sales fell 14 percent to 76.3 million units in the first quarter, IDC said on Wednesday, exceeding its forecast of a 7.7 percent drop. It was the fourth consecutive quarter of year-on-year declines.

That marked the lowest level since the middle of 2009, according to competing data tracker Gartner Inc, which published its own figures showing an 11 percent decline on the same day.

Both firms blamed the sales drop on fading sales of netbooks, the small laptops that have been rendered obsolete by tablets, and more consumer spending going toward smartphones.

“Consumers are migrating content consumption from PCs to other connected devices, such as tablets and smartphones,” said Mikako Kitagawa, an analyst at Gartner. “Even emerging markets, where PC penetration is low, are not expected to be a strong growth area for PC vendors.”

Microsoft’s new Windows 8 actually deterred potential PC buyers, IDC said, as users felt they could not afford touch-screen models required to make the most of Windows 8, even though the system runs equally well on standard PCs and laptops.

“People think they have to have touch, and they go look at the price points for these touch machines, and they are above where they want to be and they say, ‘I guess I’ll wait,'” said Bob O’Donnell, an analyst at IDC.

O’Donnell said other users were simply uncomfortable with the new Windows system, which dispensed with the familiar start menu and uses colorful ’tiles’ to represent applications.

New Microsoft operating systems usually boost PC sales, but the lukewarm reception for Windows 8 will likely mean an even greater drop in the market this year, said Jay Chou, senior research analyst with the IDC unit that tracks PC sales.

“Users are finding Windows 8 to offer a compromised experience that doesn’t excel either as a new mobile interface or in a classic desktop interface,” he said. “As a result, many users find a decline in the traditional PC experience without gaining much from new features like touch. The result is that many consumers are worried about upgrading to Windows 8, to say nothing of business users who are still just getting into Windows 7.”

Among manufacturers, Hewlett-Packard Co saw a 24 percent decline in sales in the quarter, but narrowly held on to its title of No. 1 global PC supplier, with 15.7 percent market share. Fast-growing rival Lenovo Group managed to keep sales flat and is now just behind HP with a 15.3 percent global share.

Dell Inc, roiled by plans to go private, along with rivals Acer Inc and Asustek, all saw double-digit declines in PC sales.

Apple Inc was not immune from the decline, as some sales of its own Macs appeared to be displaced by iPads. Its U.S. PC sales fell 7.5 percent in the quarter, but it held on to its spot as No. 3 U.S. PC manufacturer, behind HP and Dell.

(Reporting by Bill Rigby; Editing by Phil Berlowitz and Leslie Gevirtz)

Article source: http://www.nytimes.com/reuters/2013/04/10/technology/10reuters-pc-data.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Markets Near Milestone Highs as Federal Reserve Reassures on Rates

February 27, 2013 by Leave a Comment

The Dow Jones industrial average came within 100 points of a milestone high on Wednesday after rising sharply for a second consecutive day.

The market surged in response to more evidence that the Federal Reserve will keep interest rates low, that housing will continue recovering and that shoppers are not cutting back on spending, even with a payroll tax increase.

All but one of the 30 stocks in the Dow Jones industrial average rose, as did all 10 industries in the Standard Poor’s 500-stock index.

The Dow rose 175.24 points, or 1.3 percent, to 14,075.37. The index is now less than 100 points away from its close of 14,164 in October 2007. It has gained 291 points in the last two days, erasing its decline of 216 points on Monday, when inconclusive results from an election in Italy renewed worries that Europe’s fiscal crisis could flare up again.

“The market psychology has clearly shifted. It’s no longer sell the rally; it’s buy the dips,” said Dan Veru, chief investment officer at Palisade Capital Management. “The economic data continues to be strong.”

Stocks have surged, with the Dow up 7.4 percent since the start of the year. Earnings for S. P. 500 companies are set to climb 7.8 percent in the fourth quarter, the third consecutive quarter of growth, according to data from SP Capital IQ.

The S. P. 500-stock index gained 19.05 points, or 1.3 percent, to 1,515.99 on Wednesday. It is 6.3 percent higher for the year and about 3.2 percent short of its nominal record close of 1,565. The Nasdaq composite index rose 32.61 points, or 1.04 percent, to 3,162.26.

Investors were encouraged that the Federal Reserve chairman, Ben S. Bernanke, stood behind the central bank’s low-interest-rate policies as he faced lawmakers for a second day. His comments eased worries about the bank’s resolve to continue the program. Those worries sprang up last week when minutes from the bank’s last policy meeting revealed disagreement about the policy among Fed officials.

Interest rates were steady. The Treasury’s benchmark 10-year note fell 4/32, to 100 29/32, and the yield rose to 1.90 percent from 1.89 percent late Tuesday.

The number of Americans who signed contracts to buy homes rose in January to the highest level in almost three years. The report continued a string of positive housing news, including the government’s announcement on Tuesday that sales of new homes rose 16 percent last month to the highest level since July 2008.

Home builder stocks rose for the second consecutive day. The PulteGroup climbed 25 cents, or 1.3 percent, to $19.30, after rising 5.7 percent the day before.

“Some encouraging news for the bulls has been the housing data that has come out over the past couple of days,” said Todd Salamone, director of research at Schaeffer’s Investment Research.

Mr. Salamone said he remained “extremely bullish” on stocks in the medium and long term, but cautioned that there might be a pullback in the coming days.

Discount retailers rose on Wednesday. Dollar Tree jumped $4.31, or 10.5 percent, to $45.39 after reporting a profit increase of more than 20 percent. Dollar General rose $1.61, or 3.6 percent, to $46.56. Family Dollar Stores rose $1.39, or 2.5 percent, to $57.68.

Priceline.com gained $17.42, or 2.6 percent, to $695.91 after reporting that its net income grew in the fourth quarter on increased bookings.

First Solar fell $4.32, or 13.8 percent, to $27.04 after the company posted disappointing sales for the fourth quarter and gave a weak early outlook for the year.

Target, the discount retail chain, fell 93 cents, or 1.5 percent, to $63.12. The company reported that its quarterly income fell 2 percent as it dealt with intense competition during the holiday shopping season.

DreamWorks Animation fell 30 cents, or 1.8 percent, to $16.31 after posting a loss of $82.7 million. The company booked a write-off on its November release, “Rise of the Guardians,” and on a coming movie that needs to be reworked.

Article source: http://www.nytimes.com/2013/02/28/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Japan’s Central Bank Defends Policy on the Yen

February 14, 2013 by Leave a Comment

TOKYO — The recent monetary push by Japan does not amount to currency manipulation and is a legitimate and much-needed bid to lift its economy out of deflation, the country’s central banker said Thursday after new figures showed an unexpected economic contraction in the fourth quarter.

“Monetary policy seeks only to stabilize the economy,” Masaaki Shirakawa, the Bank of Japan governor, told reporters in Tokyo after the central bank decided to stand pat on policy moves for now, maintaining its benchmark rate target at a range of zero to 0.1 percent and holding off on expansion of an asset-buying program. “It does not seek to influence currencies.”

Earlier Thursday, gross domestic product numbers from the government showed the Japanese economy remained fragile, shrinking at an annualized rate of 0.4 percent in the October to December quarter, the third consecutive quarter of contraction.

Still, economists expect a Japanese economic recovery to gain steam later this year, as Prime Minister Shinzo Abe of Japan pursues fresh fiscal stimulus programs while keeping up pressure on the central bank to stick to near-zero interest rates and continue to flood the economy with money.

Markets have jumped since Mr. Abe began pushing his agenda in mid-November as part of a successful campaign that put his Liberal Democratic Party back in power for the first time since 2009. During the past three months, the Nikkei 225-share index has risen 30 percent, while the yen has weakened by 15 percent against the dollar.

Last month, the government and central bank promised to work together on monetary policies until Japan achieved 2 percent inflation, a lofty goal for Japan, which has been mired for more than a decade in deflation, a damaging decline in prices.

Mr. Shirakawa is due to end his five-year term next month, and Mr. Abe has signaled that he will appoint a successor who will be more aggressive in fighting deflation.

But increasing the Japanese monetary supply to end deflation would also cause the yen to weaken, which Japanese policy makers have openly welcomed as a boon to the country’s exporters. That has led to grumbling from officials in the European Union and elsewhere that Japan was manipulating its currency to give its exports an unfair edge.

On Tuesday, the Group of 7 advanced economies, which includes Japan, pledged to let markets determine the value of their currencies — a statement that brought relief in Japan because it was not singled out for criticism but that also signaled that the prospect of competitive currency devaluations would be up for debate at the meeting this week in Moscow of finance officials from the Group of 20 leading economies.

Finance Minister Taro Aso of Japan vowed to defend Japan against those claims at the Group of 20, saying Thursday on his Web site that “the world had been awed” by Japan’s recent economic policy moves, which were “the subject of global attention.”

“Other countries want to know how we have done this. It is absolutely not a result of us intervening in foreign exchange markets,” Mr. Aso said.

Article source: http://www.nytimes.com/2013/02/15/business/global/japanese-central-bank-defends-yen-policies.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,