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☆ Nomura Research: China is facing a 'balance sheet recession'
▼ + stars: | 2024-06-05 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailNomura Research: China is facing a 'balance sheet recession'Richard Koo of Nomura Research Institute says the situation China is facing is similar to what Japan faced in the 1990s.

Persons: Richard Koo Organizations: Nomura Research, Nomura Research Institute, Japan Locations: China

☆ China needs a narrative that house prices are going to rise, Nomura's Koo says
▼ + stars: | 2024-04-10 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +1 min

Pictured here is a real estate project under construction in Huai 'an city, Jiangsu province, China, on April 8, 2024. BEIJING — China needs to convince people that home prices are on their way up in order for economic activity to pick up, Richard Koo, chief economist at Nomura Research Institute, told CNBC's Steve Sedgwick last week. In other words, as Koo warned last year, China may be entering a "balance sheet recession," similar to what Japan experienced during its economic slump. "For them to come back and borrow money, we need a narrative that says, okay, this is the bottom of the prices, the prices will start going up from this point onwards," Koo said. Koo and other analysts have pointed out that in China's policy-driven economy, house prices have not fallen as much as expected given declines in other aspects of the property market.

Persons: Huai, Richard Koo, CNBC's Steve Sedgwick, Goldman Sachs, Koo, " Koo Organizations: Nomura Research Institute, Japan Locations: Jiangsu province, China, BEIJING

☆ Economist explains how the exchange rate and 'Wall Street types' enabled Trump's rise
▼ + stars: | 2024-04-05 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailEconomist explains how the exchange rate and 'Wall Street types' enabled Trump's riseRichard Koo, chief economist at the Nomura Research Institute, explains how free trade and a strong dollar created the conditions for Donald Trump's 2016 election win, and why those issues haven't gone away.

Persons: Richard Koo, Donald Trump's, haven't Organizations: Nomura Research Institute

☆ Free trade flaws fueled Trump's rise in 2016 — and the problems remain, top economist says
▼ + stars: | 2024-04-05 | by ( Elliot Smith | ) www.cnbc.com time to read: +2 min

Decades of trade deficits and a strong dollar created too many "losers" in the U.S. economy who turned to Donald Trump's protectionist policies, according to Richard Koo, chief economist at the Nomura Research Institute — and those conditions remain. Trump's "America First" economic policies led his administration to institute a slew of trade tariffs on China, Mexico, the European Union and others, including slapping 25% duties on imported steel and aluminum. These policies have drawn widespread criticism from economists, who argue that tariffs are counterproductive, as they make imported goods more expensive for the average American. "When we studied economics and free trade, in particular, we were taught...that free trade always creates both winners and losers in the same economy, but the gain that winners get is always greater than the loss of the losers, so the society as a whole always gains. So that's why the free trade is good," he noted.

Persons: Donald Trump, Jonathan Diller, Donald Trump's, Richard Koo, Trump, Steve Sedgwick, Koo Organizations: U.S, New York City Police Department, NYPD, Nomura Research Institute, European Union, Republican Locations: New, Rockaway, Queens, Massapequa Park , New York, U.S, China, Mexico

More than 8.5 million abandoned homes in rural Japan are creating a "ghost town" problem. There are more than 8.5 million akiya , or abandoned homes, in rural Japan, according to the country's 2018 Housing and Land Survey, its most recent on record. The institute predicts akiya could exceed 30% of homes in Japan by 2033. As Richard Koo, the chief economist at NRI, told them at the time, the Japanese countryside has been hollowing out since the mid-'90s. Why aren't more Japanese people buying abandoned countryside homes?

Persons: —, who've, Richard Koo, There's, Chris McMorran, Koo, Douglas Southerland, McMorran, Natasha Durie, Durie, Eric McAskill, McAskill, Jaya Thursfield, Chihiro, Kurosawa, Joey Stockermans, akiya Organizations: Service, Survey, Nomura Research Institute, Business Insider's, NRI, National University of Singapore, of Anthropology, Ethnography, Oxford University, Canadian Real Estate Association Locations: Japan, Business Insider's Singapore, Gifu, Vancouver, Canada, Nagano Prefecture, England, Ibaraki Prefecture, London, North America, Kyushu, akiya

☆ Japan has a glut of 8.5 million akiya, empty 'ghost houses' left to rot. Now Airbnb wants to fill them with tourists.
▼ + stars: | 2023-11-29 | by ( Matthew Loh | ) www.businessinsider.com time to read: +3 min

Airbnb wants to use a growing glut of abandoned homes in Japan to boost its business. Japan has around 8.5 million akiya, or empty homes, as its population shrinks and ages. If the owners of idle assets refurbish them and convert them into lodgings, that would be a solution," Airbnb's head of Japan, Yasuyuki Tanabe, told Nikkei. Airbnb hopes to partner with businesses and local governments to encourage homeowners to invest in renovations, Tanabe told Nikkei. AdvertisementJapan has close to 8.5 million abandoned homesJapan has some 8.49 million akiya, or unoccupied homes, according to the government's Housing and Land Survey in 2018.

Persons: Airbnb, —, Yasuyuki Tanabe, Tanabe Organizations: Nikkei, Service, Survey, Nomura Research Institute, Japan National Tourism Organization Locations: Japan, Tourism

☆ Roaring Back From Pandemic, Japan’s Economy Grows by 6 Percent
▼ + stars: | 2023-08-14 | by ( Ben Dooley | More About Ben Dooley | ) www.nytimes.com time to read: +3 min

Why It MattersJapan is the world’s third-largest economy, and the largest creditor by far. Covid didn’t hit Japan’s economy as hard as it did other countries. The anemic yen has been a double-edged sword for the economy, said Takahide Kiuchi, an economist at the Nomura Research Institute. “However, it could undermine consumption.”BackgroundJapan’s has long suffered from sluggish economic growth. Recent softness in China, Japan’s largest trade partner, is a particular source of worry.

Persons: didn’t, Takahide Kiuchi, ”, Japan’s, Izumi Devalier, Ms, Devalier, ” Mr, Kiuchi Organizations: Nomura Research Institute, Bank of Japan, Bank of America Locations: Japan, United States, China, Europe

☆ Japan has millions of cheap abandoned homes. Here's what to know before you buy one.
▼ + stars: | 2023-08-04 | by ( Kylie Kirschner | ) www.businessinsider.com time to read: +5 min

With the population in Japan shrinking and Japanese buyers vastly preferring new over used homes, older homes are often abandoned when owners die or younger generations refuse to inherit them. The Japanese government estimated in 2018 that there were nearly 8.5 million abandoned homes in the country. Jaya Thursfield and his wife, Chihiro, moved from London to Japan after buying an abandoned Japanese farmhouse in Ibaraki, a Japanese prefecture about an hour's drive northeast from Tokyo. With many Japanese buyers preferring newly built houses, some homes are demolished after only 20-30 years. And while houses in the US typically appreciate in value, houses in Japan tend to gradually depreciate in value over time.

Persons: Jaya Thursfield, Chihiro, Richard Koo, Koo, Bethany Nakamura, Nakamura, it's Organizations: Service, Privacy, Japan, Japan's Ministry of Land, Transport, Tourism, YouTube, Law, Nomura Research Institute Locations: Wall, Silicon, Japan, Infrastructure, London, Ibaraki, Tokyo, Jaya, America

[1/5] A worker sweeps a street in the Central Business District on a rainy day in Beijing, China, July 12, 2023. REUTERS/Thomas PeterBEIJING, July 18 (Reuters) - China is entering an era of much slower economic growth, raising a daunting prospect: it may never get rich. He expects growth to slow to 3%, which "will feel like an economic recession" when youth unemployment is already above 20%. The April-June data puts 2023 growth on track for roughly 5%, with slower rates thereafter. But China's annual growth averaged around 7% last decade, and more than 10% in the 2000s.

Persons: Thomas Peter BEIJING, Desmond Lachman, year's, Wang Jun, Zheng Shanjie, Zheng, Richard Koo, Juan Orts, Xi Jinping's, Zhao, Cai Fang, Zhu Ning, Koo, Liangping Gao, Ellen Zhang, Ziyi Tang, Kevin Yao, Joe Cash, Marius Zaharia, David Crawshaw Organizations: Central Business District, REUTERS, American Enterprise Institute, Reuters, Communist, Huatai Asset Management, Reform Commission, Overseas, Nomura Research Institute, Fathom Consulting, Shanghai Advanced Institute of Finance, Thomson Locations: Beijing, China, Japan, United States, Young, Africa, Latin, U.S, Central

[1/2] The BYD Atto 3 EV car is displayed at the 39 Thailand International Motor Expo, in Bangkok, Thailand, November 30, 2022. Siam Motors is in talks with several Chinese automakers about potential partnerships, particularly for high-end electric vehicles, vice president Sebastien Dupuy said in an interview, referring to previously unreported discussions. Thailand is Southeast Asia's largest car producer and exporter, and its second-largest sales market after Indonesia. Japanese automakers are so dominant that for decades they have treated it almost as an extension of their home market. Thailand's pitch to Chinese EV makers has been its existing supply base – built largely for Japanese automakers – and readiness to provide incentives.

Persons: Athit, Sebastien Dupuy, Pasit Chantharojwong, Wall's Ora, Tesla, Isuzu, Hajime Yamamoto, Yamamoto, Goldman Sachs, General Narit Therdsteerasukdi, Narong Sritalayon, BEV, Chayut, Daniel Leussink, Kevin Krolicki, Jamie Freed Organizations: REUTERS, Siam Motors, Nissan Motors, EV, Reuters Graphics CHINA, JAPAN, Toyota Corolla, China's SAIC, Toyota, Honda, Nomura Research, Reuters, Thailand's, of Investment, Wall, Thomson Locations: Thailand, Bangkok, Thailand BANGKOK, Siam, BYD, China, Thai, Southeast, Indonesia, Japan, Europe, JAPAN Bangkok, Tokyo

The draft plan, which was presented at Kishida's top economic advisory panel on Wednesday, underscored the challenge for the leader, who is seen as a fiscal hawk, to strike a balance between economic growth and fiscal consolidation. The closely-watched policy framework will be approved by Kishida's cabinet this month, along with a separate action plan on his "new capitalism" agenda. "We will not abandon the flag of fiscal reform," Economy Minister Shigeyuki Goto told reporters after the panel's meeting. "There's no change to the government stance of striving to achieve a primary budget surplus in fiscal 2025," Goto added. The framework said the government will conduct a review of any progress of its fiscal reform in the fiscal year 2024 so as to create a medium-term economy and fiscal scheme.

Persons: Fumio Kishida's, Takahide Kiuchi, Shigeyuki Goto, Goto, largesse, Kishida Organizations: Nomura Research Institute, Liberal Democratic Party, LDP ₎, International Monetary Fund, Bank of Japan, Thomson Locations: TOKYO, Japan

☆ China is likely to face a 'balance sheet recession,' economist says
▼ + stars: | 2023-06-07 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailChina is likely to face a 'balance sheet recession,' economist saysRichard Koo of the Nomura Research Institute says the country is likely to face such a situation "given what's happening to the asset markets."

Persons: Richard Koo Organizations: China, Nomura Research Institute

The U.S. debt crisis is a headache for Japan, which is this year's G7 chair and the world's biggest holder of U.S. debt. Five more countries were invited to the outreach including Brazil, India and Indonesia - but not China - although emerging nations' debt problems will feature high on the agenda. On the other hand, Tokyo is courting China to join a creditor nations' meeting it initiated to resolve Sri Lanka's debt. "The agenda of talks show how G7 is becoming increasingly politicized in nature, with an emphasis on countering China." The International Monetary Fund last month trimmed its 2023 global growth outlook and warned a severe flare-up of financial system turmoil could slash output to near recessionary levels.

☆ Analysis: New BOJ chief to slowly unwind Kuroda's policy experiment
▼ + stars: | 2023-04-06 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

In a sign he will be in no rush to shift policy, Ueda told a parliamentary confirmation hearing in February that he will "spend time and engage in thorough discussions" with BOJ board members on how to address the side-effects of prolonged easing. But a closer look at his past, more candid remarks as a private-sector economist, and as a BOJ board member during Japan's battle with deflation in the late 1990s, offers a glimpse of his policy and communication style. Removing YCC altogether will deprive the BOJ tools to combat an unwelcome spike in bond yields, says former board member Takahide Kiuchi. Accounts of his days as BOJ board member also suggest Ueda is no fan of heavy money printing. Both in the confirmation hearings and in past remarks as board member, he has stressed the importance of using communication to enhance the effects of monetary policy.

☆ Japan unveils fresh childcare plan but funding unclear
▼ + stars: | 2023-03-31 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

Under the plan, the government will take steps such as expansion of child allowances to be given without income limits. While the government has earmarked 6.1 trillion yen ($45.90 billion) for steps to arrest the declining number of children, a senior ruling party lawmaker was quoted by media as demanding an additional 8 trillion yen to fund the new measures. "A boost to child allowances alone could cost 2-3 trillion yen. "Everyone acknowledges childcare support is important given Japan's need to boost the growth rate. "Opposition parties also have no objection to boost childcare spending," said political analyst Atsuo Ito.

☆ Japan's big firms offer largest pay rises in decades
▼ + stars: | 2023-03-15 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +4 min

The Rengo umbrella labour group has called for a 5% pay increase. The JERC survey showed that excluding seniority-based pay, base compensation that boosts fixed labour costs accounts for just 1.08%. "We need to focus on base pay. Workers from Japan's largest group of trade unions last week struck early agreements for hefty wage hikes. Unions have historically tended to settle for relatively meagre pay hikes around 2% in recent years, as unions are inclined to cooperate with management in keeping job security rather than aggressively demanding pay rises.

☆ The SVB crisis may prompt the Bank of Japan to delay policy changes, says former board member
▼ + stars: | 2023-03-15 | by ( Jihye Lee | ) www.cnbc.com time to read: +1 min

"The second half of next year is [the] possible timing for when the Bank of Japan will end its negative interest rate policy," said former Bank of Japan board member Takahide Kiuchi (pictured here in 2017). Japan's central bank could delay any changes to its monetary policy in light of the turmoil that the Silicon Valley Bank crisis has triggered in financial markets, a former board member told CNBC. And any changes to its ultra-dovish stance could be delayed by as much as a year, said Nomura Research Institute economist Takahide Kiuchi, who served on the Bank of Japan's policy board from 2012 to 2017. "I think that the new governor's monetary policy could be affected by the financial market conditions if the current instability of the financial markets continue," Kiuchi said in an interview with CNBC. "The second half of next year is [the] possible timing for when the Bank of Japan will end its negative interest rate policy," he said.

☆ Japan's big firms set to offer biggest pay rises in decades
▼ + stars: | 2023-03-14 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

Given that consumer inflation, at 4.1%, outpace wage hikes, pay rises of 3% or more need to continue in the coming years to sustain price stability at 2%, said Hisashi Yamada, senior economist at Japan Research Institute. "Average wage hikes that are consistent with the central bank's 2% price target are 3% which can be met this year albeit temporarily," Yamada said. Kishida's government will likely hold a joint three-party meeting with labour and management for the first time in eight years on Wednesday to ensure structural wage hikes. Workers from Japan's largest group of trade unions last week struck early agreements for hefty wage hikes. 1 automaker, and Honda, have also secured their biggest pay rises in decades.

It will also test Prime Minister Fumio Kishida's flagship "new capitalism" policy that aims to more widely distribute wealth among households by prodding firms to hike pay. World's largest car maker Toyota (7203.T) accepted a union demand for the biggest base salary growth in 20 years, while gaming giant Nintendo (7974.T) plans to lift base pay by 10%. The gain will comprise a 1.08% rise in base pay and a 1.78% increase in additional salary based on seniority, it said. Uncertainty over the sustainability of wage hikes could prod the BOJ to go slow in dialing back stimulus, some analysts say. The BOJ will probably wait until next year in doing anything radical, such as ending its bond yield control policy."

"His style is to discuss monetary policy based on facts and evidence," Inoue told Reuters in an interview on Monday. "Unlike Kuroda, Ueda won't immediately turn things around after assuming the post. "He'll likely let economic data guide policy decisions." If he were to become governor, Ueda could introduce a new monetary policy framework that could include a revamped type of forward guidance, Inoue said. "If he were to become governor, Ueda will likely put emphasis on maintaining financial system stability," he added.

☆ Nomura's Q3 profit grows despite investment banking slump
▼ + stars: | 2023-02-01 | by ( Makiko Yamazaki | ) www.reuters.com time to read: +2 min

TOKYO, Feb 1 (Reuters) - Nomura Holdings Inc (8604.T), Japan's biggest brokerage and investment bank, reported an 11% rise in quarterly net profit on Wednesday, as a partial stake sale in an affiliate offset a slump in investment banking. Nomura's wholesale division, which houses its investment banking and trading businesses, logged a pretax loss of 1.9 billion yen ($14.58 million), its first loss since the April-June quarter of 2021. read moreEven as Nomura's investment banking business was underpinned by relatively solid dealmaking activity in Japan, it confirmed layoffs of bankers in Europe and Asia. Kitamura said the company would stick to its strategy of beefing up its investment banking business, however. ($1 = 130.3400 yen)Reporting by Makiko Yamazaki; Editing by Muralikumar Anantharaman, Subhranshu Sahu and Bernadette BaumOur Standards: The Thomson Reuters Trust Principles.

☆ Japan's Nomura Q3 net profit rises 11%
▼ + stars: | 2023-02-01 | by ( ) www.reuters.com time to read: +1 min

TOKYO, Feb 1 (Reuters) - Nomura Holdings Inc (8604.T), Japan's biggest brokerage and investment bank, reported an 11% rise in quarterly net profit on Wednesday, as a partial stake sale in an affiliate lifted otherwise weak earnings. Profit came in at 66.9 billion yen ($513.51 million) for the October-December period, up from 60.3 billion yen a year earlier. Nomura's profit of 28 billion yen from a partial sale of its stake in affiliate Nomura Research Institute (4307.T) helped underpinned the earnings. The wholesale division, which houses its trading and investment banking businesses, reported a pretax loss of 1.9 billion yen, compared with a profit of 40.8 billion yen in the same period a year earlier. So far, Nomura appears relatively unscathed thanks to relatively solid dealmaking activity in Japan, Nomura's home market.

☆ Japan Inc strives to lure skilled workers as inflation, labour crunch bite
▼ + stars: | 2023-01-30 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +7 min

[1/2] A worker assembles an air drill at the factory of manufacturer Katsui Kogyo in Higashiosaka, Japan June 23, 2022. About a quarter of Japanese firms have offered inflation allowances or plan to do so, said corporate credit research firm Teikoku Databank. read moreThe private sector expects the drive to help boost productivity, meshing with Prime Minister Fumio Kishida's "new capitalism" initiative on wealth distribution that put a top priority on wage hikes. "Bonuses or inflation allowances would have only a limited impact on easing the pain of cost-push inflation, as consumers tend to save one-off payouts rather than spend," added Kiuchi, now an executive economist at the Nomura Research Institute. Workers have high expectations from this year's labour talks, which they hope will counter cost-push inflation while tackling the tight labour market to help boost the economy.

☆ BOJ may have crafted new tool for post-YCC era - analyst
▼ + stars: | 2023-01-20 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

The BOJ maintained ultra-low interest rates on Wednesday, including a 0.5% yield cap, but crafted a new policy tool to defend the ceiling and keep yields across the curve from rising too much - without having to ramp up its bond purchases. Specifically, the BOJ amended rules for an existing market operation tool, so it can pump funds extending up to 10 years in variable rates to financial institutions against collateral. Unlike its bond-buying operation, the fund-supply tool allows the central bank to push down borrowing costs with a wall of money - without having to worry about drying up bond market liquidity with its massive purchases, analysts say. "With this new tool, the BOJ may have prepared for when it ends YCC and begins normalising monetary policy," Inoue told Reuters on Thursday. "If the BOJ sees the need to set a new policy rate for shorter-maturity yields after ditching the 10-year yield target, this fund-supply operation could come in handy," he said.

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