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The BBC World Debate, "Rescuing the Global Economy: What next?" with panelists: Christine Lagarde, managing director, IMF; Peter Orszag, vice chairman, Global Banking, Citigroup; Raghuram Rajan, chief economic advisor, Ministry of Finance, India; Wolfgang Schäuble, federal minister of finance, Germany and moderator Nik Gowing, Presenter, BBC World News, Octr 12, 2012 at the Tokyo International Forum in Toyko, Japan. IMF Staff Photograph/Stephen Jaffe
Seiji Maehara, Japan’s economy minister
said Friday that he has a “extreme sense of crisis” as the government downgraded
its economic assessment of the economy for a third month.
“It’s necessary to take a proper response on both
fiscal and financial fronts,” Maehara told reporters in Tokyo after the
government released a report for October.
“I have an extreme sense of crisis about current
economic conditions,” Maehara said, according to Bloomberg. “Our biggest issue
is the trend of yen appreciation, and the serious suffering this causes
exporters,” adding that he would discuss the topic at meetings with the chiefs
of the US Federal Reserve and the European Central Bank.
Japan's government downgraded its view of the
economy for the third month in October as worries about Europe's debt crisis and
China's slowdown intensified, adding risk to the growth outlook.
Slowing overseas demand prompted the government to lower its assessment on
factory output for the third straight month.
"The economic recovery has had a weak tone recently due to a slowdown in the
global economy, although some steadiness is still shown," the Cabinet Office
said in its latest monthly report on Oct. 12.
The Cabinet office downgrade followed the Bank of Japan's warning last week that
economic activity was leveling off.
The Cabinet Office said factory output is decreasing, but maintained its view of
exports as weak in tone.
Japan has no intention of backing down in a
damaging spat with China over the Senkaku Islands regardless of the negative
impact it might have on economic ties with its largest trade partner, the
economy minister told the Financial Times.
“It is best if the two countries can maintain good relations, but the problem
has to do with Japan’s sovereignty over its own territory so we cannot
compromise,” Seiji Maehara said in an interview on Thursday.
Officials from both countries agreed to hold
vice- ministerial level discussions at an unspecified date, Japan’s Foreign
Ministry said last night. The dispute “will have a number of mostly negative
economic effects over the medium term,” Moody’s Analytics said in a report
Eurozone industrial production to post second consecutive month of growth:
David McNamara of Davy comments -- "The Eurozone industrial production
out-turn for August, released later today (10.00), should indicate that output
expanded for the second consecutive month, with an expectation of 0.5-0.8%
growth on the month following 0.5% growth in July.
Consensus-beating monthly out-turns in France (+1.5%), Spain (+1.6%) and
Italy (+1.7%) likely pushed up on the index in August, despite a 0.5% fall in
Germany. However, industrial output is still well down on the year: 2.4% in
July, with the index likely to be down close to 3% year-on-year in August even
if output matches expectations. Encouragingly, industrial production output is
generally surpassing expectations in Q3, with PMIs in the low-to-mid 40s
pointing to negative growth, but actual output bucking that trend. Industrial
production may yet fall back in September in line with PMIs, but Q3 is looking
like a much stronger quarter after a very weak Q2.
In the US, markets will focus on the October release of the Michigan Consumer
Confidence measure today (14.55). After robust growth in September, from 74.3 to
78.3, on the back on the Fed’s QE3 announcement, the index is expected to fall
back slightly to 78.0 in October, as the QE3 boost begins to fade. However, the
better-than-expected labour market figures in September should sustain the gains
in the index in the coming months, but may have come too late last week to
effect any upturn in this month's index."
Commenting, Justin Doyle, Investec Bank Ireland, said:
1.The markets all but ignored Spain’s
S&P two notch downgrade yesterday morning with the Euro/USD closing last night
over 100 points higher against its lows of earlier in the day, for some strange
reason the bid tone continues this morning.
2.The great and the good are in Japan
this weekend as global finance
ministers and central bankers gather in Tokyo for the annual IMF and World Bank
meetings. The austerity versus growth argument should rumble on as Germany
disagrees with the IMF’s call for an easing of fiscal consolidation on the
European peripheral economies.
3.Greece was back in the news yesterday as their July unemployment rate
rose to over 25%.......good to see that austerity is having such a positive
4.Eurozone Industrial Production numbers are out later this
morning………fingers crossed we get some good news.
Economic View: Residential rental yield highest since 2002; Dermot
O'Leary of Goodbody comments -- "Given the regional differences as well as
the different supply and demand dynamics at work in the apartment versus family homes market it is somewhat difficult to come to
conclusions on the state of the Irish property market. Nevertheless, there has been evidence
recently of a bottoming out in the market, with particular emphasis on the situation in Dublin
where supply is lower and demand is higher.
One of the key indicators we watch in terms of valuations in the market is
rental yields. There are numerous sources for rental yields available, but we tend to focus on the
official source of the CSO for national analysis. In 2006, we estimate the average residential
yield in Ireland fell to a low of c.3%, well below historical and international norms. Despite a large
decline in rents, the halving in house prices since that time has been sufficient to push the
rental yield up significantly since that time. Using new rental data from the Census and
updating for more recent rent movements (including yesterday’s CSO release) we estimate that the
rental yield officially stood at 5.5% in Q3. This is the highest yield since 2002 but
probably underestimates the degree to which the yield has adjusted upwards. This is because the official
CSO data we base the house price movements upon does not include cash transactions.
Including these may indicate an even sharper fall in house prices. As an indication, our
analysis of Allsop Space property auction earlier in the year showed that transactions were
occurring at average yields of c8%.
The key point is that rents have stabilised and have indeed started to rise in
parts of the country. Coupled with the collapse in house prices, rental yields are now close
to what we perceive to be fair value, albeit with the usual caveats of location."
In New York Thursday, the Dow
fell 19 points or 0.14% to 13,345.
The S&P 500 declined 0.02%
and the Nasdaq dropped 0.08%.
The MSCI Asia
Pacific Index rose 0.5% on Friday.
225 closed down 0.15%; China's Shanghai Composite Index rose 0.10%; South
Korea's Kospi added 0.01%; Australia's S&P/ASX 200 advanced 0.07% and in Mumbai,
the Bombay Stock Exchange's Sensex 30 Index fell 0.42%.
In Europe, the
Dow Jones Stoxx Europe 600 is down 0.27% in morning trading Friday.
skyscrapers and immaculate beaches of Singapore's seaport look out on one of the
world’s largest parking lots: mile after mile of empty cargo ships, as far as
the eye can see.
fleets bob at anchor, with empty cargo holds, off the coasts of southeast
Malaysia and Hong Kong. And dozens of newly built ships float empty near the
giant shipyards of South Korea and China, their owners from all over the world
reluctant to accept delivery during one of the worst markets ever for the global
as six weeks ago large freighters that can carry bulk commodities like iron ore
or grain were fetching charter rates of $15,000 a day. Now, brokers and owners
say, the going rate is $6,000 a day. If any customers can even be found.
between the US benchmark WTI (West Texas Intermediate) used on the New York
Mercantile Exchange and Brent is at $23 - - The Globe and Mail says that for the
past 10 months, Canadian producers - - whose prices are tied to WTI - - have
been taking steep discounts for their oil compared with international crude
prices that are benchmarked against North Sea Brent, which can be shipped more
readily. In the past, WTI tended to trade at a small premium to Brent, because
it is easier to refine.
hit a peak of $28.08 (US) on Oct. 14, but has fallen dramatically since then.
After plans for more pipeline capacity at Cushing, Oklahoma, the differential