[TODAY'S TOP STORIES] from [The Japan Times]
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Household spending up 0.2%
(Kyodo News) Average Japanese monthly household spending rose an inflation-adjusted 0.2 percent in June from a year earlier to ¥277,237 for the second straight month of increase due partly to a rise in expenditures on eco-friendly cars using government subsidies, the government said Friday.
The average monthly income of salaried households came to ¥700,239, down 3.2 percent in real terms, the Ministry of Internal Affairs and Communications said in a preliminary report.
Despite the two straight months of spending increase, a ministry official maintained a cautious view on consumer spending.
"We have not yet moved out of a situation in which household outlays are moving at low levels," a ministry official said.
Expenditures in the transportation and communications sector, including automobiles, rose 7.5 percent due to recently introduced government tax breaks on the purchase of eco-friendly vehicles, according to the ministry.
It said spending on utilities increased 1.1 percent partly because temperatures in the reporting month were relatively high.
In May, average household spending rose 0.3 percent from the year before, up for the first time since January 2008.
The increase was attributed to the cash handout program of up to \20,000 per person and the start of the Eco-point incentive program designed to spur the purchase of energy efficient consumer electronic appliances under the government's economic stimulus measures.
Household spending figures are a key indicator of private consumption, which accounts for nearly 60 percent of gross domestic product.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Nippon Life may log 10% hedge-fund gain
(Bloomberg) Nippon Life Insurance Co., the nation's biggest life insurer, may post a 10 percent return on hedge-fund investments this year as it shifts to strategies better suited to a market recovery.
The insurer, with ¥44 trillion in assets and about \100 billion in hedge funds in the fiscal year that ended March 31, may increase investments in so-called long-short and global macro funds, said Hideya Sadanaga, deputy general manager of the company's Credit & Alternative Investment Department. A 10 percent gain in the calendar year would nearly reverse an investment loss of about 15 percent last fiscal year.
"We're yet to be convinced that what we're seeing is a fully fledged economic recovery globally, so strategies with enough liquidity would be the ones we would be shifting our cash positions to," Sadanaga said in an interview in Tokyo Thursday. "This isn't the time to turn completely aggressive."
Nippon Life will maintain its investments in funds of hedge funds this year in contrast with rivals, including Meiji Yasuda Life Insurance Co. and Tokio Marine Holdings Inc., that plan to reduce allocations and seek steadier returns.
Nippon Life, which has joint head offices in Tokyo and Osaka, began investing in hedge funds in 1998. Global hedge funds posted an average 19 percent loss last year, the most on record, according to Hedge Fund Research Inc. in Chicago. Nippon Life targets an annual return of 6 percent to 7 percent on its hedge-fund investments.
The insurer increased investments in Asia-focused hedge funds to diversify allocations last year, Sadanaga said. It trimmed holdings in credit-related hedge funds and increased cash positions as the collapse of Lehman Brothers Holdings Inc. froze credit markets and worsened the global recession, he said.
Nippon Life "stopped investing new money into hedge funds, but we never reduced our exposure to the industry even amid the entire crisis," Sadanaga said. "In the long run, we realize the importance of diversifying our portfolio as long as we invest in hedge funds, and that goal didn't change."
So-called long-short funds, which bet on rising and falling stock prices, will be an attractive investment amid the recovery in global equity markets, Hiroshi Aikawa, head of the alternative investment office at Nippon Life's Nissay Asset Management Corp., said in the interview. Nippon Life invests in hedge funds through its asset-management unit.
Hedge fund managers are outperforming global benchmarks this year after suffering their worst year on record in 2008. The Eurekahedge Long-Short Equities Index has gained 12 percent in the six months through June, while the MSCI World Index rose 4.8 percent in the period.
Macro funds that wager on trends in stocks, bonds and currencies worldwide will be a good strategy to invest in because it has a low correlation to movements in stock markets, Aikawa said. A measure tracking macro funds has gained 6.6 percent through June, according to Eurekahedge Pte in Singapore.
Insurers' holdings in hedge funds and private equity shrank 10 percent last year to $44.7 billion as companies pared riskier investments amid the global stock decline and slowdown in leveraged buyouts, according to the National Association of Insurance Commissioners, which collects data on firms' U.S. holdings.
Tokio Marine & Nichido Fire Insurance Co., a unit of Tokyo-based Tokio Marine Holdings Inc. with ¥8.4 trillion in assets, said earlier this month it will trim its holdings in hedge funds "slightly" in 2009 from about ¥100 billion at the end of March. To minimize fees and amplify profit, Tokio Marine plans to focus on single-manager funds and shift more of its portfolio to strategies such as macro and long-short equity funds.
Meiji Yasuda, Japan's third-largest life insurer with ¥23 trillion in assets, will reduce its allocation by "several tens of billions of yen" from ¥64.6 billion as of March 31, Shinji Makino, manager of the company's investment planning division, said July 16. Meiji Yasuda slashed its hedge-fund holdings by more than ¥40 billion last year.
Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall. This year they've gained 11 percent through June, according to data compiled by Eurekahedge.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Mizuho books fourth consecutive quarterly loss
(Bloomberg) Mizuho Financial Group Inc., the nation's third-biggest bank by market value, booked an unexpected fourth straight quarterly loss on bad-loan and credit costs.
The \4.5 billion loss in the three months that ended June 30 compares with a \133 billion profit a year earlier, and a \538 billion loss in the preceding quarter, the Tokyo-based bank said in a statement Friday.
Bad-loan and credit charges surged 16-fold to \76 billion from a year earlier as corporate bankruptcies continued to rise in Japan. Mizuho had the lowest core capital ratio of the nation's three megabanks at the end of the previous financial year, according to Macquarie Group Ltd. analyst Ismael Pili.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Oil imports tumbled 8.3% in June
(Bloomberg) Japan, the world's largest consumer of oil after the U.S. and China, said crude imports plunged for a ninth consecutive month in June, as Nippon Oil Corp. and other refiners continued to cut output on weak demand.
Crude oil imports fell by 8.3 percent to 15.4 million kiloliters last month, the Ministry of Economy, Trade and Industry said in a report released Friday.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Household spending up 0.2%
(Kyodo News) Average Japanese monthly household spending rose an inflation-adjusted 0.2 percent in June from a year earlier to ¥277,237 for the second straight month of increase due partly to a rise in expenditures on eco-friendly cars using government subsidies, the government said Friday.
The average monthly income of salaried households came to ¥700,239, down 3.2 percent in real terms, the Ministry of Internal Affairs and Communications said in a preliminary report.
Despite the two straight months of spending increase, a ministry official maintained a cautious view on consumer spending.
"We have not yet moved out of a situation in which household outlays are moving at low levels," a ministry official said.
Expenditures in the transportation and communications sector, including automobiles, rose 7.5 percent due to recently introduced government tax breaks on the purchase of eco-friendly vehicles, according to the ministry.
It said spending on utilities increased 1.1 percent partly because temperatures in the reporting month were relatively high.
In May, average household spending rose 0.3 percent from the year before, up for the first time since January 2008.
The increase was attributed to the cash handout program of up to \20,000 per person and the start of the Eco-point incentive program designed to spur the purchase of energy efficient consumer electronic appliances under the government's economic stimulus measures.
Household spending figures are a key indicator of private consumption, which accounts for nearly 60 percent of gross domestic product.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Nippon Life may log 10% hedge-fund gain
(Bloomberg) Nippon Life Insurance Co., the nation's biggest life insurer, may post a 10 percent return on hedge-fund investments this year as it shifts to strategies better suited to a market recovery.
The insurer, with ¥44 trillion in assets and about \100 billion in hedge funds in the fiscal year that ended March 31, may increase investments in so-called long-short and global macro funds, said Hideya Sadanaga, deputy general manager of the company's Credit & Alternative Investment Department. A 10 percent gain in the calendar year would nearly reverse an investment loss of about 15 percent last fiscal year.
"We're yet to be convinced that what we're seeing is a fully fledged economic recovery globally, so strategies with enough liquidity would be the ones we would be shifting our cash positions to," Sadanaga said in an interview in Tokyo Thursday. "This isn't the time to turn completely aggressive."
Nippon Life will maintain its investments in funds of hedge funds this year in contrast with rivals, including Meiji Yasuda Life Insurance Co. and Tokio Marine Holdings Inc., that plan to reduce allocations and seek steadier returns.
Nippon Life, which has joint head offices in Tokyo and Osaka, began investing in hedge funds in 1998. Global hedge funds posted an average 19 percent loss last year, the most on record, according to Hedge Fund Research Inc. in Chicago. Nippon Life targets an annual return of 6 percent to 7 percent on its hedge-fund investments.
The insurer increased investments in Asia-focused hedge funds to diversify allocations last year, Sadanaga said. It trimmed holdings in credit-related hedge funds and increased cash positions as the collapse of Lehman Brothers Holdings Inc. froze credit markets and worsened the global recession, he said.
Nippon Life "stopped investing new money into hedge funds, but we never reduced our exposure to the industry even amid the entire crisis," Sadanaga said. "In the long run, we realize the importance of diversifying our portfolio as long as we invest in hedge funds, and that goal didn't change."
So-called long-short funds, which bet on rising and falling stock prices, will be an attractive investment amid the recovery in global equity markets, Hiroshi Aikawa, head of the alternative investment office at Nippon Life's Nissay Asset Management Corp., said in the interview. Nippon Life invests in hedge funds through its asset-management unit.
Hedge fund managers are outperforming global benchmarks this year after suffering their worst year on record in 2008. The Eurekahedge Long-Short Equities Index has gained 12 percent in the six months through June, while the MSCI World Index rose 4.8 percent in the period.
Macro funds that wager on trends in stocks, bonds and currencies worldwide will be a good strategy to invest in because it has a low correlation to movements in stock markets, Aikawa said. A measure tracking macro funds has gained 6.6 percent through June, according to Eurekahedge Pte in Singapore.
Insurers' holdings in hedge funds and private equity shrank 10 percent last year to $44.7 billion as companies pared riskier investments amid the global stock decline and slowdown in leveraged buyouts, according to the National Association of Insurance Commissioners, which collects data on firms' U.S. holdings.
Tokio Marine & Nichido Fire Insurance Co., a unit of Tokyo-based Tokio Marine Holdings Inc. with ¥8.4 trillion in assets, said earlier this month it will trim its holdings in hedge funds "slightly" in 2009 from about ¥100 billion at the end of March. To minimize fees and amplify profit, Tokio Marine plans to focus on single-manager funds and shift more of its portfolio to strategies such as macro and long-short equity funds.
Meiji Yasuda, Japan's third-largest life insurer with ¥23 trillion in assets, will reduce its allocation by "several tens of billions of yen" from ¥64.6 billion as of March 31, Shinji Makino, manager of the company's investment planning division, said July 16. Meiji Yasuda slashed its hedge-fund holdings by more than ¥40 billion last year.
Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall. This year they've gained 11 percent through June, according to data compiled by Eurekahedge.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Mizuho books fourth consecutive quarterly loss
(Bloomberg) Mizuho Financial Group Inc., the nation's third-biggest bank by market value, booked an unexpected fourth straight quarterly loss on bad-loan and credit costs.
The \4.5 billion loss in the three months that ended June 30 compares with a \133 billion profit a year earlier, and a \538 billion loss in the preceding quarter, the Tokyo-based bank said in a statement Friday.
Bad-loan and credit charges surged 16-fold to \76 billion from a year earlier as corporate bankruptcies continued to rise in Japan. Mizuho had the lowest core capital ratio of the nation's three megabanks at the end of the previous financial year, according to Macquarie Group Ltd. analyst Ismael Pili.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Oil imports tumbled 8.3% in June
(Bloomberg) Japan, the world's largest consumer of oil after the U.S. and China, said crude imports plunged for a ninth consecutive month in June, as Nippon Oil Corp. and other refiners continued to cut output on weak demand.
Crude oil imports fell by 8.3 percent to 15.4 million kiloliters last month, the Ministry of Economy, Trade and Industry said in a report released Friday.
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