Nominees pass lower house
The government’s nominees to lead the Bank of Japan (BOJ) won approval from the lower house of parliament yesterday, moving the trio a step closer to taking the top jobs at the central bank. Proposed BOJ governor Haruhiko Kuroda is widely expected to win upper house confirmation today. The lower house yesterday also approved Kuroda’s proposed deputies, Kikuo Iwata and Hiroshi Nakaso, with both also on course to win upper house support, clearing the way for them to take up the central bank posts. The new BOJ management team is slated to take office next week.
Won falls to five-month low
The won fell to a five-month low as overseas investors pulled money from local stocks after the central bank left interest rates unchanged, despite concerns over whether growth in Asia’s fourth-largest economy is back on track. The Bank of Korea kept its benchmark seven-day repurchase rate at 2.75 percent for a fifth month yesterday. The won fell 1.1 percent to 1,109.11 to the US dollar, according to data compiled by Bloomberg. It touched 1,110.61, the weakest level since Oct. 15 last year.
Central bank maintains rate
The central bank kept its benchmark interest rate steady at a record low of 3.5 percent yesterday, as expected, but cut the rate on its short-term special deposit account facility for a second meeting in a row to temper the peso’s rise. It also raised its inflation forecasts for this year and next, but said price rises would likely remain manageable, supporting market views rates would be raised later in the year. Data last week showed annual inflation last month quickened to 3.4 percent, the fastest in five months.
Inflation rises to 6.84%
The country’s inflation increased unexpectedly last month, data showed yesterday, tempering hopes of an interest rate cut next week after the central bank chief warned about rising prices. After four months of easing, the widely watched Wholesale Price Index rose to 6.84 percent last month from a year earlier, up from 6.62 percent in the previous month. On Wednesday, Reserve Bank of India Governor Duvvuri Subbarao reiterated his concern about persistently high inflation.
VW to raise China production
Volkswagen AG, Europe’s largest automaker, plans to increase production 60 percent by 2018 in China, where the German company’s earnings last year surged by almost half. A new plant in China that the supervisory board has just approved will be designed to build as many as 300,000 vehicles yearly and will start operating in early 2016, chief executive officer Martin Winterkorn said yesterday in a statement. Production capacity in China will rise to 4 million vehicles a year by 2018 from about 2.5 million currently.
‘Dream Hub’ faces collapse
A US$28 billion real-estate project in Seoul was facing collapse yesterday after developer Yongsan Development Corp missed a Wednesday deadline to pay 5.9 billion won (US$5.4 million) in interest on asset-backed commercial paper worth 200 billion won. The 31 trillion won “Dream Hub” project aims to develop a 56 hectare plot in central Seoul into a modern business hub, with shopping malls, hotels, department stores and apartment blocks, as well as a landmark 111-story tower.