Mizuho Financial Global: East Asia Economies Slowing Amid Apprehension

Weaker than expected trading activity in China and India and anxieties concerning the United States quantitative easing programme is holding back Asia’s growth prospects this year. Growth in Asia and the Pacific will likely result in diminished figures when judged against earlier projections. While economic activity will probably approach more sturdy levels next year, circumstances dictate that the region needs to be attentive so as to defend against financial instability in the short term and accelerate structural reforms in order to support economic growth over the longer term.

In an update to reports from financial analysts at Mizuho Financial Global, they have revised figures of gross domestic product downwards and reset their growth forecast for the region to 6% from 6.6% predicted in April. There have been fluctuating expectations on when the US Federal Reserve’s QE program would be wound back, which has generated an exodus of foreign capital from emerging markets, especially from India and Indonesia. While sudden outflows of capital have unmasked certain vulnerabilities in the region, it has substantial current account surpluses and adequate foreign exchange reserves.

However, capital flow instability highlights the need to monitor the financial markets closely and the need to push ahead with belated reforms in foreign direct investment, infrastructure development, fiscal consolidation and social protection programmes, in order to generate growth over the long term. While China’s recent endeavours to restrict credit and the shadow banking system, the authorities are hoping to redirect the economy along a more supportable growth path and recognise the slowing of India’s economy has been due to industry and investment bottlenecks resulting from weak infrastructure and deferred structural reforms.

According to financial analysts at Mizuho Financial Global, although weak performances, lacklustre exports and moderating investment currently that will curtail Southeast Asia’s growth, affecting Thailand, Indonesia and Malaysia, surprisingly, the Philippines economy is predicted to perform strongly. The region is predicted to grow by 4.9 per cent this year, with the pace quickening to 5.3 per cent next year as investment recovery and stronger exports, reinforced by enhanced global trade and currency depreciations reignites.

About Mizuho Financial Global:
Mizuho Financial Global is an independent, full-service brokerage, wealth management and business management concern dedicated to providing pioneering capital appreciation and wealth preservation solutions to affluent individuals and families and businesses.

Without exception, they place the welfare of their clients first and foremost and they take great pride in knowing that they are the first port of call for their investment and financial affairs. They constantly exceed our clients’ expectations by going the extra mile to deliver the service and, most importantly, the returns on investment their patronage demands.

Contact:
Address: SHINAGAWA CRYSTAL SQUARE BLDG. Suite No. 901,
1-6-41, Kounan, Minato-ku,
Tokyo, 108-0075
JAPAN

Telephone: +81-3-5782-8708
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Mizuho Financial Global: Japan Still Short of a Plan to Address Debt

“Abenomics”, the creation of Prime Minister Shinzo Abe, is already having an effect and has had investors cheering as renewed government spending and radical monetary easing aimed at ending 15 years of deflation in Japan, were initiated. The yen has devalued sharply and stocks are riding high, with the IMF sanctioning it amid Japan just avoided being accused of currency manipulation. But analysts at Mizuho Financial Global warn that it would be prudent for Japan to address its rising debt levels with comparable vigour by cutting welfare benefits and raising taxes in the medium term.

The problem is that the situation in Japan is so severe its gross public debt is projected to reach 230 per cent of GDP by 2014. The OECD gave its approval to Abenomics in a recent report but advised Japan to do far more in arresting increasing debt, saying that a reversal in the rise in the debt-to-GDP ratio is crucial. The same applies to the IMF, that want to see Japan prepare more ambitious plans to tackle the debt crisis that also include structural reforms to shift the economy into “higher gear”.

For years Japan’s low interest rates has allowed it to issue debt and not be inundated with servicing payments and the Japanese people, who are known for their propensity for savings, were content to buy government bonds. In stark contrast to countries such as Greece, nearly all debt in Japan is held domestically. However, risks persist, particularly if interest rates rise, which would add to Japan’s fiscal quandary, thus damaging the economy and the institutions holding government bonds.

Japanese policymakers, especially Finance Minister Taro Aso, have talked of risk mitigation, saying the government are well aware of the issue and that they are paying attention to it. But, even if interest rates remain low, Japan still needs to attend to long-term structural problems to rearrange the economy into a more supportable position. Analysts at Mizuho Financial Global, given the unparalleled extent of its debt ratio and the threat of higher interest rates, say that Japan needs a dependable medium-term plan to include spending cuts, tax increases and enhancements to its fiscal policy framework.

About Mizuho Financial Global:
Mizuho Financial Global is an independent, full-service brokerage, wealth management and business management concern dedicated to providing pioneering capital appreciation and wealth preservation solutions to affluent individuals and families and businesses.

Without exception, they place the welfare of their clients first and foremost and they take great pride in knowing that they are the first port of call for their investment and financial affairs. They constantly exceed our clients’ expectations by going the extra mile to deliver the service and, most importantly, the returns on investment their patronage demands.

Contact:
Address: SHINAGAWA CRYSTAL SQUARE BLDG. Suite No. 901,
1-6-41, Kounan, Minato-ku,
Tokyo, 108-0075
JAPAN

Telephone: +81-3-5782-8708
Facsimile: +81-3-5782-8707
http://www.mizuhoglobal.com
info@mizuhoglobal.com

Mizuho Financial Global: European Debt Crisis Causing Anxiety

Although economic growth in Asia remains robust, an interest rate cut in Australia and reduced economic growth estimates highlights the extent to which the economic troubles of Europe and the United States are spilling into the region. Trade and financial activity have already started to weather the turbulence in Europe and they risk being diluted further if the European debt crisis become an economic crisis.

According to financial analysts at Mizuho Financial Global, “The economic climate is changing very rapidly, not just weekly and daily, but hourly. Growth forecasts for the region — which includes China and much of Southeast Asia — dropped to 7.2 per cent, from a previous estimate of 7.5 per cent and it could go as low as 5.4 per cent if the West’s troubles intensify and tips the United States and Europe back into recession. However, there are hopes of at least a modest improvement in the United States after some better-than-expected manufacturing and jobs data, although unemployment remains obdurately high.

European policymakers are to gather in Brussels to create a solution to the Eurozone’s sovereign debt problems, as over the last few weeks the crisis has spread beyond the peripheral Eurozone nations and taken hold in larger economies like France and Italy, which has severely dented investors’ confidence. This rapid corrosion has prompted a number of support measures from the financial institutions and the European Central Bank has lowered interest rates and is soon expected to do so again.

The Asia-Pacific region is not so laden with high government and household debt levels as Europe and the United States, and Asian banks have little exposure to European debt. However, the region depends on Western markets for its products but economic growth in China has decelerated as Beijing tries to cool down markedly rapid growth. Analysts at Mizuho Financial Global say that trade in Asia is now being affected by reduced economic activity in Europe, with the joint problems of sovereign credit and the banks, which is likely to put the dampeners on economic activity over the period ahead.

About Mizuho Financial Global:
Mizuho Financial Global is an independent, full-service brokerage, wealth management and business management concern dedicated to providing pioneering capital appreciation and wealth preservation solutions to affluent individuals and families and businesses.

Without exception, they place the welfare of their clients first and foremost and they take great pride in knowing that they are the first port of call for their investment and financial affairs. They constantly exceed our clients’ expectations by going the extra mile to deliver the service and, most importantly, the returns on investment their patronage demands.

Contact:
Address: SHINAGAWA CRYSTAL SQUARE BLDG. Suite No. 901,
1-6-41, Kounan, Minato-ku,
Tokyo, 108-0075
JAPAN

Telephone: +81-3-5782-8708
Facsimile: +81-3-5782-8707
http://www.mizuhoglobal.com
info@mizuhoglobal.com

Mizuho Financial Global: Foreign Investment to Stimulate Growth in Asia

Trends in Asian foreign direct investment are still set to see a rise in investment in China and the overall Asian markets next year, regardless of an increase in China’s manufacturing costs. India is now poised to replace China having the highest rates of growth, with China slightly trailing. The Chinese economy has been knocked by the global slowdown and demand for its products, as demonstrated by the low growth rates in the Eurozone and the United States, together with a vigilant recalibration of its domestic economy to sit more comfortably with a more resilient consumer economy.

Asia is leading global GDP growth figures this year, again led by China, India and Vietnam. Figures for ASEAN are forecast to be slightly depressed from earlier predictions, to 6 per cent, principally because of the severe flooding that is damaging Thailand’s economy, one of the region’s largest. ASEAN, a collection of 10 nations, will have a market of nearly 600 million people and has agreed to free trade agreements with China and India. According to analysts at Mizuho Financial Global, the same trend is likely to continue into next year, as there are signals that the US economy will pick up and fuel a renewal of trade with China. The Eurozone continues to be down in the dumps, with figures signifying that to build business growth in the US and Europe, whose domestic economies persist in performing listlessly, companies need to explore new markets, especially in Asia.

A noteworthy factor is the rise of India, a country that offers solutions to the manufacturing supply chain: a comparatively cheap labour force and a flourishing domestic market. It is also interesting to note that the population of ASEAN is roughly 20 per cent higher than the entire European Union, which corresponds to a huge consumer market that has the ability to purchase high value commodities. Financial analysts at Mizuho Financial Global see ASEAN as the main driver that will command continuing foreign investment into China, India and ASEAN, and its free trade agreements with China and India should also help facilitate sales to these markets. Next year should be time for corporates to expand into these Asian growth markets and develop new sales while Western markets continue in economic lethargy.

About Mizuho Financial Global:
Mizuho Financial Global is an independent, full-service brokerage, wealth management and business management concern dedicated to providing pioneering capital appreciation and wealth preservation solutions to affluent individuals and families and businesses.

Without exception, they place the welfare of their clients first and foremost and they take great pride in knowing that they are the first port of call for their investment and financial affairs. They constantly exceed our clients’ expectations by going the extra mile to deliver the service and, most importantly, the returns on investment their patronage demands.

Contact:
Address: SHINAGAWA CRYSTAL SQUARE BLDG. Suite No. 901,
1-6-41, Kounan, Minato-ku,
Tokyo, 108-0075
JAPAN

Telephone: +81-3-5782-8708
Facsimile: +81-3-5782-8707
http://www.mizuhoglobal.com
info@mizuhoglobal.com

Mizuho Financial Global: Japan’s Tsunami Estimated at $300 Billion

In Tokyo, a global financial hub, the city has persisting blackouts because of the destruction of the Fukushima nuclear power plant. Factories, farms, roads, railways and electricity lines were destroyed, while almost half a million people having been displaced and made homeless. Despite the damage, many people hope that rebuilding might help the Japanese economy, while Japan’s government says the total cost of the damage could reach $309 billion. If this estimate is accurate, it would make the earthquake and tsunami one of the expensive natural disasters in history.

According to financial analysts at Mizuho Financial Global, the cost of the tsunami includes the destruction to businesses, infrastructure and housing and says the coming months will be tough for the country. It may well be that the reconstruction needed in the short term that the country will perhaps suffer up to three quarters of negative growth. But in the long term they believe this will be good for the Japanese economy and a stimulus that would push up growth for the coming two or three years.

The tsunami is affecting every aspect of economic life and the United States and several other countries have banned certain Japanese products because of worries about likely contamination from the nuclear plant. Japanese companies are worried that there could be far wider consequences for their businesses, especially for Tokyo’s largest fish and vegetable markets in the world. Every day tens of thousands of tons of produce from Japan are traded in vast warehouses.

Although Japan’s bullet trains are running again from Tokyo to the tsunami-hit Tohoku region and freeways heading north are opening up, many international companies have moved their staff out of Tokyo, dreading a calamity at the Fukushima nuclear plant, with meetings, seminars, and events being cancelled. Tourist numbers have also plunged. Analysts at Mizuho Financial Global say that growth remains weak as Japan’s economy only recently emerged from recession. However, with a projected total of 25,000 people dead or missing, it could take months, if not years, before the full extent of the damage to Japan’s economy is really known.

About Mizuho Financial Global:
Mizuho Financial Global is an independent, full-service brokerage, wealth management and business management concern dedicated to providing pioneering capital appreciation and wealth preservation solutions to affluent individuals and families and businesses.

Without exception, they place the welfare of their clients first and foremost and they take great pride in knowing that they are the first port of call for their investment and financial affairs. They constantly exceed our clients’ expectations by going the extra mile to deliver the service and, most importantly, the returns on investment their patronage demands.

Contact:
Address: SHINAGAWA CRYSTAL SQUARE BLDG. Suite No. 901,
1-6-41, Kounan, Minato-ku,
Tokyo, 108-0075
JAPAN

Telephone: +81-3-5782-8708
Facsimile: +81-3-5782-8707
http://www.mizuhoglobal.com
info@mizuhoglobal.com