US & World News

The irritation expressed Tuesday by the Japanese government to face the rise of the yen was not enough to stem the surge in the yen, which hit new highs against the dollar and euro.

Japanese Prime Minister, Naoto Kan, said he wanted to think about measures to curb the yen's appreciation, taking into account, among other factors, the result of a meeting of central bankers, reported the Jiji Press.

It did not specify which meeting he was referring but central bankers must be found from Thursday to Saturday in Jackson Hole, in the U.S. state of Wyoming.

The Japanese Minister of Finance, Yoshihiko Noda, said his side to the press that Japan would act appropriately to currency movements on the basis of statements of the G7.

Last October, members of the Group of Seven had said currency movements were erratic and excessive negative implications for economic stability and would cooperate as appropriate in this area.

NEGATIVE IMPACT ON THE ECONOMY

The Minister of Finance has used a rhetorical firmer, ensuring close look at the evolution of exchange and believing that recent developments were clearly "unfair".

"The excessive and disorderly developments of the currency could have a negative impact on the stability of the economy and financial system," he said.

The markets have nevertheless interpreted his refusal to comment on a possible intervention as a sign that Japanese authorities are not yet ready to act, pushing the dollar to a new low of 15 years against the yen at 84.34 yen on the platform EBS transaction, and the euro to a nine-year low around 106.14 yen.

"The market will test the ability of the Japanese authorities to intervene, and, unless they take an actual decision, the dollar will move towards the 80 yen.The Japanese economy will suffer greatly, because American and Asian economies slow, "said Paul Robson, currency strategist at RBS Global Banking in London.

Since the beginning of the year, the yen has appreciated by nearly 10% against the dollar, penalized by the rising concerns about the strength of the recovery in the United States.

The Japanese authorities have repeatedly tried to control this increase, fearing that a strong yen would penalize exports and could weaken a fragile economic recovery.

But traders were skeptical about a possible intervention in the markets of Tokyo, and further suggest that coordinated action with partners in the G7 seems highly unlikely.

However, an easing of monetary policy appears to be a possible scenario.

According to sources familiar with the matter, the soaring yen has slightly increased the chance until now very low, before an easing of monetary policy meeting scheduled for September 6 and 7.

But such an inflection remains far from certain because some officials of the Bank of Japan expect to have evidence proving the impact of the stronger dollar on the economy.

"The markets expect an attitude and a more determined response. But they just verbal intervention, and again," said Hiroichi Nishi, general manager of the branch shares in Nikko Cordial Securities.

Sequana reported a net profit of 6 million euros in the first half and confirms its target of operating performance in 2010 than that of last year.

The group diversified paper, which has returned to profitability in 2009, said in a statement that the third quarter continue its policy of raising prices, already implemented during the first six months of the year.

This price increase will allow the group to offset rising raw material costs.

"The policy of increasing operating margins and debt reduction will be continued in the second half," says Sequana.

In the first six months of the year, the stationer has reached a turnover up 3.8% to 2.14 billion euros.

Its net debt stood at 670 million euros at end-June 2010, down from 732 million a year earlier.

"The policy of increasing operating margins and debt reduction will be continued on the second half," advised Sequana.

The action Sequana closed Tuesday at 11.50 euros. It is up 44% since the beginning of the year.

The Dutch chemical group Akzo Nobel announced that it will continue to monitor its costs despite having already reached its 2011 margin target and announced quarterly results exceeded expectations.

Around 7:15 GMT, Akzo Nobel has risen by 3.33% to 45.765 euros, while the index grouping the European chemical values yielded 0.34%.

The first painting company in the world said it had reached its goal in the second quarter EBITDA margin for 2011, set at 14%.

Its earnings before interest, taxes, depreciation and amortization (EBITDA), excluding items, rose to 614 million euros, thanks to rising demand and cost reduction.

The nine analysts polled by Reuters had expected a net profit of 576 million euros. During the same period the previous year, the group had reported an EBITDA of 506 million euros.

"The developed markets remain difficult. The pressures on prices of basic materials and shortages are expected to continue in the third quarter.We will keep a watchful eye on the market environment and the costs will continue to be managed aggressively, "said Chief Executive Hans Weijers, in a statement.

The chief financial officer Keith Nichols said it expected an increase in material prices between 4% and 5% this year but it believes that the situation should start to improve from the end of the third quarter, which should not threaten margins.

Akzo Nobel said it would inform investors of his future ambitions September 28 in London.

In the second quarter, its revenue increased 13% to 3.9 billion euros, exceeding analysts' expectations which projected sales of between 3.58 and 3.8 billion euros.

U.S. rivals PPG and Sherwin-Williams also beat the consensus in the second quarter but they were cautious for the remainder of the year.

His rivals in the Benelux, DSM and Solvay, must publish their quarterly Thursday and Aug. 3, respectively.

Retail sales in the euro area rebounded in May after heavy fall in April, despite the credit crunch which has affected consumer confidence, show statistics released Monday by Eurostat.

Retail sales in the 16 countries adopting the single currency rose 0.2% after a decline of 0.9% the previous month (revised from -1.2%), but show an unexpected increase 0.3% over one year, after -0.5% (revised from -1.5%) recorded in April.

Economists polled by Reuters had forecast an average increase of 0.4% a month to month and a decline of 0.3% over one year.

Eurostat said that sales of food, beverages and tobacco rose 0.2% in May and 0.3% compared to last year.

For non-food products, the increase was 0.4% compared to April and 1.0% over one year.

Bank of China, one of China's four largest banks, announced its intention to undertake a capital increase, the amount could reach 60 billion yuan (7.0 billion euros).

The bank offers to shareholders to obtain up to 1.1 Right to subscribe for 10 shares held.

"All the products of this rights issue (…) should enhance the bank's balance sheet and improve the ratio of financial solvency of the bank," she says in a statement.

This announcement does not specify whether the parent Public Bank, Central Huijin, subscribe to this offer.

In Hong Kong, under the BoC was trading at 3.97 Hong Kong dollars Wednesday, and he treated at 3.4 yuan in Shanghai on Friday before the suspension of trading.

MASSIVE CAPITAL RAISING

The bank, which raised 4.7 billion euros last month by issuing convertible bonds in Shanghai, is looking like its main rival China to strengthen its balance sheet and to comply with the stringent requirements of regulators in terms of ratios solvency.

Agricultural Bank of China (AGBANK), China's third largest bank, has launched its next capital increase of almost 16 billion euros via an IPO in Shanghai and Hong Kong.

According to local press, Chinese authorities have given their approval to raise capital totaling 287 billion yuan (33.6 billion euros) for the four largest banks.

In recent months, Industrial and Commercial Bank of China and China Construction Bank have also announced increases in capital.

Bank of Communications, the fifth-largest bank, raised its next 2.0 billion euros in Shanghai.

Retail sales fell in Spain in May, their second consecutive month of decline, a trend that could jeopardize the growth of the economy in the second quarter.

This decrease of 1.9% compared to May 2009 when adjusted for seasonal variations made after the fall of 2.4% in April, said the National Institute of Statistics (INE).

This further decline is partly due to segments of the consumer electronics and power.

Retail sales in Spain had increased in March for the first time since November 2007.

The renewed weakness in consumption could undermine the government forecasts a growth in gross domestic product (GDP) in each quarter this year after recovering from recession in the first three months.

"The retail sales figure is wrong and shows that people are worried about the future. The demand is low because people increase their savings," said Mariano Alierta M & G Valores.

"There are many uncertainties and we can expect continued weakness in retail sales until the job prospects are improving."

Leaders of major industrial nations and major emerging countries meet Sunday in Toronto with a challenge to coordinate their policies to make sustainable global economic recovery, they speak in jumbled order.

The G20 will also take stock of their efforts to regulate banks and markets, a stated priority in their previous meetings to ensure that the financial crisis of late 2007, which degenerated into an unprecedented global depression since 1929 not recur.

This is the fourth summit meeting of the group since the end of 2008 in Washington at the height of the crisis.

Composed of the United States, its major European allies, Japan and also China, Brazil, India and Russia, the G20, which accounts for 80% of world trade, has meanwhile become the main forum international discussion on economic and financial issues.

If the recession, which was fought by hundreds of billions of dollars of public money, now belongs to the past, the challenge now is to consolidate growth globally still considered fragile.

In this context, the United States, joined by other countries such as India, have expressed concern in public policies to reduce their deficit announced by several European countries precipitated by the financial storm that nearly won Greece, one of most indebted nations.

SAME PURPOSE

The approach of the G20, which was preceded by a G8 summit in rural Ontario, has nevertheless been marked by a desire for peace between the two sides of the Atlantic.

"We are aiming the same direction, that of a long-term sustainable growth that puts people at work," said U.S. President Barack Obama.

According to a draft statement obtained by Reuters, the G20 countries are close to agreement on a reduction by half of their deficits, which were inflated by the crisis, over a period of three years. But they also leave the choice to each act, at least initially, at their own pace to take account of its economic situation.

The draft communique circulating recognizes the existence of more or less advanced stages of recovery depending on the country and the delicate balance needed between supporting growth and consolidation of public finances.

"There is the risk that a fiscal adjustment synchronized several major economies negatively impact recovery.There is also the risk that the absence of a consolidation needed to affect your confidence and hinders growth, "reads the text.

The main source of global growth today is the economy of China and other major emerging countries, which share the same concern about the debt problems of old industrialized countries.

In G20, the latter's debt is expected to average 107.7% of this year gross domestic product, against 80.2% in 2007 to the beginning of the crisis, while the forecast for the emerging countries of the group are 37%.

VIOLENCE IN TORONTO

Also according to the draft communique, the G20 should welcome the inflection in a more flexible management of its currency, the yuan, by China, which some hope that it will lead to currency appreciation.

They should also commit to strengthen the soundness of their banks tightening their standards of capitalization.

Germany, France and Britain are determined to push their project for the taxation of financial institutions, which are also U.S. support but is opposed by Canada and several developing countries.

The G20 is ready to leave each country free to impose such a fee to recover the substantial resources committed by states to save their banks from the crisis.

G20 leaders who gathered in Toronto Saturday night for dinner, have four working sessions on the menu this Sunday, including a luncheon before the summit ended around 16:30 (2030 GMT).

The center of economic capital of Canada has been the scene of clashes Saturday between police and anarchist militants dressed in black at the end of anti-G20, which brought together several thousand people generally peaceful. The police reported at least 130 arrests.

The recovery should continue at low speed in France by the end of the year, with a growth rebound in the second quarter but remain moderate then provides INSEE.

In his memo on the economy released Wednesday, the Statistical Institute expects a 0.5% of GDP in the second quarter and growing 0.4% in the next two quarters.

For the full year, growth would be 1.4%, in line with the government's forecast and just enough to stabilize unemployment.

The acquired at year end would be +0.6% and should in this case a 0.8% growth in each quarter of 2011 for achieving the government target of 2.5% was calculated INSEE which the forecast is however limited to 2010.

After rising 0.5% in the fourth quarter of 2009, GDP stagnated in the first three months of 2010 (+0.1%), fearing a relapse of the economy even if this figure is likely to be revised upwards on Friday when the national accounts are published in detail.

Entitled "In mid-stream, Note Insee business survey suggests a continuation of the recovery but at a moderate pace and with high uncertainty.

Turbulent waters

"An upturn in global activity was engaged for several quarters but there is still some way to go in this crisis and in waters which may be turbulent," said Sandrine Duchêne, head of the Business cycle, at a press conference.

Two forces are at work in France as in other advanced economies, "she said.On the one hand, the global recovery, but more beneficial to the country heavily exposed to foreign trade such as Germany or Japan, the other the need for fiscal consolidation that has already resulted in the listing Plan rigor.

"The year 2010 is a transition year between recovery and fiscal consolidation," said Sandrine Duchêne.

"In the very short term, the second quarter looks good but there is currently a cap on surveys which is expected a slowdown in activity by the end of the year."

According to INSEE, the attenuation of growth in the second half will not call into question both the positive contributions of the first quarter, namely the beginnings of a revival in business investment and re-creations of net jobs in the commercial sector.

"This trend will continue throughout the year but the pace of recovery will be slow and does not transmit only gradually income households," said Sandrine Duchêne.

In this context and with unemployment still high but stable, Insee sees household consumption stagnated in the second quarter as the first, before rising moderately (0.3%) in the next two quarters.

Demand for business will be limited but the depreciation of the euro will bring them a breath of fresh air by making their exports more competitive.

POSITIVE EFFECT OF THE EURO

In total, according to projections by INSEE, the recent decline of the euro should have a positive impact of 1.6 points on exports this year and 0.5 percentage points on growth that otherwise would therefore was only 0.9%.

Business investment in turn will benefit from improved market opportunities but will remain constrained by production capacity remains under-used, with a rate currently of 76% – ten points below the long-term average.

After eight consecutive quarters of decline, Insee sees the investment by non-financial leave of 0.6% in the second quarter, but he would decline a further 2.0% in total over 2010, following a drop of 7.9% in 2009.

Regarding employment, creation of the 24,000 net new market sectors in the first quarter – after seven quarters of destruction – would be followed by 8,000 others in the second, 4,000 and 15,000 in the third to the fourth, a total gain of 51,000 jobs this year 337,000 after destruction in 2009.

After six quarters of strong growth, the unemployment rate would remain stable for its 9.5% in France (9.9% in the counties overseas), to its highest level since late 1999.

Insee said its forecasts are surrounded by uncertainties. A resurgence of financial stress and / or the impact of measures to reduce the deficit might weigh on growth, since, unlike the depreciation of the euro, if continued, would allow countries Eurozone to benefit more from the dynamism of world trade.

On June 5, 1947, in a speech at Harvard University, General George C. Marshall announced a program of development aid as the world had ever known. The reconstruction program in European history will keep the name of its author.Spread over four years, resulting in a total of $ 13 billion of loans or donations in cash or in kind: tractors, equipment … is the equivalent of $ 115 billion in 2008 to rebuild Europe at the end of the Second World War.

In other words, not much in terms of the 3600 billion in 2008 for public intervention in World War II and the 700 billion spent during the Vietnam War, calculates Dessertine Philip, director of the Institute of High Finance.

And trifle when compared to the Marshall Plan 700 billion plan Obama in 2008 and 2008 of $ 1.095 trillion (750 billion euros) of the system put in place the euro area and by the IMF to maintain stability currency.