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JR Tokai resumes Maglev Shinkansen train test runs

Central Japan Railway Co. resumed test runs on Thursday of its high-speed magnetic levitation Shinkansen train on a course in Yamanashi Prefecture, west of Tokyo.

It was the first test since September 2011 and the first on the course, which has been extended from 18.4 kilometers to 42.8 kilometers.The railway operator, better known as JR Tokai, tested the latest commercially viable five-car L0 maglev train. The company hopes to eventually test a 12-car train on the same course.

Abe to raise consumption tax as planned: LDP Machimura

Prime Minister Shinzo Abe is believed to go ahead with a consumption tax hike in April next year as planned, a Liberal Democratic Party heavyweight said Sunday.

If Abe says he will start over from scratch a consumption tax increase, he would suffer grave damage, Nobutaka Machimura, former chief cabinet secretary, said at a press conference held after a meeting of his intraparty faction in Karuizawa in the central Japan prefecture of Nagano.

Source: NewsOnJapan

Japan: Unemployment rate drops to 3.8%

The seasonally adjusted unemployment rate fell for the second straight month to 3.8 percent in July, down 0.1 percentage point from the previous month, the Internal Affairs and Communications Ministry said Friday.

The figure beat a median forecast of 3.9 percent by 24 economic institutes surveyed by Jiji Press.

The Health, Labor and Welfare Ministry said the ratio of effective job openings to job seekers stood at 0.94 in July after seasonal adjustment, up 0.2 point from the previous month. The gauge improved for the fifth consecutive month.

China: Economic slowdown, railways hold back airlines

Slower economic growth and competition from high-speed railways were a drag on the first-half performance of domestic airlines, though there was wide divergence in the sector, the carriers' interim reports show.

On Monday, China Southern Airlines Co Ltd became the first carrier among the nation's top three to report first-half results.

The Guangzhou-based carrier saw revenue slip 4.2 percent year-on-year to 46 billion yuan ($7.5 billion), while net profit tumbled 32.7 percent to 302 million yuan, the third decline in a row.

In contrast, Beijing-based Air China Ltd, which released its interim report a day later, said net profit rose 7.31 percent to 1.1 billion yuan, ending a two-year decline. Revenue, however, fell 3.58 percent to 45.9 billion yuan.

Both airlines benefited from the yuan's appreciation against the dollar, which yielded foreign-exchange gains of 1.44 billion yuan for China Southern and 1.12 billion yuan for Air China.

Hainan Airlines Co Ltd, the nation's fourth-largest carrier, reported robust profitability. It said on Thursday that revenue grew 3.83 percent to 14.4 billion yuan, with net profit soaring 29.28 percent to 645 million yuan.

Hainan Airlines credited the growth to an enlarged fleet, which expanded to 120 planes from 109, as well as increasing passenger traffic. In the first half, the airline carried 12.46 million passengers, up 13.38 percent.

China Eastern Co Ltd posted 41.48 billion yuan in revenue, up 2.66 percent year-on-year, and 763 million yuan in net profit. But analysts were downbeat about its performance.

Shanghai International Airport, which operates Pudong International Airport and the smaller Hongqiao International Airport, generated 2.47 billion yuan in first-half revenue, up 8.68 percent year-on-year. Net profit rose 18.29 percent to 893 million yuan.

Source: Xinhua

Asia Pacific Indices 11.05 p.m. Eastern Time

Nikkei Stock Average 225	View	1 Sep 2013	13,586.70	+197.84	+1.48%
.HSI	Hang Seng Index	View	1 Sep 2013	22,135.40	+404.03	+1.86%
.AORD	ASX All Ordinaries Index		1 Sep 2013	5,178.10	+52.81	+1.03%
.KS11	KOSPI Index		1 Sep 2013	1,924.89	-1.47	-0.08%
.FTSTI	Straits Times Index		1 Sep 2013	3,050.66	+21.72	+0.72%
.JKSE	Jakarta Composite		1 Sep 2013	4,175.00	-20.09	-0.48%
.PSI	PSE Composite Index		1 Sep 2013	6,070.41	-4.76	-0.08%
.KSE	Karachi SE 100 Index		30 Aug 2013	22,160.85	-53.88	-0.24%
.SSEC	Shanghai Composite Index		1 Sep 2013	2,095.74	-2.64	-0.13%
Source: Reuters

More Europe or EU-lite

"In the dark days of Europe's debt crisis in 2012, when it seemed Greece might be forced out of the euro and the single currency could implode, leaders believed "more Europe" was the only answer.
Among the more fervent voices in support was German Chancellor Angela Merkel, whose declaration that "we need more Europe; we need more cooperation" prompted policymakers to draft plans for a banking union, closer fiscal ties and, in time, a more complete political integration of the union's 28 countries.
A year on, banking union - the idea of providing a single backstop for all the region's banks - stumbles ahead but only as a shadow of its original self. Fiscal union is barely mentioned, while the steps that would have come after are long forgotten.
Instead of "more Europe", the more common phrase in Brussels these days might be "EU-lite". Rather than the relentless logic of "ever closer union" - the guiding principle of Europe's federalists for 60 years - the attitude among some member states is better described as "only as much Europe as we really need".
  Britain's vision for the EU - which Cameron wants to remain part of - is a union focused on its strengths as a trading bloc, the world's largest, and as a single market of 500 million developed-world consumers.
When Britain first raised the possibility of a renegotiation of its ties earlier this year, it was a lonely voice. Opponents, including France and the European Commission, said nobody should be allowed to "pick and choose" the terms of their membership.
But the Netherlands see room for improvement and Britain see's the EU more like a trading bloc.

While Brady agrees the federalist dream of a "country called Europe" may have vanished, the European project remains alive and its momentum is still towards deeper integration. Membership of the euro, the biggest symbol of unity, is growing.

The factor that will determine whether "more Europe" or "EU-lite" wins the day will be the economic crisis,  analysts say"."

Source: Reuters

"Chinese economy might suffer ups and downs, but its long-term prospect remains bright"

 "Chinese economy might suffer ups and downs, but its long-term prospect remains bright, Daniel Gros, director of the Centre for European Policy Studies (CEPS), told Xinhua.

The senior expert painted a much rosier picture for the world's second largest economy than a handful of experts in the West who have been claiming that the economy was about to collapse amid signs of slowing down.

the "accumulation of human capital and physical capital" as the fundamentals that would guarantee the Chinese economy a bright future in the long run.

"Education of the population is very strong and your people have very high savings. If you take these two things together, you can have another 10 to 15 years of what is called 'extensive growth'," Gros said.

He attributed the current slower growth to the fact that "the grow rates over the last six or seven years for the Chinese economy were above potential, so the next seven years maybe below potential."

"As the potential for China's annual economic growth rate is 7 to 8 percent, maybe it would be less than 7 percent in the next few years," he said.

"The readjustment away from investment towards consumption, the so-called rebalancing, is much more difficult than many people think. Because when you have had investment rate of close to 50 percent, that is a very slow process," he said.

The rebalancing would also be hindered by "a lot of inertia," which means that "once it goes in one direction, it tends to go a long time in that direction. That is called the accelerator model in economics," he said.

The economist expected the "spiral downward" resulting from less investment to last two, three or five years, saying that "this spiral downward is moving very slow, but very persistent."

While saying that the biggest risk in the Chinese economy is that this spiral goes down too quickly, Gros said, "The risk exists, but I don't think it will materialize." It will be very important to keep a very alert economic response by authorities to calm down the economy,and keep stability in monetary policy and exchange rate".

Source: Xinhua

Borse del Vecchio Continente, una partita a poker Aspettando la (vera) svolta

"La brusca frenata di fine maggio non ha rovesciato la tendenza di fondo. I listini del Vecchio Continente continuano la loro marcia di recupero che sembrava essersi interrotta sulla scia delle intenzioni della Federal Reserve americana di rallentare il programma di acquisto di titoli sulmercato secondario (quantitative easing). Nella finanza globalizzata, in cui predomina l’interdipendenza tra le economie e le politiche monetarie, la semplice ipotesi di una attenuazione delle scelte monetarie espansive aveva gettato nel panico gli operatori e aveva provocato una violenta correzione dei listini. Anche sulla sponda europea dell’Atlantico.
Ma ecco che da Francoforte (e contemporaneamente anche da Londra, per bocca del nuovo governatore della Bank of England Mark Carney) arriva la rettifica. «I tassi nell’eurozona rimarranno bassi ancora a lungo», ha dichiarato il presidente Mario Draghi nel corso della riunione del board della Bce di giovedì scorso. E le borse, che da alcune settimane non facevano che inanellare sedute di segno negativo, hanno risposto con entusiasmo a questa prospettiva, con rialzi che vanno dal 3,4% di Piazza Affari, al 2,1% di Francoforte.
Inutile ricordare che le prospettive economiche, soprattutto in Italia rimangono oscure. Ma il nuovo peggioramento della crisi del debito portoghese e la consapevolezza che la ripresa non comincerà prima della fine dell’anno non bastano a deprimere i listini. Che giocano d’anticipo e che scommettono già adesso su quei settori e su quelle società che registrano buoni tassi di crescita degli utili e del fatturato. In questo quadro di frammentazione, predomina fra i listini europei un tratto comune. Tutte le principali piazze finanziarie trattano a sconto, con una media del rapporto prezzo/utili di appena 11,8 volte, contro le 14,5 volte della borsa di Wall Street, sostenuta da un’economia in crescita.

Corriere della Sera

Vodafone in advanced talks to sell its 45% stake of Verizon Wireless.

 "Verizon Communications and Vodafone plan to announce a $130 billion deal on Monday that will give the U.S. telecom giant complete control of Verizon Wireless, subject to final board approval, people familiar with the matter said.

Vodafone said in a statement late on Sunday it was in advanced talks with Verizon to sell its 45 percent stake in the joint venture for $130 billion, comprising cash and common shares, but that there was no certainty an agreement would be reached.

Under the terms of the proposed agreement, Vodafone would get $60 billion in cash, $60 billion in Verizon stock, and an additional $10 billion from smaller transactions that will take the total deal value to $130 billion, two of the people familiar with the matter said on Saturday.

To fund the cash portion of the deal, Verizon has lined up as much as $65 billion in financing from four banks: JPMorgan Chase & Co, Morgan Stanley, Barclays Plc and Bank of America Merrill Lynch, they said. The banks have committed to the financing which is expected be split evenly among the four, two people said.

Another hindrance to a deal has been the possibility of a huge tax bill for Vodafone from the sale, based on Verizon Wireless' massive growth since it was established. But the sources said the deal would be structured in such way that Vodafone's tax bill could be cut to around $5 billion".

Source:  Reuters

China: Retailers are not sure the Economy is stabilizing yet.

If things are really starting to look up for China's economy, as a recent spate of better-than-expected government data seems to suggest, nobody appears to have told its biggest retailers.

A Reuters review of first-half earnings showed that more than 20 Chinese companies selling everything from footwear  to food were not convinced the economic slowdown had bottomed out, and neither were their traditionally thrifty customers.

"There are uncertainties in future prospects as the economy is struggling with a difficult transition involving structural rebalancing and revamping the growth model," said Belle, which has a market value of $11.6 billion and manages more than 18,000 retail outlets across 360 Chinese cities.

Economists have long doubted the accuracy of official economic data and this skepticism has increased as China plots a course towards consumption-led growth. The official retail sales measure, for example, counts a sale from when an item is shipped, rather than when it is actually sold.

The latest data, however, supports retailers' complaints.

Retail sales grew 13.2 percent in July year-on-year, a slowdown from 14.3 percent annual growth in 2012, and 17.1 percent growth in 2011.

"Consumer sentiment showed no sign of significant recovery, affecting many businesses," said menswear retailer China Lilang Ltd , which has nearly 3,500 stores across China.

"The increase in the overall savings rate indicates that China still has a long way to go to transform into a consumption-driven economy," it said in its earnings statement.

The personal savings of mainland households was about 38 percent of disposable income in 2012, according to economists. The International Monetary Fund said China's urban household savings rate was less than 20 percent of disposable income in the mid-1990s.

China's recently appointed leaders are trying to wean the economy away from the credit and investment-driven growth that powered its break-neck expansion for three decades to a more sustainable model that favors domestic consumption.