Wed, Dec 21, 2011 - Page 10 News List

World Business Quick Take

Agencies

CURRENCY

Japan bolsters war chest

Japan said yesterday it would bolster its currency market intervention war chest by ¥30 trillion (US$385 billion), the second-biggest increase on record, as it moves to tame the soaring currency. The move came as Japanese exporters, a key driver of the country’s economy, continue to complain that a strong yen makes their products less competitive overseas and erodes the value of repatriated profits. “With this, we are preparing ourselves so that we can take resolute decisions at any moment in any situation,” Japanese Minister of Finance Jun Azumi told a press conference. The plan, included in a fourth ¥2.53 trillion extra budget approved by the Cabinet yesterday, would raise the accumulated total amount the government is allowed to borrow from the market to finance intervention to ¥195 trillion.

GERMANY

Consumers still confident

Consumer confidence is holding up in the face of the eurozone debt crisis as rising employment and incomes helped to offset looming recession fears, a poll found yesterday. GfK released its latest index of household confidence, with the barometer forecast to remain steady at 5.6 points next month, unchanged from this month, a statement said. “Despite increased economic risks and a further intensification of the debt crisis, Germans are looking to the future positively again,” GfK said.

AUTOMAKERS

Japanese sales set to rebound

Japan’s domestic auto sales will rebound next year as the country recovers from its biggest postwar disaster and the government extends tax breaks and introduces subsidies, an industry group said. Demand for cars, trucks and buses in Japan may grow by about 900,000 units next year after a record 14 percent drop this year, Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association, said yesterday. “We expect car sales to grow at the 2009 pace when tax cuts and subsidies were introduced,” Shiga said.

AUSTRALIA

Central bank jittery

Australia’s central bank yesterday said there was a “non-trivial” possibility of a severe contraction in the eurozone economy, leaving the door open for further interest rate cuts next year. The Reserve Bank of Australia said downside risks to the global economy from Europe’s sovereign debt woes had increased of late, “though the timing and magnitude of any effects ... remained very difficult to predict.” The bank cut the official interest rate by 25 basis points for a second consecutive month to 4.25 percent this month, and the meeting’s minutes, published yesterday, showed European jitters were its main concern.

BANKING

US’ Fed to issue new rules

The US Federal Reserve will issue capital and liquidity rules this week reshaping supervision of the riskiest, largest banks and those with more than US$50 billion in assets, a government official familiar with the matter said. The Dodd-Frank Act requires the Fed to impose heightened standards, including stricter capital levels for systemic banks with more than US$50 billion in assets and non-bank systemic institutions. The stricter standards also target liquidity, risk management structure, credit reporting, concentration limits, stress tests, contingent capital and short-term debt limits.

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