UNITED STATES
Slowdown ‘required’: Fed
A slowdown of economic growth and the job market will be “required” to bring down inflation, the Federal Reserve said in notes released on Wednesday, adding that prices remain “unacceptably high.” Fed officials also said inflation has “not yet responded” to increased interest rates, according to minutes of the central bank’s meeting last month, and that “a significant reduction in inflation would likely lag that of aggregate demand.” However, some of the Fed officials cited in the minutes also said that “it would be important to calibrate the pace of further policy tightening with the aim of mitigating the risk of significant adverse effects on the economic outlook.”
NEW ZEALAND
Houses taking longer to sell
Houses are taking longer to sell as rising interest rates put off buyers and listings decline, resulting in the lowest number of completed transactions in more than a decade. The median time to sell a house last month was 47 days, Real Estate Institute of New Zealand data showed yesterday. That is up from 37 days a year earlier and as little as 28 days early last year. House sales fell below 16,000 in the three months through June, the weakest quarter since 2010, CoreLogic New Zealand data showed. Prices have dropped by 12.6 percent from a peak in November last year.
UNITED KINGDOM
Minister blames BOE
Chancellor of the Exchequer Kwasi Kwarteng said that the Bank of England (BOE) would be responsible if British markets suffer renewed volatility after its bond-buying program ends today. Speaking on the sidelines of the IMF’s annual meetings in Washington, Kwarteng told Sky News that any turmoil after the central bank withdraws support “is a matter for the governor.” BOE Governor Andrew Bailey this week underlined his commitment to halting government debt purchases today as planned, both to draw a line under a program that is complicating his efforts to tame inflation and to encourage pension funds to get on with closing their positions.
APPAREL
Fast Retailing issues outlook
Uniqlo owner Fast Retailing Co issued an outlook for profit and sales ahead of analysts’ projections for the current fiscal year, thanks to better demand for its cheap casual apparel in Japan and a weaker yen bolstering profits brought back home from overseas. Operating profit for the year ending August next year is forecast to reach ￥350 billion (US$2.4 billion), the clothing retailer said in a statement yesterday. Net sales are seen at ￥2.65 trillion, compared with analysts’ prediction for ￥2.48 trillion. For the year ended August, operating profit rose to ￥297 billion on net sales of ￥2.3 trillion, the company said, exceeding projections.
FRANCE
Tax hike bill approved
Lawmakers in the National Assembly late on Wednesday voted in favor of an amendment that would raise taxes on large corporation’s dividends paid out on windfall profits. The amendment was voted through by lawmakers from the left, far-right, but also by some of French President Emanuel Macron’s allies in the centrists, who originally proposed it. The government could still block the temporary tax increase with special constitutional powers to quash amendments before a final vote on the whole 2023 budget bill in both houses of parliament.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
TECH COMPETITION: The US restricted sales of two dozen types of manufacturing equipment and three software tools, and blacklisted 140 more Chinese entities US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions. The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement. Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said. The US “will
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
COLLABORATION: The operations center shows the close partnership between Taiwan and Japan in the field of semiconductors, Minister of Economic Affairs J.W. Kuo said Tokyo Electron Ltd, Asia’s biggest semiconductor equipment supplier, yesterday launched a NT$2 billion (US$61.5 million) operations center in Tainan as it aims to expand capacity and meet growing demand. Its new Taiwan Operations Center is expected to help customers release their products faster, boost production efficiency and shorten equipment repair time in a cost-effective way, the company said. The center is about a five-minute drive from the factories of its major customers such as Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 3-nanometer and 2-nanometer fabs. The operations center would have about 1,000 employees when it is fully utilized, the company
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