Japan’s corporate bankruptcies rose 13.4 percent last month as the fallout from the global credit- market turmoil engulfed the world’s second-largest economy.
Business failures climbed to 1,429 cases last month from the same month a year earlier, Tokyo Shoko Research Ltd said in a report in Tokyo yesterday. The rate of increase eased from September’s 34 percent, which was the steepest in eight years.
Bank of Japan Governor Masaaki Shirakawa said last month that increasing bankruptcies in the property industry were making it costlier for some companies to borrow, further stifling economic growth.
The bank lowered its benchmark interest rate to 0.3 percent from 0.5 percent last month, the first cut in seven years, to stave off a prolonged recession.
“We expect Japan’s economy to barely expand” both in the year ending March 31 and the next, said Junko Nishioka, an economist at RBS Securities Japan Ltd in Tokyo. “Growth will remain pretty weak for the time being.”
Developers in Japan are among the hardest hit by the financial turmoil as foreign investors withdraw from the market, banks cut lending and the slowing economy dampens demand for homes. Six of seven listed companies that went out of business last month were real estate-related firms, and fallout from the industry’s slump is spreading to the overall economy.
GDP probably expanded at an annual 0.1 percent pace in the three months ended Sept. 30 after contracting 3 percent in the second quarter, the median estimate of 26 economists surveyed by Bloomberg News showed.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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