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Japan Times
30-06-2025
- Automotive
- Japan Times
Japan's factory output misses expectations as U.S. tariffs hit
Japan's factory output rose less than expected in May, missing analysts' estimates as U.S. tariffs hit the nation's exports, clouding the outlook for the Asian economy as it faces the risk of a technical recession. Industrial production increased 0.5% from the previous month, the industry ministry reported Monday. Economists had expected a 3.5% gain. Output fell 1.8% from a year earlier, missing expectations of a 1.6% rise. Forecasts for the next few months also remained weak, with manufacturers anticipating monthly production to gain 0.3% in June and decline 0.7% in July, according to the release. U.S. President Donald Trump's tariff campaign continues to disrupt global commerce, with abrupt policy changes making it difficult for companies to plan and execute production. "Industrial production is factoring in the impact of tariffs,' said Hideo Kumano, economist at Dai-Ichi Life Research Institute. "There are no signs of major shocks, but production forecasts indicate that there is a gradual downward pressure on production.' Production machinery led the gain in output on a month-on-month basis. Autos, which face a 25% tariff on shipments to the U.S., rose 2.5%. Transportation vehicles excluding cars were the biggest drag, falling 16.3%, with airplane parts leading the decline. Output for steel and nonferrous metals rose 1.9% before Trump doubled the duty on steel and aluminum to 50% in early June. It remains unclear if the baseline duty on Japanese exports to the U.S. will return to 24% from 10% in early July. More than two months into negotiations, Japan has yet to reach a trade agreement with the U.S. as Tokyo targets a complete package that covers sectoral tariffs including its all-important auto industry. Trump characterized trade in cars between the U.S. and Japan as unfair on Sunday, saying that the U.S. can set its trade terms with Japan unilaterally. "The trade negotiations between Japan and the U.S. are likely to drag on,' said Kumano. "Companies are responding by lowering prices to maintain production volume. That weighs on profits, which would weigh on bonuses in the medium to long term. That could in turn have a negative impact on consumption.' Separate trade data for May showed earlier that some companies are cutting costs to keep up the volume of exports in order to stay competitive as U.S. tariffs hit. Car exports to the U.S. fell about 25% by value last month, while declining only 3.9% by volume. Monday's output data, measured by indexes that track manufacturing volumes, don't reflect how the tariffs are affecting production as calculated by value. "The central bank's focus could shift to mounting upside risks to inflation — already fueled by rising food and labor costs, and likely to be exacerbated by still-high oil prices following the Israel-Iran conflict,' Bloomberg economist Taro Kimura said. The tariffs are clouding the economic outlook ahead of a July 20 Upper House election, and the Bank of Japan is watching the impact closely as it mulls the pace and extent of its policy normalization. The BOJ's latest tankan survey, due Tuesday, is expected to show sentiment among large manufacturers has deteriorated.
Reuters
30-05-2025
- Business
- Reuters
STOXX 600 edges down on US trade uncertainties; set for monthly gains
May 30 (Reuters) - European shares dipped on Friday as caution prevailed after a U.S. court reinstated President Donald Trump's tariffs, even as the benchmark index neared a robust monthly gain. The continent-wide STOXX 600 index (.STOXX), opens new tab was down 0.1%, as of 0711 GMT, pressured by a temporary reinstatement of the most sweeping of Trump's tariffs a day after another court ordered an immediate block on them. However, the benchmark index was set for its first monthly advance in three, up 3.8% so far, capitalising on easing trade tensions and the recent U.S. fiscal concerns that forced investors to move away from American assets. On Friday, data showed German retail sales fell by 1.1% in April compared with the previous month. Investors also looked ahead to Germany's May inflation figures, to be released later in the day, that could offer more clues about the European Central Bank's policy decision next week. Among sectors, basic resources (.SXPP), opens new tab was the biggest drag and fell 0.9%, dragged by lower copper prices. The real estate (.SX86P), opens new tab supported the main index by rising 0.8%. M&G (MNG.L), opens new tab jumped 8.2% after it said Japanese life insurer Dai-Ichi Life Holdings (8750.T), opens new tab will take a 15% stake in the British insurer and asset manager as part of a strategic deal.
Yahoo
30-05-2025
- Business
- Yahoo
Japan's Dai-Ichi Life to take 15% stake in UK's M&G as part of strategic deal
(Reuters) -M&G said on Friday it has formed a strategic partnership with Dai-Ichi Life Holdings in which the Japanese life insurer plans to take a 15% stake in the British insurer and asset manager. The partnership is expected to deliver at least $6 billion of new business flows for M&G and $2 billion of new business flows for Dai-ichi Life over the next five years, it said. M&G said it would become Dai-ichi Life's preferred asset management partner in Europe as part of the deal. Dai-ichi Life will have the right to appoint a director to the board of M&G for as long as it holds at least a 15% shareholding, the British firm said. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
CNA
30-05-2025
- Business
- CNA
Japan's Dai-Ichi Life to take 15% stake in UK's M&G as part of strategic deal
M&G said on Friday it has formed a strategic partnership with Dai-Ichi Life Holdings in which the Japanese life insurer plans to take a 15 per cent stake in the British insurer and asset manager. The partnership is expected to deliver at least $6 billion of new business flows for M&G and $2 billion of new business flows for Dai-ichi Life over the next five years, it said. M&G said it would become Dai-ichi Life's preferred asset management partner in Europe as part of the deal. Dai-ichi Life will have the right to appoint a director to the board of M&G for as long as it holds at least a 15 per cent shareholding, the British firm said.
Japan Times
12-05-2025
- Business
- Japan Times
Japan's sputtering economy likely stalled before Trump's tariffs
Japan's economy likely suffered a contraction in the first three months of this year, signaling underlying fragility even before U.S. tariff measures started hitting the country in earnest, according to economists surveyed by Bloomberg. Gross domestic product adjusted for inflation shrank by 0.3% in the first quarter on an annualized basis, according to the median estimate of economists. That result would mean the first quarterly drop in a year. A decline would cast a shadow over both the Bank of Japan's plans to steadily continue with policy normalization and Prime Minister Shigeru Ishiba's election hopes this summer. It also highlights the weaknesses in Japan's economy even before it was hit by stringent tariffs from its biggest security partner, and raises the chance of a technical recession. In the preliminary GDP data due Friday, forecasters expect several factors to be at play. They see a big drag from net exports after a drop in imports gave an unexpected boost in the previous quarter, while consumer spending is seen as remaining stagnant amid elevated inflation. Stay updated on the trade wars. Quality journalism is more crucial than ever. Help us get the story right. For a limited time, we're offering a discounted subscription plan. Unlimited access US$30 US$18 /mo FOREVER subscribe NOW "There's no engine to drive Japan's economy at the moment,' said Yoshiki Shinke, senior executive economist at Dai-Ichi Life Research Institute. "This is even before the Trump tariffs hit. I see a good chance of another quarter of contraction following right after.' Any clear signs of weakness will add to Japanese policymakers' list of headaches amid few signs of Japan and the United States nearing a trade agreement. Commerce Secretary Howard Lutnick last week said "an enormous amount of time' is needed to reach deals with Japan, just as U.S. President Donald Trump announced a framework agreement with the United Kingdom. Friday's data is also likely to support the BOJ's wait-and-see stance. Earlier this month, Gov. Kazuo Ueda's board signaled a one-year delay in its expected timing for reaching its stable inflation target. It also halved its growth outlook for this fiscal year, the biggest cut since the release of the projection in 2023. Following the dovish signs from the latest policy meeting, which ended May 1, many BOJ watchers including Goldman Sachs and Barclays have pushed back their call for when they expect the next rate hike from the central bank. "The BOJ will probably have to wait at least until next year,' said Masamichi Adachi, chief Japan economist at UBS Securities and a former BOJ official. "You can't rule out a chance that the focus for the BOJ shifts to a rate cut by the end of the year.' Japan's biggest companies are beginning to slash their profit forecasts due to the tariffs. Last week Toyota Motor reported that its profits will sink by about one-third this fiscal year compared to last year. The details of the tariffs are "still incredibly fluid, so it's difficult to take steps,' CEO Koji Sato said at a briefing. Shrinking corporate profits will fuel concerns over the sustainability of Japan's inflation-wage cycle. Consumer spending has been lackluster as real wages have been falling for a good part of the past three years as the cost of living overall has risen well above the BOJ's 2% target. "Japan is having its own version of stagflation,' Adachi said. "Consumer spending isn't robust enough to support a moderate recovery on the whole.' Partly due to inflation, Ishiba has seen his popularity drop to the lowest level since he took office in October. Any weak GDP data will likely fuel ongoing political debates over a fresh economic package ahead of a summer upper house election. To be sure, Japan's GDP data have a history of surprises and large revisions. For the preliminary report for the three months through December, the Cabinet Office reported that annualized GDP grew 2.8%, more than double the median estimate of 1.1%, driven by a fall in imports. This time, consumer spending for services could be unexpectedly solid as new service sector data have been showing surprising jumps, Shinke said. Japan's potential growth rate is estimated to be around 0.6%, the lowest among Group of Seven countries, according to the Cabinet Office. That raises the risk of the economy shrinking with even a small shock to the system. An economic contraction last quarter would mark its sixth since 2021, compared with twice in the U.S. "Of course a major risk is being created by Trump — one person. So the outlook could shift dramatically if he changes his mind,' Shinke said. "But it's hard to be upbeat about the economy right now and I can't deny the chance of a recession.'
