Jan-14 - 20, 2002
Japan says yen's fall 'too rapid'
Japan's finance minister said the yen has been falling too
fast, remarks which prompted the currency's biggest rally since September.
The yen has fallen more than 10% against the US dollar in the
past two months with the apparent blessing of the Japanese government, which was
thought by analysts to see benefits for Japanese exports.
Finance minister Masajuro Shiokawa's comments came after the
yen hit a fresh low of 133.37 to the dollar on Wednesday.
The currency's decline to 39-month lows has been "a
little too rapid," said Mr Shiokawa.
The Japanese currency strengthened by more than a full yen
against the dollar to 132.07 by 0615 GMT on Thursday.
Analysts put Mr Shiokawa's comments down to fears that the
yen's decline - and the government's tacit endorsement - could alarm foreign
investors into ditching Japanese assets by encouraging a bleak view of the
economy's overall prospects.
"The rapid drop of the yen is raising fears overseas
investors will instigate a 'sell Japan' scenario," said Koji Sakuratani of
Asahi Life Asset Management.
The yen's slide began a few days after Japan was officially
declared in recession last autumn.
Mr Shiokawa's support for the yen was echoed by Zembei
Mizoguchi, head of the Finance Ministry's international bureau, who insisted the
economy's "fundamentals are sound."
"The yen's fall has progressed considerably. Rapid moves
are not good in the daily foreign exchange market."
The finance minister also said he was unhappy with swift
"I think a move of about one yen is within market
mechanisms but a move of more than two yen in just about 10 days is a different
story," said Mr Shiokawa.
Yen hits 3-year low against dollar
The yen has fallen to a three-year low against the dollar, in
a sign that the Japanese government may be hoping to export its way out of
The dollar posted its biggest one-day gain against the yen
since September on Tuesday, momentarily reaching a value of 132.79 yen, the
Japanese currency's lowest level since late 1998.
In Tokyo trade on Wednesday, the yen recovered slightly and
by mid-afternoon was trading at 132.58 yen to the dollar.
The yen's sharp fall came after Japanese economy minister
Heizo Takenaka signalled that his government does not intend to intervene in
order to support the sliding currency.
"I myself do not think that the current exchange rate is
misaligned with the fundamentals of Japan," he said after a meeting in
Washington with US economics officials.
UK interest rates left unchanged
Bank of England chiefs have left interest rates on hold at
4%, despite increasing evidence of the strength of the UK economy.
The Bank's Monetary Policy Committee decided not to raise
rates, despite a scenario of rebounding house prices and surging High Street
sales which some feared could push inflation higher.
Last week, the governor of the Bank of England, Sir Edward
George, warned that interest rates may have to rise this year to stem a credit
card-fuelled spending boom in the UK.
Analysts said that with fewer signs of recovery in the global
economy, a rate hike would have been too risky, and they believed this was why
the bank did not raise rates.
The Bank also ignored pleas for a rate cut from the UK
manufacturing sector, which is mired in recession.
"By not cutting the interest rate the MPC has today
signed the death warrant for thousands of manufacturing jobs up and down the
country," said the general secretary of the Amicus union, Roger Lyons.
"With unemployment rising, inflation in check and
significant parts of the economy slowing, raising rates should be well off the
radar," said Stephen Radley, chief economist of the Engineering Employers'
"If anything, there should be room for further cuts if
we do not see clear signs of recovery."
But other economists were expecting rates to be moving in the
John Butler, economist at HSBC, said he was "not
surprised" with the decision "given the mixed economic data coming out
of the global economy and the extremely strong UK consumer".
"In our view rates have troughed but we don't see any
scope for rises until much later in the year, probably September."
French criticise bank changeover
French banks say the changeover to the euro went swimmingly,
but many of their customers are seething over what they see as inefficiency, bad
manners and opportunism on the part of the country's financial institutions.
"Banks in Euro Hold-Up" was the front page headline
of France Soir that neatly summed up many consumers' thoughts over the past
The newspaper went on to list its readers' grievances. These
include accusations that some banks have been simply refusing to change francs
Others allowed only their own customers to change money and
turned away any others trying to offload their last francs.
Economics Minister Laurent Fabius gave the banks a rap over
the knuckles for this behaviour and told them they had to rise to the challenge
that their central role in the euro changeover presented.
Bush promotes economic plan in high-jobless West
With the gloves off in an election-year battle over the
economy, President George W. Bush on Saturday visits the unemployment-plagued
West Coast to promote his plan to bring the nation out of recession.
The president is to preside at a town-hall style meeting in
Ontario, California and will speak to families and workers in Portland, Oregon.
The entire West Coast has been hit hard by job losses during
the current slowdown. Oregon's 7.4 per cent unemployment rate in November led
the nation, followed by Washington with 7.0 per cent.
California had a 6.0 per cent unemployment rate, compared
with a revised national rate of 5.6 per cent.
The national unemployment rate rose in December to a six-year
high of 5.8 per cent, according to figures released on Friday. But the pace of
layoffs slowed, sparking optimism that an economic turnaround may be starting.
Nevertheless, Bush is making the economy a top issue for the
new year along with the war on terrorism, mindful of the political damage his
father, former President George Bush, suffered from charges of insensitivity to
a recession after the Gulf War.
Democrats have begun to accuse Republicans of mismanaging the
economy as the parties square off for November elections that will decide
control of both houses of Congress.
There is some indication of good news (but) we still feel
there is a need to help those who have lost jobs, White House counselor Karen
Hughes told reporters on Friday in Texas, where Bush is vacationing.
US retail sales disappoint
US retail sales were down on the year during the final weeks
of 2001, casting doubt over recent forecasts of an early economic recovery.
Instinet said its Redbook Retail Sales Average for the five
weeks to 5 January were 3.5% down on the same period one year earlier.
Also on Tuesday, the Bank of Tokyo-Mitsubishi and UBS Warburg
said their joint retail chain store sales index slipped 0.6% during the week to
5 January, having risen by 0.9% the previous week.
Consumer spending, which accounts for two thirds of US
economic output, is a key indicator of the health of the wider economy.
Analysts said the findings suggest that the US economy's
long-awaited recovery may take longer than hoped.
"I believe recovery will occur around mid-2002",
said Philadelphia Federal Reserve Bank President Anthony Santomero.
The retail indexes published on Tuesday come ahead of
authoritative sales figures for December from the US Commerce Department, due
out towards the end of January.
Ford job cut fears
Ford Motor Co is set to announce 20,000 job losses with the
closure of five plants in North America, analysts say.
Ford, the world's number two vehicle maker, is expected to
unveil its first annual loss since 1992 later this month after losing $1.4bn in
the six months to the end of September 2001.
Westland closes factory
Westland Helicopters has confirmed it is to cut 950 jobs and
close one of its Somerset factories. About 5,000 staff were called to a briefing
on the restructuring at 1100 GMT on Thursday.
The Weston-super-Mare plant will close with the loss of 350
jobs with another 600 office and production workers going at the main site in
BMI to launch low-cost airline
BMI British Midland plans to launch a low-cost airline in
time for Easter. The airline will operate out of its East Midlands hub, flying
to European destinations including Barcelona, Nice, Palma, Malaga, Alicante and
Steel makers in new alliance
Japan's fourth-largest steel maker Sumitomo Metal Industries
has said it has agreed to a broad alliance with Europe's second largest
steel-producer Corus Group, as the companies seek to respond to intense
The alliance will include exchange of thin steel plate and
steel rod technology, and two producers will also consider expanding the
partnership to construction steel.
The deal is the latest of a number of tie-ups in the global
steel industry, driven in part by price pressure from the auto sector, which is
one of its main customers.
Infosys profits beat the gloom
India's premier software company , Infosys Technologies, has
kicked off the corporate earnings season by announcing a net profit of 2.06bn
Rupees ($42.5m; £29.4m) for the last three months of the year.
China steps up stock market crackdown
China's stock market regulator has reprimanded the investment
industry for behaviour that could destabilise the stock market, according to a
letter reproduced in the Chinese media.
In unusually blunt language, Zhang Jinghua reportedly said he
was "very angry" at fund managers who had applied to buy shares they
could not pay for.
Mr Zhang is the director of the fund management division at
the China Securities and Regulatory Commission (CSRC).
The Chinese authorities are eager to introduce international
norms into the country's stock market and banking system and clean up corporate
governance before the arrival of foreign competition.
Nigeria invites in refinery-builders
Nigeria, Africa's largest oil producing country, has taken
its biggest step so far towards liberalising its downstream oil industry.
The government on Thursday invited international firms to bid
to set up of private oil refineries in Nigeria.
According to the president's adviser on petroleum and energy
Rilwanu Lukman, this step removes a major obstacle to investing in the oil
Oil market liberalization is a part of the government's
reform, backed by the International Monetary Fund and the World Bank.
China investment in Mauritius cotton
A Chinese company is to build a cotton spinning mill in
Mauritius, taking advantage of laws that allow duty-free access to the US, the
world's biggest textiles market.
Textiles exported from Mauritius qualify for duty-free access
to the US under the African Growth and Opportunities Act (AGOA).
The act was signed into law by President Clinton to boost
trade between Africa and the US, by offering African exporters trade advantages.
The cotton mill is expected to produce 18,000 tonnes of cotton a year.
Alaska criticises BP cutback
The Governor of the State of Alaska, Tony Knowles, has
criticised the oil giant BP for scaling back its plans for offshore exploration.
BP has postponed its development of the Liberty field - a
move which could save it about $600m - and cut about 120 staff and 75 contract
"It is about a fifth of BP's Anchorage workforce,"
the governor's spokesman Bob King told the BBC's World Business Report.
"Moreover I think we are concerned on BP's decision to
focus solely on development of existing fields and not on more frontier
development in Alaska," he said.
South Africa probes rand plunge
Amid allegations from business leaders that nefarious forces
have been at work, the South African government has set up a commission to
investigate the steep slide in the value of the rand last year.
The commission will be chaired by John Myburgh, a
well-respected white high court judge whose career includes an official
investigation last year into the collapse of the Regal Treasury Private Bank.
Kenyan opposition slams oil deal
Kenya's main opposition has voiced "strong
objection" to government plans to import oil from Sudan, describing the
deal as morally wrong.
Ford-Kenya Secretary General Gitobu Imanyara said it was
hypocritical of the government to buy oil from the Khartoum government while
attempting to play the role of an impartial mediator in the country's
long-running civil war.
Unilever and AOL seal 'landmark' ad deal
Household products giant Unilever has signed a
"groundbreaking" advertising and research contract with
magazine-to-website giant AOL Time Warner.
The "multi-million dollar" deal will see Unilever
products, such as Dove soap and Pond's cream, advertised across the range of AOL
Time Warner media, including the Turner TV network, Time magazine and the
America Online web services.
The announcement comes amid a growing trend among advertisers
to seal cross-media agreements, with Procter & Gamble last May signing a
$300m internet-to-billboard contract with media giant Viacom.
But the deal between AOL and Unilever, the world's largest
advertiser, will build on traditional ad arrangements by including clauses on
sharing internet know-how, and knowledge on customer feedback and marketing, the
Ukraine's privatisation falters
Ukraine failed to achieve the privatisation targets that it
set itself for last year.
The government has reported that privatisation revenues
totalled only 2.12bn hryvnias ($400m, $278m) last year, just over a third of its
The government had expected to raise 5.9bn hryvnias in 2001,
but the programme suffered a blow when President Leonid Kuchma banned
privatisation of several plants, producing military and aerospace equipment,
pipes and gas turbines, and froze the energy sector sale-off.
The government hopes to raise 5.8bn hryvnias this year by
completing the long awaited sale of the state telecom monopoly, Ukrtelekom and
by privatising 12 electricity distributing companies.
The country so far failed to achieve a notable privatisation
success, and analysts doubt whether Ukraine can reach this year's target.
Argentina currency fears mount
Argentina is bracing itself for the resumption of currency
trading on Thursday, amid growing uncertainty over how its controversial new
dual exchange rate system will bear up.
Analysts say the government's failure to explain clearly how
the new system will work has stoked fears that the new system will unravel when
the foreign exchange rate markets reopen, causing a surge in inflation.
"The lack of new economic announcements has allowed
rumors surrounding the strong devaluation of the peso to gain dangerous ground
and will without doubt increase investor nervousness," analysts Argentine
Research wrote in a note to investors on Wednesday.
Energy firms warned off hard sell
Energy companies are being warned not to use hard-sell
tactics in their attempts to sign up new customers.
Energy minister Brian Wilson is urging gas and electricity
suppliers to abide by a special charter which came into effect this month,
giving customers new rights.
The voluntary code aims to make it easier for customers who
have switched suppliers in error to return to their original contract.
The move follows an increase in the number of complaints
about suppliers since deregulation of the power industry.
The number of people out of work in Germany grew every single
month in 2001 and is now only just short of four million, official data has
Boeing 2001 orders down by half
The world's biggest aircraft maker Boeing has said that
orders fell by nearly half last year, blaming savage cutbacks by the airline
industry in the wake of the 11 September attacks.
The Chicago-based company said on Wednesday that it received
a total of 335 new orders during 2001, 45% fewer than the previous year.
Lower corporate spending on technology reduces profits
Accenture, the world's biggest management consultancy, has unveiled a sharp
decline in net profits.
The company said profits for the three months to 30 November
fell to $81.7m from $148.5m during the same period one year earlier, a decline
of almost 45%.
Reg Vardy profits rocket
Reg Vardy said its pre-tax profits rose 61% to £15.2m
($21.9; 24.6 euros) during the six months to 31 October.
Fresh protests rock Argentina
Mass protests have erupted in the Argentine capital Buenos
Aires hours before currency markets reopen and the peso's devaluation becomes a
Demonstrators overturned cars, lit fires in the street and
threw stones at police, who responded with tear gas and rubber bullets to force
about 1,000 people back from the presidential palace.