http://ajw.asahi.com/article/economy/business/AJ201204270060
Japan, concerned that the sovereign debt crisis in Europe could destabilize the regional economy, is set to purchase South Korean government bonds to strengthen financial cooperation with its Asian neighbors.
The plan will likely be announced May 3 at a meeting in the Philippines of finance ministers from Japan, China and South Korea, sources said.
Japan has already decided to purchase Chinese government bonds denominated in yuan.
According to government sources, South Korea has given its approval to Japan to purchase government bonds denominated in won.
Although South Korean government bonds are freely traded on the market, Japan informed South Korea of its purchase plans as a matter of protocol because it will be buying them for the first time with its foreign reserves.
South Korea is believed to already own Japanese government bonds as part of its foreign reserves.
In March, Japan agreed with China to buy Chinese government bonds.
China has allowed Japan to buy $10.3 billion (835 billion yen) worth of bonds.
China has already allowed the South Korean central bank and a South Korean government-affiliated investment company to purchase Chinese government bonds denominated in yuan.
At a summit meeting in October, Japan and South Korea agreed to increase the amount of foreign currency either of the countries will lend to the other in the event of a currency crisis. The amount was raised from $13 billion to $70 billion.
The agreement came in response to a fall in the won’s value prompted by an outflow of funds from the South Korean financial markets due to the European debt crisis.
Japan, China and South Korea have been discussing plans to double the amount of loans available under the Chiang Mai Initiative, a regional currency swap agreement with ASEAN, to $240 billion.
(This article was written by Shohei Makiuchi and Keiko Yoshioka.)
and....
http://e.nikkei.com/e/fr/tnks/Nni20120427D2704F02.htm
Tepco To Be Nationalized As Early As July
TOKYO (Nikkei)--Tokyo Electric Power Co. (9501) will try to get back on its feet as a state-owned entity under a business plan that will transfer management control to the government as early as July in exchange for a taxpayer bailout.
Tepco, as the utility is known, and the government-backed Nuclear Damage Liability Facilitation Fund submitted the plan on Friday to Economy, Trade and Industry Minister Yukio Edano, who is expected to grant his approval in early May.
With the long-awaited deal, the nation's largest utility will finally move forward with turnaround efforts. Heavy compensation expenses and raising costs of radiation clean-up have depleted Tepco's coffers, forcing the utility to give up more than 50% voting rights.
Under the plan, Tepco will receive 1 trillion yen in capital in exchange for special-class stock that is not traded on the market, after its shareholders' meeting scheduled for the end of June. The government has the option of increasing its voting rights from more than half to at least two-thirds if Tepco's restructuring efforts stall. A two-thirds stake would give the government the power to make management decisions, such as mergers.
A management reform team composed of junior- and mid-level Tepco employees as well as staff from the compensation fund will be established after the shareholders meeting, according to Tepco's incoming chairman, Kazuhiko Shimokobe. This team will advise Shimokobe, the current head of the fund's main committee, who has no experience running a company.
The business plan is premised on a hike in household electric rates and the restarting of Tepco's Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture, both of which lack public support. A 10% hike would increase a typical household's monthly bill by about 600 yen.
Raising household rates "is something that needs to be done at some point in order to ensure a stable power supply," said Shimokobe. "I will make every effort to win public understanding."
As for restarting the idled reactors, Shimokobe emphasized that "maximum security" will be a condition for restarting nuclear reactors.
Touching on his management responsibility, Tepco President Toshio Nishizawa said that he will "make announcements after the firm releases its business results in May," indicating that a new management team, including his successor, will be unveiled around the middle of next month.
The business plan calls for cutting costs to the tune of 3.3 trillion yen over 10 years, through such steps as reducing expenses for material procurement and personnel.
Tepco's transmission, retail and fossil-fuel segments will be turned into in-house companies in the second half of the fiscal year to make them more independent. A shift to a holding company structure may take place in the future. This would facilitate the forming of tie-ups with other firms, which could result in lower costs for fuel procurement and upgrading fossil-fuel plants.
and...
http://www.easybourse.com/bourse/international/news/976439/bank-of-japan-boosts-stimulus-again-but-fails-to-impress-markets.html
Bank of Japan boosts stimulus again, but fails to impress markets
Publié le 27 Avril 2012 Copyright © 2012 Reuters
TOKYO (REUTERS) - THE BANK OF JAPAN BOOSTED ITS ASSET-BUYING SCHEME BY A FURTHER 10 TRILLION YEN ($124 BILLION) ON FRIDAY AND PLEDGED TO BUY LONGER-TERM GOVERNMENT BONDS IN A MOVE SEEN AIMED AT CONVINCING BOTH IMPATIENT POLITICIANS AND INVESTORS OF ITS RESOLVE TO PULL THE ECONOMY OUT OF DEFLATION.
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By Leika Kihara and Rie Ishiguro
The central bank also kept expectations of more stimulus alive as it pledged to "pursue powerful monetary easing" to reach its 1 percent inflation target, even as it nudged up its growth and price forecasts for the coming years.
The policy easing came at the top of an expected 5-10 trillion yen range and initially impressed markets, pushing the yen lower. The central bank's decision to buy more exchange-traded funds (ETFs) and real-estate linked funds also helped lift Tokyo shares <.N225>.
But the yen later crept back up and stocks slipped as some market players saw the BOJ's decision to give itself more time to hit the bond-buying goal as a sign that central bankers themselves had doubts about how much good their action would do for the struggling economy.
"The leopard doesn't change its spots. It (the BOJ) doesn't view monetary accommodation as a cure capable of reversing Japan's deflation," said Tim Condon, chief Asia economist at ING in Singapore.
"They seem motivated by politics and political pressure in these last couple of moves ... so I think they will do the minimum that they feel they are forced to do."
The BOJ's second easing in just over two months comes at a time when the economy is picking up and was seen mainly as symbolic response to politicians' calls for more efforts in battling deflation that has dogged Japan for over a decade, depressing consumption and business investment.
As expected, the central bank also extended the duration of government bonds targeted under its asset-buying scheme to three years from the current two years.
BUYING BONDS, BUYING TIME
BOJ Governor Masaaki Shirakawa said Friday's decision was aimed at supporting the "positive momentum" building up in the economy that he believes will help Japan achieve the central bank's inflation target as early as in 2014.
He offered few clues on the outlook for monetary policy but signaled his hope of spending some time before acting again, saying that the BOJ would "carefully and calmly" assess the effect of its recent steps in guiding policy.
"We'd like to achieve 1 percent inflation in Japan as soon as possible. But it takes quite a long time for the effect of monetary easing to appear on the economy," Shirakawa told a news conference after the policy meeting.
"Recklessly easing without taking into account that lag effect would destabilize price moves," he said.
The political reaction to Friday's decision, however, shows the BOJ may have only bought itself a little bit of time.
Finance Minister Jun Azumi described the move as "another bold easing step", but said he hoped the central bank would continue to take such steps.
The BOJ revised up its economic and price forecasts in a semi-annual outlook report released on Friday, projecting consumer prices would rise 0.7 percent in the fiscal year 2013/14, with inflation reaching 1 percent some time thereafter.
But data released earlier on Friday showed consumer inflation rose just 0.2 percent in March from a year earlier, a sign Japan still had a long way to go to beat deflation.
HALF-HEARTED MOVE?
Some analysts also questioned the scale of Friday's move, saying the BOJ actually has not committed to expand its balance sheet or accelerate the pace of asset purchases that much.
While boosting the pool for asset purchases, the central bank cut by 5 trillion yen the scope of its fixed-rate market lending operations, citing faltering demand.
As a result, it increased the combined asset-buying and loan program by just 5 trillion yen to 70 trillion yen.
It also extended the duration of the purchasing program by six months to June 2013, a sign that the pace of government bond purchases will not change that much.
"I find these moves disappointing. Yes, the BOJ will own more JGBs by mid 2013. Indeed they will own more JGBs by end of 2012. However, the total size of the asset purchase program has not increased by the end of this year," said Westpac chief currency strategist Robert Rennie in Sydney.
"This is the disappointing part for me."
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