Bank of Japan (BOJ) Governor Haruhiko Kuroda urged business leaders to use profits more productively, saying hoarding cash will become costly as the central bank stamps out deflation.
Companies could boost investment in facilities and jobs, taking advantage of a weaker yen, Kuroda said yesterday during a speech in Nagoya.
At the same time, the BOJ will continue to spur price gains, adjusting its unprecedented easing policy as needed to achieve its inflation goal, he said.
Japanese companies are headed toward their highest profits ever as a weaker yen resulting from the bank’s stimulus boosts Toyota Motor Corp and other exporters. Japan Inc holds near-record cash while capital spending in the second quarter was more than 50 percent lower than a peak in the first three months of 2007.
“Kuroda is making it clear it is companies’ turn to act,” SMBC Friend Securities Co economist Mari Iwashita said. “Capital spending, wages and price settings are all vital for the BOJ, but are out of its hands. Kuroda must convince companies the economy will get better and deflation will end.”
Kuroda last week secured a wider board majority for easing that the bank boosted on Oct. 31, and warned the central bank’s key gauge of inflation could fall below 1 percent after the world’s third-largest economy slid into recession.
The TOPIX index of shares advanced 0.6 percent at 12:47pm in Tokyo. The yen gained 0.3 percent against the US dollar to ¥117.94 and is down about 14 percent over the past year.
Falling prices over two decades of stagnation made holding cash a viable option for companies looking for safety and real returns on capital.
The bank has been making steady progress in shaking a “deflationary mindset,” Kuroda said.
Kuroda called on business leaders to take “action” that looks toward an economy that has overcome deflation.
“As a corporate strategy, using their profits in a more productive manner is imperative,” Kuroda said. “I have great interest in developments in wages and price settings through spring of next year.”
The central bank is aiming to stoke 2 percent increases in consumer prices, excluding fresh food and the effects of changes in the sales tax. Core inflation by that measure is forecast to slow to 0.9 percent last month, according to a survey of economists.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day