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  Germany Records rise in Unemployment

>> Tuesday, March 31, 2009

Recession in Europe is worsening with Germany recording a rise in unemployment. Rate of Joblessness in Germany has risen to 8.6% in March, worsening slightly over 8.5% in February this year. Germany's export driven economy has been hit by global economic down swing.

Europe is mired by extended recession:
The rate translates into 3.4 million jobless people, an increase of 69,000 since the last year.

Labor market in Europe has been adversely affected by the economic slump. Unemployment concerns in Europe are growing with Spain recording the highest jobless rate at 14%.

Forecasts fell short:
The number of unemployed workers here has already exceeded the figures forecast by many analysts. Economists say the rate of unemployment has been stronger than was expected. A weaker economy is being seen as the main reason behind the increase. Further decline in the economy and stabilization in the second quarter
is estimated by analysts.

Unemployment to rise:
Further deterioration in the job market is certain. Germany is expected to have around four-million Unemployed people by the end of 2009.

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  Car Factory output falls in Japan; Asian Stocks plummet

>> Monday, March 30, 2009

Japan's car factory output has fallen sharply for the fifth consecutive month in February.
Annual car production in Japan has fallen by more than 9% in this financial year. An independent industry data has showed that Car production in Japan had plummeted by 56% in the previous month.
In Fx trading today, yen rose against the euro on speculation investors will reduce holdings of higher-yielding assets.



IMF predicts gloomy picture:
Revenue from exports have seen a sharp fall as the worldwide demand for goods has been sapped. Output in related sectors like the passenger cars, trucks and buses has fallen as we well.
The IMF expects Japan, one of the largest economies in the world, to register a contraction of up to 5.8% in the up coming financial year.

The finance minister has said that Japan plans to inject a stimulus package worth more than 2% of its GDP.

Asian Stock Nosedive:
World stocks fell on concerns the global slump is deepening.Worst performers have been the Asian stocks which nose dived on speculation over persistent problems in the US car industry.

GM's chief executive has been asked by the US president to step down even as GM and Chrysler, two of the car firm
giants, requested another round of Government bail-out.


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  Young Minds on the Global Crises

>> Saturday, March 28, 2009

Students around the world have been discussing how the global financial crises have affected them.

Here's what students from Glasgow (UK), Islamabad and Mbabane (South Africa) think about the upcoming G20 Summit of the leaders from around the globe. Students spoke their heart on

  • The current financial slump-how it has affected them,
  • How it could affect them in the near future and,
  • What they would tell the G20 leaders if they got a chance.

  • In Swaziland,South Africa:
    A student from the Waterford Kamhlaba United World College, Mbabane, Swaziland tells that the world crisis has not affected them directly yet. He does expect that they may have fewer scholarships in the future.
    And is worried about if there would be enough job opportunities for them when they grow up.

    Students In Britain:
    Students in the UK say they have noticed a stark difference in their lifestyles due to the global crisis.” It has become difficult for us to find part time jobs as shops are closing down”.
    Unemployment has seen a steep rise in the U.K.
    • Students say that they have given up hobbies such as sports classes etc because they are unable to afford them now.
    • Undergraduate students here are concerned about what universities they will attend because of the high cost of living.
    • As also about enough working opportunities when they finish the education.
    School Girls In Islamabad:
    Frustration is rising here, students in Islamabad say. People are distressed because of the rising prices. It has become increasingly difficult to make both ends meet.
    • Prices have shot up since the global slump. Students say that their families are finding it harder to manage within shrinking budgets. Political tension has also heightened due to the financial crisis.
    • Students are concerned about scholarships and government funds to pursue further studies.
    • If given a chance the students will show the G20 leaders the beggars and destitute in their country, along the roads and at garbage disposals searching food.

    Students are deeply disturbed about rising unemployment which they say may see a” waste of the brilliant potential of the youth of their generation.”Recession in Asia is deepening in some countries like Japan.

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      U.K. Contracts More than Estimated

    >> Friday, March 27, 2009

    Britain's economy has shrunk more than expected. The last three months of 2008 have registered the slowest growth since 1980.U.K's Economy has shrunk 1.6%, more than the estimated 1.5% in the last year.In Online forex trading pound dropped against the U.S. dollar.

    In the last quarter of the previous financial year U.K's GDP has contracted by 2% in stead of the 1.9% calculated.

    On the whole, analysts are only expecting the economy to shrink further in 2009.Among important figures is the household expenditure which fell by 1%. All other major sectors have also recorded contraction.The drastic fall in the output in the construction sector is being seen as the prime reason behind the slump. Output in the construction sector fell by 4.9% in the last year.

    The savings ration has increased by at least 5% with more people putting aside the money for hard times.Unemployment in the U.K. has been on the rise since the beginning of the year.

    Economists are citing the rise in savings as a good sign."It means that a large portion of the necessary re balancing of the economy away from spending and towards saving has occurred already", pointed out an economist.

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      U.S may have shrunk more than estimated

    >> Thursday, March 26, 2009

    The US economy may have contracted more than previously calculated with the pace of firings having increased in the last week. The world’s largest economy shrank at a 0.5 percent annual rate in last year’s third quarter.

    Recent reports however show that retail sales, residential construction and home sales have improved. “The worst is probably behind us,” said an economist at JPMorgan in New York. “Hopefully, if policy works, we can actually start to see some daylight as we get to the middle of the year.”

    Stepped-up efforts by the Obama administration and the Fed may help sustain the improvement in the economy. Carmakers are counting on the policy measures for survival.The revised figures for GDP, the sum of all goods and services produced, are expected later today in Washington.

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      Japan Gripped by Global recession

    >> Wednesday, March 25, 2009

    Japan is mired by deepening global recession as exports halved for a second consecutive month in February.Exports in January had been dismal as well. In Fx trading yen is being expected to stay on the back foot having regained some ground after dropping against the euro and the Australian dollar yesterday.

    Japanese economy is exclusively export based:
    As one of the world's largest export based economy Japan has suffered more setback than other countries. The island
    country has recorded a 49.4% plunge in its exports even as consumers all over the world tighten their belts to cut costs.

    Car exports have been most adversely affected in particular having fallen more than 70% in the last month.Diminishing global demand has forced Car manufacturing firms to cut jobs and reduce shifts.

    Another stimulus package anticipated:
    Japan has officially been in recession since October last year when it saw an annual growth contract of 12%. The contraction had been one of the biggest ever in developed nations.

    The government is expected to introduce a third round of stimulus package worth 20 trillion soon.

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      World Trade to Shrink By 9%

    >> Tuesday, March 24, 2009

    Global trade volume will shrink by at least 9% in the present year. In a forecast by the World Trade Organization (WTO), developed nations are being seen to be hit the hardest. Developed nations across the world can expect a 10% drop in the trade percentage. Poorer nations could expect 2-3% fall.

    Falling Trade responsible for recession:
    While blaming the shrinking trade volume as the reason for global slump, WTO also said that it could well be a "potent tool' for coping with the same.

    World trade has witnessed the biggest fall since World War II.

    WTO Director-General Pascal Lamy also called up on world leaders to fight protectionism. Lamy pointed out that Protectionist measures counter the effect of efforts to recover from the global recession. And that such measures could "threaten more job losses". World Trade is an important agenda at the upcoming G-20 Summit on April 2 in London.

    Optimistic Outlook:

    Global trade is unusually falling simultaneously around the world.


    WTO, however, marked that there have been some positive signs with China, Singapore and Taiwan recording a rise in export- for the first time in months.China is counting on recovering sooner than rest of Asia.

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      China Counts on Early Recovery

    >> Monday, March 23, 2009

    China may be the first country to recover from global crisis, according to the analysts there. Researchers in China are saying that it has the capacity to step out of the world crisis and maintain a stable growth in the coming times.In forex trading, yuan dropped the most in three weeks against the US dollar.

    Officials Forecast Early Recovery:
    The
    4 trillion Yuan ($585 billion) worth stimulus package announced earlier in the year will run through 2010, adding 1.9% to this year’s expansion by spending on creation of roads, railways and houses.

    As per the experts and officials in China some industries are showing early signs of recovery. Officials reaffirmed China's annual growth target of 8%, even as the global economy copes with the first contraction since World War II.

    Chinese Premier Jiabao had cited last month that China will likely be the first major economy to recover. And that it has “adequate ammunition” to revive its economy.The Government Stimulus package is being said to have effect as domestic lending and spending have surged.

    World Bank had announced previously in the month that there have been early signs of stabilizing in China.

    How far that turns out to true remains to be seen:
    China's economy has suffered a setback from the diminishing global demand and consequently plummeting exports.Unemployment has risen with millions of migrant workers losing jobs as factories are cutting production or shuting down.

    China registered slowest growth in factory output in the January and February this year.The world's largest and most populous country is planning a record 950 billion yuan budget deficit this year. The risk posed by the deficit is “under government control,” vice minister of finance was quoted.

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      Americans Still in Fear of Home Prices Drop

    >> Saturday, March 21, 2009

    Americans are still in fear that prices will drop steeply even after the Fed's efforts to revive the economy the real estate sector are going on full fledged, according to a poll here.
    The Reuters surveyed homeowners who forecast their home values would fall by 2.2 percent in the year ahead.

    The decline in home prices in March has been more than the expected 1.9%.Ever since the housing bubble burst, there have been heavy losses in the stock market and massive job losses across the US.

    Consumers in the US are still nervous about home prices. The chances of the US recession ending this year have become bleaker in such a case.Analysts say that the fall in home prices in the country has been so sharp that it will take years to completely erase the negative wealth drag.

    House Prices in the US have tumbled more than 26 percent since their peak three years ago.

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      People on Jobless Benefit in U.S. Rises to Record

    >> Friday, March 20, 2009

    Unemployment in the U.S. is on the rise. According to the recent reports from the Labor Department the number of U.S. workers seeking unemployment benefits has hit a new record.

    In forex trading the U.S. dollar plunged for a second straight session. Unemployment rate has skyrocketed in the recession mired U.S.


    Figures underscore the difficulty of finding a new job:

    • 5.47 million People staying on the jobless rolls or the unemployment social security benefit.

    • That makes the number of people filing new claims for jobless benefits rise to 646,000 from 658,000 the previous week.
    • Over 4 million jobs lost in the country since the recession began 15 months back
    • Jobless rate has hit 25-year high of 8.1 percent.
    • Percentage of insured workers receiving jobless benefits jumps to the highest since 1983 to 4.1%
    According to market analysts U.S. is likely to lose more than 700,000 jobs this month. The pressure on employment in the U.S. is building without any signs of it easing in sight. Analysts are not predicting a strong growth for the American economy until 2010.

    Previous Posts Tagged U.S Unemployment
    Related Posts:Unemployment in UK highest since 1991

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      AIG Being Forced to Pay back the Bonuses

    >> Wednesday, March 18, 2009

    US is forcing the ailing insurer AIG to pack back the highly controversial bonuses it awarded after taking public bail-out money.73 AIG executives - including 11 who no longer work for the company - were each last week given bonuses worth more than $1m.

    Geithner Faces Heavy Censure:
    US treasury secretary Geithner is already facing heavy criticism for his handling of the increasingly controversial issue.Geithner in a letter to congressmen said that $165m would also be taken from $30bn the firm is due to get as part of its government bail-out. Also promising that a contractual commitment will be imposed on AIG to pay the Treasury from the operations of the company the amount of the retention awards just paid.



    "Outrageous" Bonuses:
    Obama called the AIG bonuses "an outrage" on Monday. Obama is trying to channelize the public frustration without himself becoming the object of anger.
    Republicans have raised questions about when Obama was told about the bonuses - and also criticized Mr. Geithner for not preventing the payments before they were paid. The US Treasury plans to renegotiate the deal.

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    Posts

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      UK Sees Steep Rise in Unemployment

    >> Tuesday, March 17, 2009

    UK is reeling under growing massive unemployment. The job loss rate in UK has more than doubled in the past years. On an average, each job is being chased by at least 10 jobseekers. In Fx Trading pound rose for a fourth day against the dollar today.

    According to the trade union body there a year earlier it was only 4 people seeking a job. At other council areas there are at least 20 people per job vacancy. In other figures, between January and March this year, there have been two million unemployed people in the UK.Job loss rate has already climbed to 8.1% in the U.S.


    The decrease in job vacancies has been equally shocking.”The government can no longer claim there is plenty of work available when there are as many as 20 dole claimants per job centre vacancy in parts of the country" said the Trade Union General Secretary.


    According to The British Chambers of Commerce (BCC), over the second half of the next year, more than 10% of the total workforce in Britain can be without a job.


    UK is witnessing the first recession since 1991.


    UK economic output fell by 1.5% in the last three months of 2008, after a drop of 0.6% between July and September. This met the widely accepted definition of a recession - two consecutive quarters of negative economic growth.

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      "U.S. Recession to End This Year"

    >> Monday, March 16, 2009

    Ben Bernanke, the head of the US central bank, said in a TV program, that he expects America's recession to end this year. How far his estimates turn out true remains to be seen. His remarks are being seen as helpful in curbing the worldwide pessimism to creep still deeper.

    Bernanke expects the recovery to begin next year. According to Bernanke, the government fund of $500bn is stabilizing the mortgage market and business lending is picking up.

    Noticeably, Mr. Bernanke had previously said in January that he believed that the recession that took hold at the end of 2007 would end this year.

    At the interview, Bernanke cited that lack of political will to solve problems could well be the biggest risk to recovery from the global economic crisis.

    The remarks do sound unusual. Bernanke said that this was an extraordinary time, adding that the world came close to financial meltdown.I think the comments are critically timed with the G-20 Summit due next month. The meeting is being seen as very vital in averting a 1930s like scenario.

    The US employment rate had risen to 8.1% in February last month.

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      Obama seeks coordination of worldwide efforts

    >> Saturday, March 14, 2009

    One of the prime agendas at the upcoming G-20 summit at London next month is the coordination of the worldwide efforts in reviving the world economy.

    US President Barack Obama is seeking to coordinate efforts his country is undertaking to deal with the economic crisis with that of most other countries worldwide.
    Talks on his subject had been going on for quite some time now already. India's Prime Minister Manmohan Singh will also be attending the summit.The GDP or the gross domestic product, one of the chief indicators of a country’s economic growth, has taken a downturn in many countries globally.


    Asian countries including China and Japan have already introduced massive stimulus packages to increase consumer spending. President Obama is looking to match the simultaneous efforts his country and the countries overseas are making to cope with the economic crisis.According to the IMF, we could expect a world recession in decades.

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      Expect First Global Recession in Decades

    >> Friday, March 13, 2009

    The world economy is likely to shrink for the first time in decades this year. According to the IMF, the prediction can only be gloomier.

    The head of the IMF Dominique Strauss-Kahn, speaking at a conference in Tanzania said that trade was falling at an alarming rate and business and consumer confidence had collapsed.

    Africa is already reeling under global negative growth. Decrease in worldwide demand has undermined demand for many industrial commodities, which are important exports for several African countries. Exports including oil in Nigeria, Angola and Equatorial Guinea, and copper in Zambia form a substantial part of the Continent's revenue.

    Sub-Zero Growth
    For the first in most of our lifetimes we can expect the global growth rate to fall under the zero
    The outlook from the World Bank is no less pessimistic. As IMF's sister institution, the WB also expects the global economy to shrink for the first time in decades.

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      China factory output growth slows-Optimism Remains

    >> Thursday, March 12, 2009

    Growth Output Falls to Record Low
    China witnessed slowed Industrial production growth in the past two months because of the plunging worldwide demand. China’s exports have been hit badly.

    As a result China has been battered by a fall in demand for its goods. China's export figures fell a record 25.7% in February. In Fx trading, Yuan changed a little against the U.S. dollar.

    Optimism On Rebound
    There are signs however that things will start looking up. The government's stimulus package is being said to have an impact. The banks have already increased lending to inject more money in the economy.
    Output in February increased showing growth in concrete production which in turn reflects higher construction spending.

    The government in China has introduced the 4 trillion Yuan ($585bn) stimulus package in a hope to reduce the country's heavy dependence on export of its goods.
    China has strong credit base and according to analysts China will be among the first Asian economies to see policy-driven recovery by mid-year.

    Read more...

      Australia Headed for Recession

    >> Tuesday, March 10, 2009

    Australia's economy has shrunk for the first time in eight years, raising fears that the country may be heading for a recession.


    The economy contracted by 0.5% in the last three months of 2008 from the previous quarter. Economists had been expecting it to grow by 0.2%.


    Hit Hard:

    If Australia's economy shrinks again the current quarter, it will enter recession, usually defined as two consecutive quarters of contraction. Australia's resource-based economy has been hit hard by the decline in commodity prices.
    The country's mining firms are cutting back on spending, slashing staff numbers, and shelving projects.
    This is being seen as an unsurprising outcome illustrative of the magnitude of the global recession and its impact on the continent.

    Other developed economies of the world are already reeling under the worldwide meltdown. Japan’s GDP dropped 3.3% in the final quarter of 2008. Japan recorded its biggest deficit in 13 years. The US saw a 1.6% drop and the UK contracted by 1.5%.


    Recession was inevitable:
    According to analysts, Australia had hoped to duck the worst of the global recession, but this no longer looks possible."After surviving the 1997 Asian financial crisis and the 2000 dotcom bubble, Australia had hoped to complete the impressive hat-trick of not being forced into recession by the global financial crisis," our correspondent says.

    Australia is being regarded as faring better than others. However, this seems to be the recession that Australia could not avoid.

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      Japan's exports halved in January

    >> Monday, March 9, 2009

    Japan's exports halved in January.Japan's current account recorded its largest deficit on record in January, reaching 172.8bn yen ($1.8bn). This is Japan's first deficit in 13 years.In forex trading yen has weakened further.

    Corporate blow:
    Car exports alone dropped 66.1%, with semiconductor and electronic parts exports down 52.8%.
    Consumers around the world no longer want to buy Japanese cars. Consumers in Asia, Europe, the Middle East and the United States are not buying pricey Japanese goods such as cars and electronic goods.

    Honda has had to cut production, and Sony is set to register its first annual loss in 14 years.
    Shares tumbled on the news, with the benchmark Japanese index, the Nikkei, closing down at a 26-year low.

    Dismal Economy:
    "We incurred the current account deficit due to a plunge in exports. Our exports to key regions, including the United States, Europe and Asia, were all down sharply due to the deteriorating global economy," a finance ministry official said.
    "Japan's export-driven economy is really engulfed by waves of the global economic crisis. “An economist pointed out.


    Japan has already passed the legislation to hand out cash to its people as an economic stimulus.

    Read more...

      US jobless rate climbs to 8.1%

    >> Saturday, March 7, 2009

    U.S. Jobless rate Increases:
    The US jobless rate jumped in February to 8.1%, according to official figures from the U.S. Labor Department. The number of people out of work rose by 651,000 during the month.Both figures are bigger than expected.
    A total of 12.5 million people are now unemployed in the US.

    President Obama said that the number of jobs lost so far in the recession was "astounding" adding that he had signed his economic stimulus package in order to save jobs.Rising unemployment has also meant greater demand for free meals.

    Across sectors:
    Jobs were cut in most sectors, with only government, education and health services adding staff.
    In the manufacturing sector 168,000 jobs were cut in the month.
    104,000 jobs went in construction and 375,000 were cut in the service sector.

    Grim Future Ahead:
    Federal Reserve Chairman Ben Bernanke told Congress earlier in the week that economic indicators "show little sign of improvement" and that "labor market conditions may have worsened further in recent weeks".

    Read more...

      Indian contest for rupee symbol

    The Indian finance ministry has begun a public competition to select a design for the symbol of the rupee. Unlike the major currencies of the world like the dollar, the pound, the yen and the euro, the rupee does not have a globally recognized symbol.

    Ethos of India:
    The rupee is generally shortened to Rs or sometimes the currency is described as INR (Indian rupee).But, the government says, these are not symbols, they are mere abbreviations for rupee.To get an internationally-accepted symbol, the finance ministry has invited entries from the public.

    "The symbol should represent the historical and cultural ethos of India," the deputy secretary in the finance ministry's coin and currency department, BS Rawat, told the BBC.

    Guidelines for entries:
    "The entries can be in any of the Indian languages. They can even be in English which is also an accepted language of use by the government," Mr Rawat said. Each entry has to be accompanied by a fee of 500 rupees ($10) and a participant can send a maximum of two entries. The rules also say that the "symbol should be applicable to the standard [computer] keyboard".

    Officials say the winning entry will be chosen by a seven-member jury of experts drawn from various art institutes, the government and India's central bank, the Reserve Bank of India. Five short listed entries for the final selection will be awarded a prize of 25,000 rupees ($500) and the winner will take 250,000 rupees ($5,000).

    Implementing new currency symbol can be an expensive exercise:
    According to one estimate, when the euro was introduced in 1999 it cost Europe's biggest companies more than $50bn to update their computer systems to deal with the changeover.” We have not thought about the costs yet," Mr Rawat said. "First, we'll select a symbol and then we'll do the costing," he added.

    The contest closes on 15 April at 1300 local time (0730G).The contest is open only to resident Indians, a release on the ministry website says. Detailed guidelines on how to prepare the entries have been put up on the finance ministry's website.

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      Satyam Given the Go-Ahead

    >> Friday, March 6, 2009

    SEBI has approved plans for fraud-hit IT firm Satyam to sell a 51% stake as it seeks to win back clients and restore customer confidence.

    As per the reports IBM and Indian engineering firm Larsen & Toubro are frontrunners for the stake.Satyam has struggled since former boss Ramalinga Raju admitted inflating their assets by more than $1bn.Shares in Satyam already jumped 18% after the company's state-appointed board got approval to sell the majority holding.

    Satyam had lost more than 80% of its market value following the CEO's confession in January.The auction for the stake will be global and potential buyers who would need to have assets of at least $150m.The buyer then would not be able to sell its stake for at least three years, Satyam said in a statement.

    Satyam had been one the biggest players in the booming Indian IT software market, supplying back-office services to firms from around the world.

    Read more...

      Oil price up over petrol demand

    >> Thursday, March 5, 2009

    Oil prices have risen nearly 9% after the US government reported an unexpected drop in crude stocks and an increase in demand for petrol. Prices were also supported by a rise in China's manufacturing index. China is the second biggest oil consumer
    US crude stocks fell by 700,000 barrels for the last week of February.

    US crude stocks fell by 700,000 barrels for the last week of February, while demand for petrol over the past four weeks was up 2.2% from a year ago. US light crude rose by $3.73 to $45.38.

    "Overall the (US oil inventory) numbers are very bullish... again, gasoline remains the one bright spot in the market that can really pull the complex higher,"pointed out an analyst.

    Stock markets around the world have been rising on Wednesday on hopes China will announce an expansion to its economic stimulus plan.However, an analyst at Oil Price Information Service said that crude inventories had been swollen for months and that oil prices won't move higher without some signs that the economic malaise has bottomed out.

    "It's going to be a shaky year. The fundamentals are still poor," he added.

    Read more...

      Japan to Hand Out Cash to People

    >> Wednesday, March 4, 2009

    Japan's parliament has passed legislation to give a cash hand-out to every resident in an attempt to boost the recession-hit economy. People will get at least 12,000 yen ($121) under the $20bn plan. In forex trading Yen has been growing weaker.

    There are fears however that most Japanese people, who have a strong tradition of saving, will hang on to the cash instead of spending it. The cash hand-out is the centerpiece of a stimulus package to revive Japan's economy. Japan is in a far sharper recession than the US or Europe.

    Japan's GDP had dropped 3.3% in the final quarter of 2008, a much steeper decline than in the US, which saw a 1.6% drop. UK’s economy had contracted by 1.5%.

    Critics of the plan say it is a ploy to boost the popularity of Prime Minister Taro Aso and this will only expand Japan's already bulging budget deficit.The legislation enacting the stimulus plan has been mired in Japan's parliament for weeks. In a political battle sort of, the bill was passed after the government-controlled lower house overruled a no vote in the upper house, which is dominated by the opposition.

    Japan has been one of the first countries in Asia to be hit by the global meltdown and lead the recession into the continent.

    Read more...

      Standard Chartered defies Pessimism

    >> Tuesday, March 3, 2009

    Standard Chartered bank which focuses on Asia, Africa and the Middle East, has defied the gloom afflicting the banking sector by reporting a rise in profits. The bank said its pre-tax profit for 2008 was $4.8bn (£3.4bn), up 19% compared with a year earlier.

    A spokesperson for the Standard Chartered said that it was on a "firm footing" for 2009.It warned, however, that its core markets, which have so far proved more resilient to the credit crisis, have begun to feel the heat.

    John Peace, the acting chairman of Standard Chartered, said last year's turmoil on the financial markets had been "truly extraordinary" and an extreme test for the banking industry. He warned further the uncertainty and the contraction of economies will continue this year and the situation can worsen.

    The company said its focus on Asia and its sensible attitude to liquidity and costs had helped it to weather the storm.

    The bank’s chief executive remarked that the over-leverage and over-complexity of the banking crisis in the UK and the US are not present to nearly the same extent in Asia. Asian banks, even while they are feeling the stress of dollar liquidity drying up and credit environment deterioration, are in much better shape than many counterparts in the West.

    U.S. has raised its stake in Citigroup. The government has also already extended its aid to AIG this week as part of a new government rescue bid.

    Read more...

      Forex and global stocks fall sharply on fears financial sector could worsen

    >> Monday, March 2, 2009

    Forex and financial markets have been gripped by fears the global financial sector may perform worse than calculated. Investor confidence has already been hit by talk that US insurance giant AIG will need a further injection of government cash with its report due to be released today.

    In Europe, the UK's FTSE 100 fell by 3.2%, while Germany's Dax was down 2.76% and France's Cac 40 lost 2.67%.Earlier in Asia, Japan's Nikkei 225 index closed down 288.27 points, or 3.8%, at 7,280.15. In Hong Kong, the Hang Seng fell 3.9% to 12,314.5 points.

    China's manufacturing sector had declined further last month. South Korean imports and exports slumped to a record as well. Japan reported a steep drop in car sales. Weak economic data from China and South Korea has also underscored fears about Asia's export-dependent economies.

    Monday morning slide in forex and stock indices was followed by a poor performance on Wall Street on Friday last week after data showed that economic growth was even weaker than thought.

    This is turning out to be one of the most tumultuous times on record in the global financial markets. "You're seeing the U.S. is sinking lower and lower, and we're still desperately searching for a bottom," remarked an analyst.

    Read more...

      Forex-Currency update on Monday

    Forex Daily Currency Update
    2nd March 2, 2009 Monday

    EURO:
    Euro fell to a one-week low vs the dollar after European Union leaders rejected calls to back an aid package for eastern Europe, fueling concern the 16-nation region’s recession will deepen.

    YEN:
    The yen may extend its worst month in 13 years into March on speculation traders will keep reducing holdings of long positions in the currency that bet on a rise in the exchange rate. Japan’s currency weakened 7.9 percent versus the dollar in February, the poorest month since August 1995.

    NZD & AUD:
    New Zealand’s dollar fell to a 6 1/2-year low and Australia’s currency extended three weeks of declines after U.S. and Asian shares slumped, prompting investors to seek the safety of the greenback.

    ASIAN CURRENCIES:
    The South Korean won and the Indonesian rupiah led declines in Asian currencies on concern the global recession is worsening, deterring investors from buying emerging-market assets.

    RUPEE:
    India’s rupee slid to a record low as mounting global stock losses added to concern investors will pull money out of riskier emerging-market assets.The currency extended a two-week slump on speculation Standard & Poor’s will soon cut the nation’s debt rating to junk. The rupee also fell on concern the current-account deficit will widen from a record as exports decline amid a deepening global economic slump.

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