Last Tuesday, temperatures in Tokyo touched 39.5
degrees Celsius, or 103 degrees Fahrenheit, the hottest since records
began more than 80 years ago.
That is expected to boost sales of cold drinks and
products such as air-conditioning equipment, analysts said.
According to Yasuo Goto, an economist at the Mitsubishi
Research Institute, the effect of the record summer weather "could be
Although the heat-wave was a "one-off factor"
which provided no guarantees that it could continue to support consumer
spending, he said, it was "certainly a factor that will add momentum
to the current economic recovery".
Also boosting optimism were upbeat comments by Alan
Greenspan, chairman of US Federal Reserve.
Mr Greenspan said that growth in the US, the world's
biggest economy and a major importer of Japanese products, was likely to
pick up in coming months.
He added that the recent drop in consumer spending
probably would prove to be short-lived.
GREENSPAN POSITIVE ON US ECONOMY
Alan Greenspan, the Federal Reserve Chairman, has given
a positive report on the US economy, playing down the threat of rising
Appearing before the Senate's Banking Committee, he
said economic trends this year had been "quite favourable".
Mr Greenspan acknowledged that growing consumer demand
had lead to a rise in inflation but stressed that current economic growth
Analysts said his remarks pointed to the likelihood of
interest rate rises.
In testimony to Congress on US monetary policy, Mr
Greenspan said the US economy had enjoyed broad-based growth so far this
Growth was likely to increase in the second half of the
year, he said, while indicators were favourable that inflation would be
He said: "Economic developments have generally
been quite favourable in 2004, lending increasing support to the view that
the expansion is self-sustaining."
Consumer spending had slowed in recent months, Mr
Greenspan noted, as a result of a rise in inflationary pressures, in turn
brought about by the surge in energy prices.
But Mr Greenspan said he believed this would be
He said there had been signs of a recovery in the
labour market over the past six months which should filter through to
"Despite the softness of recent retail sales, the
combination of higher current and anticipated future income, strengthened
balance sheets and still low interest rates bodes well for consumer
spending," he said.
Analysts said Mr Greenspan's upbeat outlook for growth
this year indicated the central bank could raise interest rates more
quickly than expected.
BUSH WELCOMES 9/11 REPORT
President George W Bush has welcomed the report of the
independent commission set up to investigate the 11 September terror
Mr Bush said he agreed with its conclusion that the
hijackers had exploited deep institutional failings.
But he also pointed out that many of its
recommendations were already being implemented.
The commission recommends a wide-ranging overhaul of US
intelligence services and congressional oversight.
"Where government needs to act, we will,"
President George W Bush said after receiving his copy of the report which
comes after two years of exhaustive investigation.
"We will give serious consideration to every idea
because we share a common goal," he added.
His Democratic challenger in this November's
presidential elections, John Kerry, urged the president to act fast.
"If I am elected president and there has still not
been sufficient progress on these issues, I will not wait a single day
more. I will lead," he said.
Intelligence bodies have come under harsh criticism for
failing to avert the airliner hijackings, in which about 3,000 people
But no single individual is to blame, said Republican
chairman Thomas Kean of the panel that produced the report.
"Yet individuals and institutions cannot be
absolved of responsibility," he said.
Bob Hughes, the father of a victim of the attacks, said
"there is plenty of blame to go around".
"There's really no closure for me and my
wife," Mr Hughes said.
UK'S ECONOMY 'BEST SINCE 1990S'
The UK economy is now in its best shape since the 1990s
and will grow by 3.5% this year and 3% in 2005, according to an
influential economic think tank.
Further boosted by a strong global economy, the UK's
growth will be robust over the next two years, said Ernst and Young's Item
Yet it cautioned that Chancellor Gordon Brown was
spending too much, and that UK public debt was becoming a problem.
The report said the housing market would start to slow
down but not crash.
"With a global economy firing on all four
cylinders and a UK economy in its best shape since the late 1990s, we can
look forward to robust growth in the next two years," said the Item
Club's chief economic adviser Peter Spencer.
CHINA BOOM DRIVES SINOPEC OUTPUT
China's booming economy has pushed up output at the
country's - and Asia's — biggest oil refiner, Sinopec, by a fifth in the
first half of 2004.
Sinopec said processing volume was up 19%, with sales
rising nearly 30%.
China is seeing growth of more than 9% a year, despite
state attempts to calm the economy amid fears of overheating.
Soaring energy demands have led to rolling blackouts,
and firms are being forced to put staff on holiday and work at night to
keep demand under control.
Over the weekend, Shanghai — the economic powerhouse
of central China — increased by 25% to 2,000 the number of companies
ordered to switch to night working, in the face of a heatwave which means
air-conditioning usage is eating into power supplies.
SALES AND PROFITS UP AT MICROSOFT
Microsoft has thanked strong sales of personal
computers for a quarterly rise in both sales and profits.
Reporting its results for the fourth quarter, it saw
net profits increase to $2.7bn (£1.5bn) from the $1.6bn (£867m) for the
same period last year.
Sales revenue in turn was up from $8.1bn to $9.3bn,
said the software giant.
Yet on Wall Street, where Microsoft's shares fell
slightly, analysts had been expecting yet higher profits.
They had been predicting profits of 29p a share rather
than the 25p which $2.7bn represents.
Microsoft's quarterly results come a day after it
announced plans to return more than $75bn (£40.5bn) in cash to
shareholders over the next four years, starting with a one-off dividend
worth $32bn, or $3 a share, in December this year.
For its coming fiscal year Microsoft now expects to see
sales revenue of $38.4bn to $38.8bn, up from previous guidance of $37.8bn
TURKISH TRAIN CRASH KILLS 36
At least 36 people were killed when a newly-introduced
high-speed train came off the tracks between Turkey's main cities Istanbul
The government crisis centre initially put the death
toll at 139 — but later revised the figures downwards without giving an
Carriages overturned when the packed express derailed
near the town of Pamukova, in north-west Turkey.
The cause of the crash was not immediately known.
There had been criticism of compromises made when the
new train began running along the modified railway track last month.
But officials insist the train, carrying 230 people
from Istanbul to the capital Ankara, was not travelling fast at the time.
BAT SHRUGS OFF CHINA TOBACCO ROW
British American Tobacco is embroiled in an
embarrassing row with Chinese regulators over its deal to become the first
foreign cigarette maker in China.
BAT announced it would build a $1.5bn (£800m) joint
venture factory in China, churning out 100 billion cigarettes a year.
But the State Tobacco Monopoly Administration says it
has not approved the deal.
BAT says it won clearance "from the highest levels
of state government".
"We wouldn't have made an announcement of the
magnitude that we did last Friday if we didn't have approval," BAT
spokeswoman Teresa Lathangue told the BBC.
EURO 2004 LIFTS HIGH STREET SALES
UK's High Street sales raced ahead in June at the
strongest pace for six months, boosted by the Euro 2004 football
tournament, official figures show.
Retail sales grew by 1.1% on the month compared with
0.7% in May, the Office for National Statistics (ONS) said.
According to the ONS's figures, Euro 2004 pushed up
sales of household goods as consumers bought new TV sets.
The data is likely to increase expectations that the
Bank of England will raise interest rates next month.
US NUCLEAR LAB STAFF PUT ON LEAVE
The US's leading centre for nuclear weapons research
have sent 15 employees on leave amid an investigation into the
disappearance of secret information.
Four other employees have also been sent on leave after
an intern was seriously injured with a laser.
Peter Nanos, the director of Los Alamos laboratory in
New Mexico, said security breaches were threatening the centre.
SYMBOLIC BOSNIA BRIDGE TO REOPEN
One of the former Yugoslavia's most famous historical
landmarks will be reopened soon, 10 years after it was destroyed during
the Bosnian war.
A 16th century bridge at Mostar was blown up during the
bitter fighting between the city's Muslims and Croats in 1993.
More than $13m has been spent on restoring it and
The opening ceremony was due to be attended by
presidents, prime ministers and royalty from across Europe.
Arching across the Neretva river the Stari Most, or old
bridge, has been reconstructed using the same methods and materials which
the original Turkish architects employed nearly 500 years ago.
AMAZON'S PROFITS BELOW THE MARK
Shares in online retailer Amazon fell in after-hours
trading in New York after its latest profit figure came in just below
Amazon's stock gave up $2.61 after it reported second
quarter net profits of $76bn (£41bn) or 18 cents a share, just below the
predicted 19 cents.
NEW MENU GIVES LIFT TO MCDONALD'S
McDonald's has thanked the continuing success of its
recently introduced salad range for its best quarterly sales growth
figures in seven years.
The fast-food giant saw its global sales increase by
10% to $4.7bn (£2.5bn) in the second quarter of 2004, compared to the
same period of 2003.
Profits were up even higher, jumping by 25% to $590.7m,
WAGES TO SURGE IN INDIA, SAYS IMF
Indians can look forward to their incomes increasing
eightfold over the next four decades, according to International Monetary
India has the potential to boost output per person by
5.3% annually, new IMF research maintains.
India's economy grew 8.2% in the year to March — the
country's fastest expansion in 15 years.
SEARS SEES RESULTS TAKE A TUMBLE
Sears, the US's largest department store group, earned
$53m (£29m) between April and June, compared to $309m (£167m) for the
same period last year.
NEW DRUGS FUELLING ASTRAZENECA
AstraZeneca, the Anglo-Swedish drugs giant, has
reported a sharp rise in sales fuelled by a strong take up of its new
generation of drugs.
Sales in the three months to June rose by 19% to
$5.29bn (£2.87bn), with profits up 24% to $1.14bn (£619.7m).
The company reported strong growth in products such as
ulcer drug Nexium and anti-cholesterol product Crestor.
KFC SUPPLIER PROBES POULTRY ABUSE
A US supplier for Kentucky Fried Chicken has fired 11
workers after a video showed the poultry being kicked, stamped on and
slammed against walls.
Pilgrim's Pride vowed to root out all who were
responsible for the abuse at its Moorfield plant in West Virginia.
It came after the animal welfare group Peta released a
secretly taped video showing workers "stomping on, kicking and
throwing live chickens about".
KFC said it had suspended the buying of chicken from
Pilgrim's Pride — the country's second-largest
poultry producer — said it had fired three managers and eight hourly
workers as a result of its own internal investigation.
US ENERGY FIRMS FACING LAW SUITS
Eight US states have joined forces to file law suits
against five giant power firms challenging their gas emissions.
The case was being launched in the federal district
court of Manhattan using the common law of "public nuisance" to
The five are American Electric Power, Southern Co, Xcel
Energy, Cinergy and the Federal Tennessee Valley Authority.
The New York Attorney General's office described the
combined action as a "precedent-setting" move.
The states — California, Connecticut, Iowa, New
Jersey, New York, Rhode Island, Vermont and Wisconsin — contend that the
five are the US's biggest emitters of carbon dioxide.
MITSUBISHI SCALES DOWN US OUTPUT
Japanese carmaker Mitsubishi Motors is to lay off 1,200
workers at its only US factory later this year as part of a worldwide
The measure is part of a radical restructuring of the
firm's business forced upon it by a $9bn(£4.8bn) debt a series of costly
More than 30% of workers at its plant in Illinois will
be let go in October.
Mitsubishi received a $4bn(£2.7bn) rescue package
earlier this year after DaimlerChrysler removed its support.
The company will cut annual capacity by 22% to 140,000
INTERNATIONAL SALES BOOST EBAY
Strong growth in international sales helped online
auction firm eBay double its second quarter profits.
eBay, which recently acquired a leading shopping site
in India, recorded a 51% increase in earnings to $190.4m(£103m) in the
first three months of the year.
The Californian company, which has operations in more
than 17 countries, said its international sales had risen 76% to
$273.7m(£148m) over the period.
The company said it expected full year sales to total
STOCK MARKET FLOAT FOR SHREK FIRM
DreamWorks Animation, the computer-generated cartoons
studio which created the blockbuster Shrek, is to be floated on the US
The company — which also made Chicken Run — is an
offshoot of parent DreamWorks, formed by three US entertainment moguls.
The initial public offering (IPO) may raise as much as
BANK UNANIMOUS ON FREEZING RATES
Members of the Bank of England's Monetary Policy
Committee (MPC) voted unanimously against a third successive rate rise at
Rates were kept on hold at 4.5% after inflation in May
proved below target, and there were tentative signals that the house
market was slowing.
Minutes of the meeting showed the MPC was waiting for
August's inflation report to review the rate situation.
In May and June, the MPC raised rates by a quarter
point in each month.
INTERNET BANK EGG SHRINKS LOSSES
Internet bank Egg has narrowed first-half losses as
uncertainty over parent Prudential's stake in the firm mounts.
Egg reported a pre-tax loss of £4m ($7.37m) for the
six months to 30 June, down from a £23m loss last year.
SALES JUMP LIFTS ERICSSON PROFITS
Shares in Ericsson, one of Europe's most-watched
technology companies, have jumped after the firm reported
better-than-expected quarterly profit.
The Swedish maker of telecommunications equipment said
pre-tax profit for the April to June period was 7.8bn kronor (£564.6m;
$1.05bn; 848m euros).
TURKISH AIRLINES ORDERS 51 PLANES
Turkish Airlines, the country's state-run carrier, has
announced plans to buy 51 new planes to expand its fleet.
The company is looking to benefit from accelerating
domestic economic growth and a subsequent pick-up in air travel.
Turkish Airlines did not reveal details of what it will
pay, but press agencies estimate that the deal may be worth as much as
COURT RELIEF FOR BHOPAL VICTIMS
India's Supreme Court has ordered the government to
release millions of dollars in compensation for victims of the 1984 Bhopal
The court directed that 15bn rupees ($327.5m) be
distributed among the more than 500,000 victims and dependants.
Some of the original compensation figure of $470m has
already been paid out, but legal delays held up the rest.
UK MORTGAGE LENDING RISES SHARPLY
Mortgage lending rose sharply in June, figures from the
British Bankers' Association (BBA) have shown.
Lending rose by £6.5bn, up from £5.1bn in May, and
breached the recent monthly average of £5.7bn.
A similar picture came from the Council of Mortgage
Lenders latest data, which showed a record £27.8bn was advanced in June,
up from £24.1bn in May.
FRENCH BOSSES SLAM 35-HOUR WEEK
Many French bosses think the compulsory 35-hour week is
having an adverse effect on the country's economy, according to new
Of 1,000 heads of small firms polled by Ifop, 93% said
they would like to see restrictions on staff work hours eased.
The 1999 law was intended to reduce France's high
CHINA BOOM LEAVES MANY BEHIND
The number of Chinese people living in abject poverty
rose last year for the first time in a quarter of a century.
According to official figures, 800,000 Chinese citizens
fell into abject poverty last year, with incomes of less than $77 a year.
State-run newspapers said natural disasters were to
blame for the surge.
The figures show that the gap between urban and rural
incomes is also widening, with China's economic reforms benefiting some
more than others.
China's economic boom may be making headlines, but
behind the glitzy new skyscrapers an old phenomenon is rearing its ugly
Poverty has increased in China for the first time since
the economic reforms began 25 years ago.
INFLATION IN THE US RISES SLOWLY
US inflation growth slowed last month but rising petrol
costs continued to push overall consumer prices up.
The Consumer Price Index, the best gauge of inflation,
rose 0.3% in June, the US government said.
"This effectively takes a 50-basis-point
[interest] rate hike out of the hands of the Fed in August," said
Pepper Pike economist Ken Mayland.
In the eurozone, meanwhile, inflation fell in line with
forecasts, from 2.5% in May to 2.4% in June.