8/13 Issue
While Abenomics has been succeeding in many areas, The Economist reports that “despite a tight labour market, real wages continue to tumble. In May they fell by 3.8% compared with a year earlier—the steepest decline in years.” More ambitious measures to help lift wages would cost significant political capital, but Abe needs to make a bold move on wages. “Abenomics, and Japan’s recovery, rests on it.”
Bloomberg meanwhile says “Japan needs more gusty moves overseas,” asserting that “such investments will do more to create economy vitality than all the liquidity Kuroda & Co. can churn out.” The BoJ recently decided to forego additional monetary stimulus despite slowing inflation, signaling Kuroda may realize the limitations of his reach and highlighting the need for new solutions.
Overseas investment may be an easy option for Japan, but it’s proving difficult for Taiwan. The Wall Street Journal notes that if China and South Korea conclude a free trade agreement later this year as expected, “roughly 2% to 5% of all of Taiwan’s exports to China could be replaced by South Korean products.” Taiwan could pursue similar deals, but becoming too financially intertwined with China could undermine Taiwanese independence.
Turning to Europe, the Portuguese government announced a rescue plan that would split Banco Espírito Santo in two after the bank reported a €3.58 billion loss. The New York Times reported “the bank’s branches, customer deposits and healthy assets are being spun off into a new entity called Novo Banco.”
As the Ukraine-Russia conflict continues, Europe could see its energy bill rise. There are not enough alternative energy sources to wean Europe off of Russian oil and gas. As Euromoney puts it, unless European governments do more to accelerate a shift to other sources of energy, consumers there “will face higher energy prices than the US over the next decade or more.”
The Ukraine-Russia conflict is not only affecting energy prices, however. Institutional Investor reports that “disappointing sentiment data and continued conflict in eastern Ukraine” are “deteriorating investor confidence in Europe.” They also noted that this is “likely to cast a shadow over U.S. equity markets in the near term.”
Turning to the U.S., President Obama attended the U.S.-Africa Leaders Summit in Washington D.C. and unveiled two new initiatives to help stabilize turbulent regions of Africa. The Washington Post says the new initiatives “will try to avoid past U.S. mistakes. They recognize that the U.S. military should be training partners and allies, rather than doing the fighting.”
The New York Times this week took an in-depth look at 3-D printing. Although the paper stated “it’s still unclear exactly how and when 3-D printing will have an impact on our daily lives,” several of the essays published on the topic gave a good outline of the new technology and potential applications.
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To see the overseas media’s takes on these and other developments, you can browse the Global News highlights in app or at http://www.irken.jp/gn/. Links to the original sources are provided above, but please note these are frequently updated. Links that were valid at publication may later be broken.
