Japan fuel oil-fired power to halve if nuclear energy comes back strong

Japan's use of fuel oil to generate power is set to fall over the next fiscal year to levels not seen since before the Fukushima disaster, if enough of the country's nuclear reactors are allowed back online.

Demand for low sulphur fuel oil has already dropped as Asia's largest listed power utility Tokyo Electric Power Co (Tepco) leads a switch to coal and gas to cut costs.Further falls will push product back into an over-supplied Asia-Pacific market, hitting prices and processing margins already expected to be weak due to refinery expansions in China and the Middle East.
Japan's low sulphur fuel oil imports rose to a 39-year high of 150,600 barrels per day (bpd) in the financial year that ended last March 31, but between April and November 2013 fell about a third from the same period the previous year, according to trade ministry data.
Japan is the largest importer of fuel oil for power use in Asia, taking more than twice the volumes of the next biggest user, South Korea, according to traders.

Source: Reuters

Japan: Tax hike to 10% may come with stimulus package

Economic and Fiscal Policy Minister Akira Amari has signaled the government's readiness to draw up another economic stimulus package if the consumption tax is to be raised to 10 percent in October 2015 as planned.

It is important to make policy efforts to cover the expected slowdown and put the economy back on a path of strong growth by working out a supplementary budget similar to one compiled in preparation for the tax hike to 8 percent, Amari said on a television program Sunday.The government adopted a ¥5.5 trillion stimulus package in December ahead of the tax hike to 8 percent in April and plans to submit a fiscal 2013 extra budget to finance the package to the ordinary session of the Diet to be convened on Jan. 24.
The consumption tax will be raised to 8 percent from the current 5 percent in April in the first phase of a two-stage increase to 10 percent by October 2015 to help deal with surging social security costs in Japan's rapidly aging society.

The Japan News

Toyota's sports coupe unveiled at Detroit show

Toyota Motor Corp. unveiled its boldly designed FT-1 sports coupe concept car on the opening day of the 2014 North American International Auto Show in Detroit on Monday. Toyota hopes that the FT-1 will attract young people partly because of its race car exterior.

Toyota has yet to decide whether to produce a commercial model of the FT-1. It currently sells only one sports car model, the 86, that was developed jointly with Fuji Heavy Industries Ltd.

The Japan News

Suntory to buy U.S. spirits maker Beam for $13.6 bln cash

Suntory Holdings Ltd on Monday said it would buy U.S. spirits company Beam Inc for $13.6 billion cash in a deal that would make the Japanese company the world's third-largest spirits maker.

Including the assumption of Beam's net debt, the deal is valued at $16 billion. It brings together Beam's Jim Beam and Maker's Mark bourbons, Courvoisier cognac and Sauza tequila with Suntory's Yamazaki, Hakushu, Hibiki and Kakubin Japanese whiskies, Bowmore Scotch whisky and Midori liqueur.Once the acquisition is completed, Suntory will become the third largest whiskey company and the fifth largest malt whiskey company by volume, according to International Wine & Spirit Research.
The deal is the latest example of how Japanese beverage companies are seeking to quench their thirst for overseas growth as the population in their home market shrinks.
"All Japanese beverage companies have been focused on getting growth outside Japan," said Bernstein Research analyst Trevor Stirling.
The deal boosts Suntory's market share in the U.S. to 11 percent from less than 1 percent, according to Stifel Nicolaus analyst Mark Swartzberg.
The proposed acquisition is also Japan's third-largest announced outbound deal of all time, according to Thomson Reuters data.
Last year, privately held Suntory floated its food and non-alcoholic drinks company, Suntory Beverage & Food, to raise money for overseas acquisitions. Kirin Holdings Co bought control of Brazil's Schincariol for $2.6 billion in 2011, and Asahi Group Holdings took a stake in Chinese brewery Tsingtao in 2009.

Source: Reuters

Japan PM Shinzo Abe eyes African business ties

Japan should increase its business links with the fast-growing economies in Africa, "the continent that carries the hopes of the world", Prime Minister Shinzo Abe has said.

Speaking in the Ethiopian capital, Addis Ababa at the end of his first tour of the continent, he also pledged to increase aid and investment.Mr Abe said he would increase support for peacekeeping in South Sudan.
His visit is seen as an attempt to rival China's huge influence in Africa.
Mr Abe said Japan's priorities would be the continent's young people and women.
"We will centre the axis of Japan's diplomacy toward Africa on two groups: Young people, who will without a doubt shoulder the responsibility for the future Africa, and women, who will give life to Africa's future generations."
For Africa's women, Prime Minister Abe said that he wanted to provide educational and training opportunities, and to increase school admission rates for girls.
"'Abenomics' will not succeed without 'womenomics'," the prime minister added, in a reference to economic reforms he has introduced in Japan.
As part of the deal, he pledged an aid package of $320m (£190m) for the region, including $3m and humanitarian assistance to support the peace mission in the Central African Republic.

Source: BBC

Asian Financial Forum kicks off in Hong Kong

The Annual Asian Financial Forum in Hong Kong kicks off on Monday. The two day event is themed "Asia: Powering World Growth". Among notable guest speakers, is Hong Kong’s Chief Executive Leung ChunYing. 

These Chinese RMB signs are getting more visible in the city, and many expect a lot more of them in the years to come.

An increasing number of Hong Kong residents now hold Chinese RMBs either for savings or for investment, owing to its stable valuation and steady appreciation.

And as the RMB forges ahead to becoming an international currency, it becomes all the more imperative for Hong Kong to build on its first mover status in the offshore RMB business -- as rivals London, Singapore and Taiwan close in.

And this is what Hong Kong Chief Executive CY Leung highlighted in his keynote speech at the start of the seventh Asian Financial Forum.

Hong Kong’s still got much to do to keep ahead of the game. Savers and investors for instance still have to deal with the limit on RMBs they can exchange on a daily basis. Experts say removing that cap would lead to exponential growth in RMB-denominated products in the city.

Players in the financial industry will be big beneficiaries, says AIA Group, which has sizeable exposure on the Mainland.

Chief Executive and President Mark Tucker is a panelist at the same forum.

Beyond the RMB - CY Leung also spoke of the need to innovate the city’s the financial services industry, through the issuance of Islamic bonds. Hong Kong this year plans to issue sukuks, bonds structured according to the tenets of Islam, in a move to capture a large slice of the more than one trillion dollar market.

All these come of the heels of Hong Kong’s efforts to stay relevant and resilient in the face of competition to stay as the world’s premiere global financial centre of the world. 

Source: CCTV

Chinese yuan hits record high against USD

The Chinese yuan climbed to a record level against the U.S. dollar on Monday. 

The People’s Bank of China set an all-time high midpoint at 6.0950, 0.1 percent stronger than the previous trading day. Traders expect the yuan’s robust momentum to continue with 2 to 3 percent appreciation seen for the year. That’s due to improved fundamentals and a trade surplus in China. However, volatility is poised to increase because China has started wide-ranging reforms to liberalize its financial markets. The central bank also may soon widen the yuan’s daily trading band.

China’s strong currency also reflects weakness in the U.S. dollar due to surprisingly soft employment data. American employers hired the fewest workers in nearly three years in December.The hiring retreat raises doubts as to whether the U.S. Federal Reserve will continue to cut the size of its bond purchases, dragging the dollar index.

Source: CCTV

China's first RQFII ETF launched in London

China's first RMB Qualified Foreign Institutional Investor or RQFII exchange traded fund was launched at the London Stock Exchange on Thursday. Just how important is its launch for European investors to access China's domestic market.

Investors across Europe are now able to invest into China's A share market, through the first RQFII exchange traded fund. The ETF for Renminbi qualified foreign institutional investors was jointly launched by Chinese asset management firm CSOP and London-based company Source on Thursday. The fund will track 50 best performing companies in the Chinese mainland.

"So the allocation for the RQFII scheme is 80 billion RMB. So this one is the, after Hong Kong and Singapore, definitely the first city of the Europe grant for this RQFII scheme quota. So Europe became, London is the first one," Jessie Pak, Managing Director for Asia of Financial Times & Stock Exchange, says.

The 80 billion yuan Pak mentioned was the initial yuan investment quota China agreed to grant to the UK back in October 2013. The launch of the ETF is seen to strengthen London's position as a centre for offshore RMB transaction.

"So I think that actually is very important for the European market, because the RQFII scheme provide very good equity, so we will see that will further strengthen the London Source exchange and also the UK market," Pak says.

CSOP has a 30 billion yuan, or 5 billion USD worth of RQFII quota. The new EFT will be traded in dollars and pounds, but settled in yuan. The fund has already received subscriptions totalling 230 million US dollars.

Source: CCTV

Virgin SpaceShipTwo sets new altitude and speed records

 Virgin Galactic SpaceShipTwo (SS2) continues to inch toward a full suborbital test flight with its third supersonic test carried out Friday morning. The SS2 rocket engine fired for 20 seconds, pushing the suborbital spacecraft to an altitude of 71,000 ft (18 km) and a top speed over Mach 1.4, both of which were new records for SS2. The Reaction Control System, feather re-entry system, and a thermal protection coating were successfully tested during the flight.
Among other firsts, this was the first SS2 powered flight on which Virgin Galactic's Chief Pilot Dave Mackay was in command. Mackay's co-pilot was Scaled Composites' Test Pilot Mark Stucky, who had been the pilot on the first two supersonic test flights.
SS2 was lifted by the double-fuselage White Knight Two carrier airplane to a height of 46,000 feet (11.7 km). At that point, SS2 was dropped, and its hybrid rocket engine, capable of delivering a thrust of 60,000 lb (267 kN) for a period of 70 seconds, was fired for 20 seconds, for a top speed in excess of Mach 1.4 and a peak altitude of 71,000 ft (18 km).
The primary SS2 systems tested during this flight were the Reaction Control System (RCS) and a new thermal protection coating for the feathering fins. When an airplane is flying in the atmosphere, it controls its attitude using ailerons, elevators, and the rudder. Additional stability is provided by the wings and tail, which tend to keep the airplane flying in a constant direction.

When flying a vehicle into space, an altitude is reached after which the various airfoils have no effect on the direction or orientation of the vehicle. The RCS takes over this function. Attitude control is established using a system of thrusters (essentially small rocket engines) directed by an inertial stability control system. The RCS system test provided additional data for use in optimizing the system.





Source: Gizmag

625-hp Z06 Corvette debuts in Detroit

One of GM’s greatest gifts to man has always been bountiful offerings of torque. Nowhere in its vehicle line-up has torque been more plentiful than in the Z Corvettes. Now with the new 2015 Z06 unveiled at NAIAS 2014 in Detroit, torque junkies are set to truly get their 635 lb-ft (816 Nm) fix on.

The 2015 Corvette Z06, sporting a new 8-speed gearbox and 625 hp has clearly been designed with the dietary mandate of chase down and eat any foreign exotics that come across the plate. To accomplish this GM has gone and delicately placed into the forward engine bay, one brand spanking new 6.2-liter, supercharged V8. This new engine will deliver 625 hp via the new 8-speed automatic transmission with paddle shifters or a 7-speed manual. Now manual snobs can get their shift on the old fashioned way if desired.

But the one thing Americanized V8s have always been good at is developing gobs and gobs of torque. Spitting out 635 lb-ft (816 Nm) of torque to the rear wheels gives the new Z06 significantly more torque than a Ferrari 458 , McLaren 12Cand roughly 35 lb-ft more than Chrysler’s latest Viper.

According to GM, the Corvette’s new LT4 engine gets some of its improved power output from a newly designed 1.7L Eaton R1740 TVS supercharger. Unlike turbochargers powered by exhaust gasses, the supercharger is driven directly by the engine. Capable of spinning up to 20,000 rpm, the new blower not only spins 5,000 rpm faster than the ZR1 LS9 supercharger, but is faster to boost, meaning quicker acceleration and less lag. GM is also quick to point out that, even with the new supercharger in place between the cylinder heads, the entire thing only adds roughly an inch to the overall engine height.

With the new engine delivering 37 percent more power and 40 percent more torque than the Stingray’s LT1 engine, GM had to shore up key engine elements to properly deal with the higher twisting forces and pressures. New aluminum cylinder heads and forged aluminum pistons were incorporated to better dissipate heat and handle pressures in the cylinder chambers with 10:1 compression ratios and increased supercharged inputs. A dry-sump oiling system is also in place to keep the engine profile to a minimum.

So with the boring power bits out of the way, what else has GM done to the Z06 to make it hyper-fantastic. Well that new 8-speed autobox, configured using aluminum and magnesium, features four gearsets and five clutches and is 8 lb (4 kg) lighter than Stingray’s 6-speed, while taking up roughly the same space. GM also reports the new autobox will throw out upshifts 8-hundredths of a second faster than the dual-clutched Porsche 911.

But with all that power comes great torsional responsibility, which is why GM has leveraged much architectural greatness from the new Stingray. The new Z06 will use the same aluminum frame as the C7R track racers, but because of the increased frame design the car will now feature a removable, carbon fiber roof panel. With the roof panel in place the Z06 is 60 percent stiffer than its predecessor.

Another fancy old school trick to better handle torsional power is the inclusion of an all carbon-fibere torque tube.

In order for the car to work as a cohesive package and manage new power outputs, GM had to fit out the car with bigger tires. At 1.5 inches (38 mm) fatter on the front with P285/30ZR19s and 2 inches (51 mm) on the back with 335/25ZR20s, the team had to beef out the haunches accordingly. So the car isn’t just made wider to look meaner, it’s part of a functional mandate where fenders now accommodate bigger tires and larger vent treatments provide increased cooling to brakes, the gearbox and engine bay.

Other design elements like a redesigned front fascia and grille, air blades and larger vents all work in partner to increase cooling and downforce.

Source: GM,Gizmag

WSJ: Rebalancing of commodity indexes supports prices of Gold and Silver

   According to a report from the Wall Street Journal,"gold and silver futures surged as an influx of new investors and the rebalancing of two major commodity indexes bolstered prices''.

Gold for February delivery, the most actively traded contract, was recently up $20.60, or 1.7%, at $1,222.90 a troy ounce on the Comex division of the New York Mercantile Exchange.

Silver for March delivery, the most active contract, was up 64 cents, or 3.3%, at $20.010 a troy ounce.

The first day of the new year brought a flurry of investors to the precious-metal market as portfolio managers allocated cash across the spectrum of different assets, said Graham Leighton, a precious-metals broker with Marex Spectron in New York. Mr. Leighton said markets often see increased activity at the start of a month, but "at the start of the year there tends to be more money coming in than any other month."

The rebalancing and re-weighting of the Dow Jones UBS Commodities Index also provided support to gold and silver. The index raised its allocation to gold and silver for 2014 from 2013, and funds that track this index must recalibrate to the new allocations in January.

"This rebalancing is going to create some buying for the first week or so, or at least support the market," Mr. Leighton said. Roughly 1.5 million to 1.8 million ounces of gold and about 50 million ounces of silver will be bought as a result of the index shifts, he said.

Samsung Galaxy NotePro

At CES 2014, Samsung unveiled a business-centered version of its Galaxy Tabs, the Galaxy  TabPRO, which is available in three sizes. But the new slate the company seemed most amped to promote is the companion Galaxy NotePRO, which comes only with a 12.2-inch display. The Samsung S Pen stylus is also included, along with a suite of productivity apps and features designed to take advantage of the combination of a stylus and the NotePRO's 2560 x 1600 resolution screen.

Nonetheless, for uses suited to a large touch screen and a stylus, the NotePRO could be the best thing going. It also has the ability to split the screen between four apps at once for serious multitasking. This feature is also part of the TabPRO, but the NotePRO with its S Pen seems much better suited to take advantage of this feature.

Other S Pen features provide handy shortcuts, like the ability to take notes on the fly, write on screenshots, and quickly save content in a scrapbook.

Also included in the package are pre-loaded meeting apps like WebEx and prepaid subscriptions to premium business apps like Bloomberg BusinessWeek+ and NY Times.

No word yet on how much the NotePRO will cost, but Samsung says to expect it sometime this quarter.

Source: Gizmag

Global shares fell as weak earnings pre-anouncements in the U.S. fuel worries about valuations

 Global shares fell on Tuesday as weak earnings pre-announcements in the United States fuelled worries that the upcoming reporting season may disappoint, leaving some indexes looking expensive after a bumper 2013.

The dollar steadied against a basket of six major currencies <.DXY>, bouncing from its lowest level since Jan. 2 after a two-day drop sparked by much a weaker-than-expected U.S. jobs number on Friday.

All major European stock indexes fell after a batch of U.S. companies posted weak earnings or forecasts on Monday. Underscoring concerns, JPMorgan Chase reported lower-than-expected earnings per share on Tuesday, sending its shares slightly lower in pre-market trade.
Almost 10 of every 11 earnings pre-announcements for the current earnings season from companies in the U.S. S&P 500 <.SPX> index have cut estimates, Thomson Reuters data showed.

"The absence of good news in the fourth quarter reporting season is likely to be a headwind for the market," said Daniel McCormack, a strategist with Macquarie.

The FTSEurofirst 300 <.FTEU3> of pan-European shares was down 0.4 percent at 1158 GMT, with the broader MSCI World index <.MIWD00000PUS>, which tracks shares in 45 countries, also down 0.4 percent at 402.52 points.

U.S. stock index futures pointed to a flat-to-higher start for the cash market after the worst one-day fall since November for the U.S. S&P 500 <.SPX> index.

After the S&P 500's jump of almost 30 percent last year, its forward price-to-earnings ratio is the highest in nearly seven years. Investors are weighing the risk of paying such a high premium for earnings that may see growth stall.

"Earnings and outlooks have to be good for us to continue to go up," Nick Xanders, head of strategy at BTIG in London, said.

After falling in the previous two days, the dollar was in steadier form on Tuesday. It regained half a percent against the yen after shedding more than 1 percent on Monday.

Dollar/yen was one of the strongest-performing major currency trades last year. Many hedge funds have been betting the trend will continue as the Federal Reserve cuts back its bond-buying programme while the Bank of Japan remains committed to providing stimulus.

"Given the extent of positions in the market and continued softness in U.S. yields this week, USD/JPY could continue to test lower near-term," analysts at BNP Paribas wrote in a note.

The greenback fell for a fourth straight session against the euro, however, after European Central Bank official Ewald Nowotny said on Tuesday euro zone growth may surprise on the upside this year.

Over the past six months, the single currency , up 0.04 percent at $1.3677, has been supported by asset inflows, fuelled by stronger data from the euro zone's struggling periphery, particularly Spain and Italy.

Spanish bonds held steady on Tuesday as data showing the country's economy grew at its fastest pace since 2008 in the last quarter of 2013 supported underlying demand ahead of debt sales this week.

Source: Reuters

WSJ The Disinflationary Legacy of Weak Global Consumer Demand

According to a report from the Wall Street Journal,""We’re given a reminder of the disinflationary effect weak global consumer demand, with price data from both France and the U.K. falling short of expectations. That weakness was not only manifest in the consumer durables component of the euro zone’s industrial production numbers but was also partly evident in Japan logging a second-straight current account deficit, which has been fueled by a shift to deficits in its trade account"".

As countries such as Japan and China go through a profound rebalancing and seek to shift their economies more to depend more on domestic drivers, the slack is not being met by demand from Europe or the U.S. Indeed, even though the American economy is recovering, its growth has been accompanied by a somewhat anomalous shrinking in its trade deficit, which leaves exporters in Japan and China in the lurch. Overall, these deficiencies exert downward pressure on consumer prices even as policy stimulus has bolstered asset prices, seen both in last year’s sharp run-up in advanced-country stocks and in various housing markets, such as the U.K.’s.  In part, the pullback in stocks that we’ve seen so far this year captures a sense that there’s only so much earnings growth that can be extracted from low interest rates and supply-side improvements if that base of global consumer demand doesn’t pick up. 

In France, December consumer price index up 0.3% on the month 

November current account deficit was 1.9 billion euros down from €2.0 billion in October.

November’s CPI numbers raised concerns that France was sliding into deflation, especially amid the economy’s struggles. Those fears haven’t entirely been cleared away by a modest uptick in prices in December, though a few positive points of economic data in recent days, including strong year-end car sales, suggest a stabilization of prices rather than an imminent downward spiral. A slightly narrower current account position adds little to that overall economic picture of improvement too. 
U.K. December Price Index up 2% on the year  against expectations of +2.2% and down from +2.1% in November. Core CPI was up 1.8% on the year, in line with expectations.

–December producer price index, output prices up 1.0% on the year, in line with forecasts; input PPI was down 1.2% on the year against forecasts for a 1.6% fall.

–November house prices were up 5.4% on the year versus +5.5% in October.

For the first time in four years, the U.K.’s consumer price index hit the Bank of England’s 2.0% target. With pipeline pressures muted and deflationary pressures elsewhere, economists will undoubtedly start worrying about CPI undershooting over the coming months. But the economy’s strength and rising house prices should mitigate those fears. At the same time, sterling’s rally seems to have run out of steam which should remove another downward inflationary force.

 Euro Zone November industrial production rose 1.8%  on the month and was up 3% on the year against expectations of +1.4% and +1.8%, respectively. The same measure was down 1.1% on the month and was up 0.2% on the year in October.

The gains in euro-zone industrial production were broad-based, though Italy’s pickup was relatively modest. Greece was an exception, registering a decline. The strength was led by capital goods and non-durable consumer goods. Durable consumer goods manufacturing shrank, consistent with continued weak consumer sentiment. 

U.S. retail sales rise 0.2% in december

Sales at U.S. retailers rose 0.2% in December, as Americans stocked up on food and drinks for the holidays, bought more clothes and boosted purchases online, according to government data issued Tuesday. The increase would have been 0.7% excluding the large auto sector, whose sales tapered off in December after hitting a post-recession high in the prior month. Retail sales account for about one-third of consumer spending, the main engine of economic growth. Economists polled by MarketWatch had forecast sales to fall 0.1% overall but rise 0.4% excluding autos. The sales increase for November, meanwhile, was lowered to 0.4% from 0.7%, the Commerce Department  said Tuesday. And the increase for October was trimmed one-tenth to 0.5%. The downward revisions in sales are likely to spur some economists to cut growth forecasts for the fourth quarter. In 2013, retail sales rose by 4.2%, the smallest annual gain since the recession ended.

Source: marketwatch