Tue, Apr 10, 2018 - Page 10 News List

World Business Quick Take

Agencies

JAPAN

Surplus could draw US ire

The country’s swelling current-account surplus in February might be good news for Japan’s finances, but not so much for its relationship with the US. “The current-account balance above ¥2 trillion (US$18.68 billion) is the sort of level that makes it easier for Japan to become the target of attacks from the US amid a backdrop of increasing trade frictions,” Life Insurance Co Yuichi Kodama chief economist Meiji Yasuda said. As trade tensions escalate between the US and China, other countries with trade surpluses against the US are nervously wondering who US President Donald Trump might target next — and Trump has already put Japan on notice for what he sees as taking advantage of the US. While much of the current-account surplus is driven by Japan’s income from overseas, the trade surplus with the US grew to a hefty ¥631 billion in February.

AUTOMAKERS

Rolls-Royce sells L’Orange

British engine maker Rolls-Royce yesterday yesterday said it has sold German division L’Orange for 700 million euros (US$859.48 million) to US group Woodward. Stuttgart-based L’Orange, which supplies fuel-injection technology for engines, employs 1,000 people mostly in Germany. The announcement marks the biggest disposal under the tenure of Warren East, who has been Rolls-Royce chief executive since July 2015. “This transaction builds on the actions that we have taken over the last two years to simplify our business,” East said in a statement unveiling the news. “The divestiture of L’Orange enables Rolls-Royce Power Systems to focus on other long-term, high-growth opportunities and allows our company to allocate our capital to core technologies and businesses that drive greater returns for the group.”

ALUMINUM

Rusal stock falls on sanctions

Russian aluminum maker United Co Rusal’s stock plunged about 40 percent, while prices of the metal surged, after US sanctions on the company and its billionaire owner Oleg Deripaska prompted the producer to warn of potential debt defaults and “materially adverse” consequences. Aluminum prices jumped as much as 2.5 percent to US$2,092 per tonne on the London Metal Exchange, extending a 1.6 percent gain in the previous session, as investors bet on supply disruptions. The US Treasury on Friday included Rusal and seven other Deripaska-linked firms in a list of 12 Russian companies hit with sanctions that it said were intended to punish the country for actions in Crimea, Ukraine and Syria, and attempting to subvert Western democracies. The company, also listed in Moscow, is the biggest aluminum maker outside China, and the measures could hurt access to financial markets and disrupt shipments to world buyers.

CHINA

Foreign-currency holdings rise

Foreign-currency holdings increased last month as the government kept capital curbs in place and the yuan capped its best quarter in a decade. Reserves rose US$8.34 billion to US$3.143 trillion last month, the People’s Bank of China said on Sunday. China’s stockpile, the world’s largest, increased last year for the first time since 2014 as robust economic growth boosted confidence in the yuan and trade remained strong. Still, rising trade tension with the US might lead to slower growth of the holdings, and even renew capital outflow pressure on emerging-market economies, including China.

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