The Gross Domestic Product (GDP) of Japan shrank by 0.9 percent in the first quarter – twice as powerful than expert expectations. Calculated on an annual basis, it makes a drop of 3.7 percent, the government said in Tokyo. Analysts predicted a decrease of 2%. Since GDP also reported a decline in the previous quarter, according to country definitions is back in recession. The Asian country out of the previous major depression following World War II until the second quarter of 2009 earthquake and subsequent tsunamis and the nuclear accident in Fukushima nuclear power plant is expected to throw the country into even more serious crisis. Experts fear that the economy will stagnate and in the current quarter, because the consequences of the earthquake still loaded production and exports. The Japanese Economy Minister Kaoru Yosano said, however, a temporary phenomenon. The decline in GDP was mainly due to the effects of the earthquake. Japanese economy really will remain weak for some time. But she had the strength to stand fast back legs. Supply chain industry gradually stabilized and recovery is expected to stimulate the economy. Yosano confirmed the forecast of government, which expects to start in April fiscal year grew by just under one percent.
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The Chinese inflation slows in April, and this, combined with some other economic indicators signal a cooling economy. This fact in turn would alleviate pressure on the authorities in Beijing to keep a tighter monetary policy and currency. In April, the appreciation of life in China is 5.3 per cent per annum. A month earlier, inflation reached 32-month high of 5.4 percent. Thus, signals appear that in the second half of 2011 can expect a weakening of inflationary pressures, analysts. Food prices, which are a major driver of inflation generally fell by 0.4 percent in April on a monthly basis. Annual increase was reported by 11.4 per cent. The official target of government is the annual average inflation in 2011 should not exceed 4 per cent. For this purpose, since October the central bank increased the base rate four times and the minimum reserve requirements were very high. In industrial production and retail sales data are also published today, is reported greater than expected slowdown. These are additional signs that economic growth will cool. The industrial production growth reported by 13.4 percent yoy in April, after one month earlier was moving with an increase of 14.8 per cent. Expectations index were to rise by 14.7 per cent. The retail sales are also slowing its growth – from 17.4 percent in March to 17.1 percent in April. If the projections were for speeding up the increase to 17.6 per cent yoy.
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The stock market indexes in Asia and the Pacific suffered losses for the third consecutive session today in line with the red wave that flooded the financial markets yesterday in the U.S. and Europe. The reason for this was the decision of the credit rating agency Standard & Poor’s to lower its assessment of the prospect of U.S. government debt to negative. This is a sign that the largest economy in the world could soon lose its highest investment grade. Fall in oil and metals brought losses of energy and mining companies, and the losers among stocks in the composition of the regional index MSCI Asia Pacific were those of the Japanese carmaker Toyota. The Tokyo Stock Exchange’s Nikkei 225 lost 1.2 percent to 9 441.03 points, after it became clear that in March the attitudes of Japanese households in the economy significantly worsened. S & P / ASX 200 slid 1.4 percent to 4 793.30 points, led by mining companies. The shares of the technology sector also fell after the financial results for the first quarter, the largest maker of analog chips in the world – U.S. Texas Instruments, proved weaker than market expectations. The wide Chinese Shanghai Composite Index slid 1.9 percent to 2 999.04 points and Hong Kong Hang Seng fell 1.3% to 23 520.60 points. Economic data for China showed that FDI in the country increased by 33% in March to 12.5 billion dollars. In the first quarter registered improvement from 29% yoy. Meanwhile, the HSBC Bank published its index of business activity in the factory sector in the country, which remains at a level of 51.8 points for the second consecutive month in April.
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The Gold-currency reserves of South Korea rose to new record levels in March, surpassing its dollar equivalent of the previous two months. The main buffer in the country against possible financial turmoil lasting approaching $ 300 billion. In March, the dollar value of official gold-currency reserves amounted to 298.62 billion dollars. This is 950 million dollars more than the previous record of 297.67 billion set in February. South Korea’s reserves fell to just over $ 200 billion in November 2008 when the central bank is using some of them to combat the shortage of liquidity when credit dried up during the global financial crisis. Since then, however, foreign exchange reserves of South Korea are rising steadily. Foreign exchange reserves are a key instrument of economic and monetary policy to protect the currency from speculative attacks, while can be used to provide liquidity and strengthening the financial system. The central bank of South Korea indicate that the appreciation of the euro and other currencies in their reserve currency causes an increase in dollar equivalent of the reserves. The South Korean government sees its reserves a key tool for protection against financial instability. The Asian country is particularly sensitive after the Asian financial crisis of 1997-98, when received to be considered as degrading of the public international rescue.
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The indexes in the Asian and Pacific region came in positive territory in today’s session amid reports that some prisons for tsunami and earthquake in Japan’s factories will soon resume its activities. The regional index MSCI Asia Pacific rose strongly by 1.3 percent to 134.84 points and is on track to finish today’s session at its highest level since the earthquake on March 11 onwards. The shares of Hitachi rose nearly 9% on the Tokyo Stock Exchange after it became clear that the main factory of the manufacturer of consumer electronics in the country will reopen in April. A strong presentation and the second largest construction company in Hong Kong – Cheung Kong Holdings, because of strong expectations of financial results for 2010 As a result, its shares rose 2.6 percent on the stock exchange in Hong Kong. The leading stock index in Japan, the Nikkei 225 rose strongly by 2.6% to 9 708.79 points, which helped and good data on the increase in industrial production in the country in February. The shares of the third-largest car company in the country Nissan Motor rose 3.8 percent after its management announced that by the end of June activities in its factories in Japan will return to their normal pace. The Hang Seng added 1.7% to 23 451.40 points, while South Korea’s Kospi rose 0.9 percent to 2 091.38 points. The Australian Index S & P / ASX 200 rose 1.4 percent to 4 822.20 points, led by mining companies, and broad Chinese Shanghai Composite Index ended the session almost unchanged.
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Fighting the inflation is a key economic priority for China this year because the government aims to limit the risk of social unrest, Prime Minister Wen Jiabao in a speech to the country conditions.
“We can not afford the price increases to affect the normal life of people with low incomes,” said Wen in the report the annual meeting of The Chinese meeting of MPs in Beijing today. “This problem affects the welfare of the people has common interests and concerns social stability.”
The 64-year-old Wen confirmed targets 4 percent inflation for the whole year and 8% growth against attempts by the Communist Party to provide support for the 61-year rule. Over the past two weekends government sent hundreds of police in Beijing and Shanghai after the Internet calls for protests, inspired by bunks in the Middle East and North Africa.
“Inflation has the potential to trigger social unrest,” said Liu Li-Gang, an economist at Australia & New Zealand Banking Group in Hong Kong. The government should increase interest rates on loans and deposits by 0.75 percentage points by year’s end, and to raise wages and to grant aid the poor, he said.
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Come to an end the era of cheaper clothes. Over the past decade, prices of clothing reported a decline as low inflation and cheap labor in many countries have made it possible to reduce costs. To cut prices during a recession, retailers and manufacturers have reduced unnecessary items and experiment with new configurations of tissues. Amid the global economy recovers and demand growth, however, the appreciation of labor and raw materials pressed retailers and manufacturers already exhausted ways to reduce costs. In the last year the cotton rose more than twice, reaching a record peak, while prices of some synthetic fibers increased by about 50 percent against the background of increasing demand for alternatives and new compositions. It is expected in the coming months, prices of clothing increased by around 10 percent, the strongest price rises will be in the second half of the year, says an expert. Late last week the price of cotton reached a maximum of 150 years, rose to 1.90 dollars per pound (453.6 grams – editor’s note.), Which is almost twice the price of raw material during the same period last year, says industry organization. The cotton began to become more expensive in August 2010, after bad weather affected crops in major producing countries including China, USA, Pakistan and Australia.
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The Chinese government announced that it would strengthen controls over the projects for mergers and acquisitions by foreign companies in order to “safeguard national security” – an initiative that could limit the ambitions of some companies from abroad. The Chinese government said it will establish a body to examine foreign investment in the national defense, agriculture, energy, natural resources, infrastructure, transport, technology and industrial facilities. This body will be placed under the control of the National Development and Reform and the Ministry of Commerce, reported on your site Chinese government. The foreign investment will be judged according to their economic and social stability of China and the country’s ability to continue research and development activities concerning technologies relating to homeland security, noted in the message. The country is realizing good financial policy and just a few months ago was claimed as a second economy force in the world.

The biggest carmaker in the world – Toyota, plans to cut its Board of Directors at least to 17 people from the current 27, said in Bloomberg two persons familiar with the company’s plans. This is the largest reorganization in the Japanese company for the past eight years, the goal is to improve the process of decision-making after a series of recalls of defective cars from the market. Toyota currently has 27 directors, including chairman, president, six vice presidents and 15 executive managing directors. The Board of Directors decreases will affect the number of executive vice president, shared the familiar, the changes will probably occur early in April, before the general meeting in June. Eight years ago, Toyota has reduced the number of Directors from 58 to 27, to accelerate decision making. The leading car manufacturer in the world take its largest reorganization in the last eight years. The company made serious financial loses from the turn back cars for fixing some small mistakes in the control systems of more than 10 million cars.

The stock market indexes in Asia and Pacific region rose significantly in today’s session, following the good performance of U.S. markets in yesterday’s trading. The regional index MSCI Asia Pacific jumped 1.3 percent to 139.25 points, marking the strongest performance since December 2. Index erase its loss this year due to improved investor sentiment about the world economy. The shares of Toyota Motor rose 3.3 percent on the Tokyo Stock Exchange after the data increased its U.S. sales in January. Mitsubishi Electric’s profit of 45.6 billion yen (560 million dollars) in the last quarter of 2010 helped by a strong 7.4 percent jump in share prices. It is well known and mining companies led by BHP Billiton, because of rising metal prices. All major stock indexes in the region rose in today’s session, while financial markets in China, Taiwan and South Korea were closed for national holidays. Japan’s Nikkei 225 has managed to add 1.8% to 10 457.40 points, while Hong Kong’s Hang Seng rose 1.8 percent to 23,909 points. The Stock Exchange of Singapore Straits Times rose 0.8 percent to 3 211.12 points, before closing tomorrow because welcome the lunar New Year. In India BSE Sensex 30 rose 0.4 percent to 18 100.30 points after strong declines in the previous four sessions. The stock exchanges in China, Hong Kong, South Korea and Singapore will be closed tomorrow because of holidays, while those in Taiwan and Vietnam do not work over the last seven days.
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