As part of the reason for the delay in the U.S. economy Barack Obama pointed out problems in Japan and Europe. Published on Friday data reveal that for the past eight months in May, U.S. employers have recruited at least new employees, and unemployment has risen to 9.1 percent from 9.0 percent in April. The economic data are political challenge for President whose re-election in 2012 will depend on its ability to convince voters that the economic policies of his administration have been successful. Part of the President’s election strategy will involve a shift of voters to external factors for domestic economic problems. In his address Saturday, Obama has done exactly that, warning of cross winds, harm the U.S. economy.
“Although in the past 15 months our economy has created more than 2 million jobs in the private sector continues to grow, we are now facing strong opposition winds”, he says.
These are high gas prices, the earthquake in Japan and concerns about the fiscal situation in Europe. From time to time on the road to recovery will encounter similar shocks.
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Almost two months after the devastating earthquake in Japan consequences can be felt worldwide. Because of missing parts to be shipped from Japanese suppliers, the U.S. automotive concern Ford will close three of its factories. Тхе вork will be phased out in South African city of Pretoria in East Nantszin in Taiwan.
“According to preliminary plans, these factories had to suspend production later this year for one week, but closure is drawn to earlier, company spokesman Todd Nissen, quoted by Financial Times. All the three affected plants are managed by Ford with Mazda. The worst of the situation in his country is concerned, however, Toyota. And recent marketing results prove that – in March, the month of the earthquake and subsequent tsunami, production in Japan declined by 62.7 percent (just over 129 thousand cars) over the same month a year earlier, said the concern. Production worldwide is even decreased by 19.9 percent to 542,465 vehicles.

The devastating earthquake in Japan, followed by energy problems there, and riots in Libya led to a shift of power in the European gas market. Furthermore, the prices of the gas market in Europe now exceed the prices of contracts with Gazprom. This gives the Russian gas giant another argument in defending their position in negotiations with customers, says the publication. The world production of LNG is around 330-340 billion cubic meters annually. Moreover, until recently, it exceeded demand by 20-30 billion cubic meters annually. After the earthquake in Japan, however oversupply gradually reduced as a result of the suspension of the 11 reactors in Japan there is growing demand for liquefied gas carried by ships. It should be borne in mind that Japan before the disaster was quite a big importer of LNG, which in 2009 was over 87 billion cubic m. According to estimates of international experts recently gas imports to Japan will increase by 20-30 %, ie to about 110 billion cubic meters annually. This means in practice that is likely the country will need another 15 billion cubic meters of gas annually. After the tragic events in Japan Gazprom has proposed to increase gas supplies to Europe, to release additional volumes of liquefied natural gas from Qatar to Europe to redirect affected Japan. Analysts said the Deutsche Bank European countries may need to request additional 10 billion cubic meters of Russian gas by 8 billion cubic meters will be necessary to Italy. This is largely related to the termination of supplies from Libya.
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The European Commission (EC) announced its readiness to review and improve control over food imported from Japan, where the situation with the spread of radioactive contamination worse. For this purpose, the EC will review every 48 hours options for response to the security of food imports from Japan. This is stated in the summary of the Committee on the occasion of the measures taken to protect the European market from imported products contaminated with radiation. The Communication notes that at this stage is not necessary tightening of controls and measures are reviewed monthly. European experts exchange information every day, a joint meeting between them is scheduled for April 8th. The Commission notes that the issue is governed by the adopted following the accident at Chernobyl in 1986 rules, the limit values ​​have not changed since then. The rules include monitoring the values ​​of strontium, iodine isotopes emitting alpha particles of plutonium, and other nuclides, including cesium 134 and 137. On March 15, or four days after the devastating earthquake in Japan and the accident at the Fukushima nuclear power plant-1, the EC submitted a message to the early warning system that monitors food safety to be taken for pollution studies of food imported from Japan. The European Commission notes that this is done as a precaution. EU countries were advised to comply with the requirements set out in documents from 1987 that contain maximum levels of substances harmful to health, the appearance is the result of increased radiation.
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The investors disappointed by the loss of large corporations on Wall Street, economic anemia in Japan and debt problems in Europe, seeking investment opportunities in emerging markets like China and India. Now, however, worried about the riots in the Middle East and discontent fueled by rising food prices and declining incomes in many regions of the developing world, stunning investors withdraw funds from developing economies and again turn to relatively safe financial havens, for any considered the U.S., Europe and Japan, says AP. This trend speaks of radical change in sentiment from the financial crisis, languish notions about what is risky and what is not, after the Anglo-Saxon model of liberal capitalism was brought to the brink of collapse. Vigorous efforts of Europe to curb debt crisis, the ability of Japan to support its exports despite the strong yen and good corporate results in the U.S. failed to convince investors that the outlook for developed economies in 2011 is pretty good. According to the EPFR Global in the second week of February, investors have pulled 5.45 billion dollars of funds in China, India, Brazil and other emerging markets, redirecting them to the developed economies – the biggest weekly transfer for more than 30 months. By mid-February, the funds from developed countries reported 7 consecutive weeks of gains by investing in European funds to hit record levels last 41 weeks. Since the beginning of the year, investors have invested 47 billion dollars in funds from the U.S., Europe and Japan, only investments in U.S. funds reach 29 billion dollars.
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The Bank of Japan (YATSB) adjusted downward its forecast for growth of the Japanese economy in 2011, after the Debt Crisis in Europe worsened outlook for the global economy. Monetary institution, and leave the base rate in the country of its record low level of 0.1 percent for the 20th consecutive month after today’s meeting in line with market expectations. Its management expects gross domestic product (GDP) to increase by 1.9 percent next fiscal year which begins on April 1, 2011 This is less than forecast in April growth of 2 percent, says Bloomberg. For this fiscal year provides YATSB GDP growth of 2.6 percent from the previous forecast of 1.8 percent. With regard to deflation, it is expected to amount to 0.4 percent for the year. The rapid economic development of Asian countries is among the most important factors for improving forecasts of the Japanese economy this year. With the depletion of the effects of fiscal incentives for governments, however, next year is expected lower economic growth. Japan’s economy grew more than expected 5% of the aligned on an annual basis in the first quarter. Compared with the last three months of 2009 it increased by 1.2 per cent. Limited bank credit deflation and persist in the country, however, led YATSB to draw another 3 trillion. yen in the banking system. In December 2009 it spent 10 trillion. yen as short-term loans to banks, the amount was doubled to 20 trillion. yen in March. The home loan comparison is giving good sign for economy recovery, but still under the expectings from the government.
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Between 2000 and 2009, exports of EU goods to Japan fell by about 20%, from 45 billion to 36 billion euros, Eurostat reported. EU Imports from Japan fell by almost 40% from 92 billion to 56 billion. Thus, the EU deficit in trade with Japan has fallen from 47 billion in 2000 to 20 billion in 2009, the share of Japan since the total movement of goods outside EU decreased significantly. In 2009, Japan fell 3 percent of exports and 5% of EU imports. That it was the sixth largest trading partner of EU. On the occasion of the 19th Summit of the European Union and Japan, which will take place on Wednesday, April 28, 2010 in Tokyo, Eurostat presented data on trade in goods and services and investment relations between the EU and Japan. By Member States of the EU in 2009, the largest exporter to Japan was Germany with 10.8 billion or 30% of total exports, followed by France (4.8 bn or 13%), UK (3 8 billion or 10%) and Italy (3.7 billion, or 10%). Germany was the largest importer (13.8 billion or 25%) to the Netherlands (8.7 bn or 16%) and the United Kingdom (7.0 bn or 12%). Most Member States have made in 2009 in the trade balance deficit with Japan. The highest deficits were announced by the Netherlands (-6.2 bn), Belgium (-4.3 bn), United Kingdom (-3.2 bn), Germany (-3.0 bn) and Spain (-1.2 billion) and the largest surpluses were registered in Ireland (+1.3 bn) and Denmark (1.0 billion).
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The Japanese electronics maker Sony reported 7-times growth in profits thanks to cost cuts, the company launched last year, transmit Reuters. The positive financial result of the company jumped to 79.2 billion yen (about $ 871 million) on 10.4 billion yen profit reported for the third quarter of 2009. The revenues of the Japanese have risen to 2.24 trillion. yen and operating profit reached 146.1 billion yen. A year ago the company reported an operating loss of 18 billion yen. Sony revised up its estimates for the full financial year ending March 31. The new company is expected to lose 70 billion by Eni, which is 22% more than the announced forecast losses of 95 billion yen. The company of Sony felt the financial crisis in many of the units, but now everything looks that the bad times are passing and company will start making high profits again.
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Nokia, which is the largest manufacturer of mobile phones in the world will cut 220 people from its Japanese affiliates. The measures are part of a restructuring plan ma company. A week ago the Finnish company has already announced cuts to 330 jobs in Denmark and Finland. Although the Finnish company announced the cuts that will maintain its business in Japan. The company, which recorded a loss in the third quarter for the first time since he became a public company, announced several restructuring plans, including distressed at Nokia Siemens Networks (NSN), which plans to cut up to 6000 jobs. Yesterday it became clear that another major player in the mobile phones continues with cuts, by freeing 450 people in its development center in the U.S. The company made very strong cut of employees because of the financial crisis, which hurt very hard the sector of mobile phones.
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China will overtake Japan in economic development and will become the second largest world economy over the next two years. This will give Beijing more influence on the world economic and political scene and will enhance the reputation of the ruling Communist Party in the country, say analysts interviewed by AP. Statistics to be published this week in Beijing will probably show that gross domestic product (GDP) of China grew by an impressive 9.5% yoy in the third quarter. This will further reduce the difference to Japan, which is expected to account most 1 percent GDP growth annually in the third quarter. Economists expected in 2010 or in 2011 China to shift its Asian rivals of the position of second largest economy in the world that Japan held for more than 40 years. Shift in the rankings, however, would be largely symbolic and will have little impact on world trade, according to analysts. In 2008, GDP of the United States amounted to 14.2 trillion. dollars annually, while that of Japan – to 4,9 trillion. dollars. Before the economic crisis to hit China, the country’s economy is growing at double-digit annual growth from 2003 to 2007 to reach a value of GDP of 4,3 trillion. dollars in 2008, according to the World Bank.
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