Mixed Messages Out of Japan
The world in your hands: An overnight, overseas update.
You turn if you want to. 24 hours after Japan's new Finance Minister appeared to do a 180 on his predecessor's policy by calling for a weaker yen, Naoto Kan did a u-turn on his u-turn today and said currency levels should be set by markets not outside intervention. This change of heart at a news conference came after intervention from Prime Minister Yukio Hatoyama, who rebuked his newly appointed official by saying "the government basically shouldn't comment on foreign exchange." Such an about-face in a country which prizes honor and saving face as much as saving money represents quite a public climbdown. The prime minister has himself been criticized for flip-flopping this week and these mixed messages do nothing to inspire market confidence.
Staying in Japan, I alluded to their aging society being hostage to the past earlier in the week, but now the country is showing us a possible sign of automobiles future. The Toyota (TM) Prius today became the first hybrid electric car to take top spot in overall vehicle sales.
Apparently the key to drumming up interest in something is to pull the plug. After announcing Ragtime would close last Sunday, a subsequent rush of ticket requests resulted in a one week reprieve for the underperforming musical. Similarly, as soon as GM appeared to abandon all hope for struggling Saab receiving a stay of execution, the unit is suddenly awash in 11th-hour activity ahead of today's board meeting to decide the fate of the hot rods from cold Sweden. A 72-year old British billionaire with a boyish haircut and fondness for fast cars has swooped in to challenge Spyker in bidding for the brand.
It's no time to be smug when our own unemployment rate is expected to increase to 10.1% in a matter of hours, but figures released this morning show Europe's16 nation jobless number reaching 10% for the first time. As yesterday's article indicated, the economic environment to our east appears to trending south.
It's been a difficult first week on the job for Japan's new finance head, but Britain's Gordon Brown probably has it worse. In charge of the UK's economy for a decade, the current Prime Minister has faced a renewed leadership challenge earlier in the week. Now today's Wall Street Journal has an ominous A1 article saying "Big Deficits Cloud Britain's Future". Although it's a front page piece, he can at least take some solace in college sports getting bigger billing than a breakdown of one of the world's biggest economies, as this image illustrates.
And finally, China has officially arrived as a financial powerhouse. Not due to its torrid growth and unending buzz, but because its businessmen are now becoming embroiled in the sort of scandals we've been used to in the west for years.
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