Apr 21 2014 | 8:20 AM
Although often perceived as an export-driven economy, Japan is actually powered mostly by private consumption. According to World Bank data, consumption made up 60.9% of Japan's GDP in 2012.
On April 1st, Japan raised its national consumption tax from 5 to 8%. Economic observers view the tax as necessary to manage a huge budget deficit. But its timing has been controversial. Japan’s government introduced the tax just as economic recovery green shoots have begun to sprout, but before they’ve firmly taken root.
The tax also arrives after 15 or so years of deflation, when Japan appears to be more than halfway toward its goal of achieving 2% inflation.
Will this tax – placed atop a touch of inflation - derail Japan’s nascent economic recovery or simply be a manageable headwind?
In the January-March quarter leading up to the tax increase, a survey of 41 economists by the Japan Center for Economic Research forecast an...
Managing Director, Asia Pacific
Apr 21 2014 | 8:06 AM
Ahead of the Bell: Dow futures are trading up 29 points and S&P futures are trading up 3 points. Slowing growth in China and uncertainty over when the Federal Reserve would begin hiking interest rates, coupled with renewed tensions in Ukraine is keeping global financial markets on edge. However, dovish comments by Fed Chair Janet Yellen last week might smooth some investors nerves. Chinese markets retreated on concerns about a potential share oversupply after the securities regulator released a draft prospectus for new companies planning to list. Reports indicate new and increased violence near a Ukrainian city controlled by pro-Russian separatists killed three people, shaking an already fragile international accord that was designed to avert a wider conflict.
Director, Market Watch & Corporate Actions
Apr 17 2014 | 6:05 PM
U.S. stock indices finished mixed and relatively flat on Thursday as investors weighed another round of earnings, better-than-expected jobless claims and an upbeat Philly Fed index. Energy and Industrials led gains on the S&P 500, while Utilities and Tech topped declines. Gold is lower and Oil is higher amid a flat dollar.
In US economic news, the Labor Department said Initial claims for state unemployment benefits ticked up 2K to a seasonally adjusted 304K for the week ended April 12, but stayed close to a 6-1/2 year low touched the prior week. The reading beat economists forecast of a 315K rise. The four-week moving average for new claims, which irons out week-to-week volatility, hit its lowest level since October 2007.
In a separate report, the Philadelphia Federal Reserve Bank said its business activity index increased to 16.6 this month from 9.0 in March. April's...
Specialist, Market Watch
Apr 17 2014 | 10:23 AM
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Vice President, Strategic Analysis
Apr 17 2014 | 8:24 AM
Ahead of the Bell: Dow futures are trading down 13 points and S&P futures are trading down 2 points. The threat of a civil war in Ukraine and disappointing quarterly results from IBM and Google might unnerve investors already shaken by a strong recent selloff in tech stocks. Since early March, the tech-heavy sector has declined over 6%, underscoring the challenges internet and IT companies face as corporate results are due this week. IBM blamed lower than expected earnings on weak demand from emerging markets, while Google reported margins narrowed on declining advertising. Reports indicate pro-Russian forces attacked a Ukrainian national guard base overnight and Kiev said three separatists were killed. Fed Chair, Janet Yellen said achieving the central bank's economic goals "will likely require low real interest rates for some time."
Director, Market Watch & Corporate Actions