Warren Buffett has placed a $6bn contrarian bet on Japan’s five biggest trading houses, the century-old commodity specialists that are increasingly transforming into global venture capital and private equity businesses. Mr Buffett’s move follows an unprecedented $132bn exodus of foreign investment from Japanese equities over the past 32 months on fading optimism about Prime Minister Shinzo Abe’s economic programme. It makes his investment company Berkshire Hathaway one of the biggest shareholders in Mitsubishi Corp, Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp. China’s inclusion of new technologies on an export restrictions list could hamper TikTok’s sale in the US, according to state media reports, in the latest ratcheting up of trade tensions between the two countries. China’s Ministry of Commerce revealed late on Friday the government had added items including those related to computing and artificial intelligence to a list of technologies subject to export controls. In an interview with the state-run Xinhua news agency, Cui Fan, a government adviser, suggested that the new measures could impact the sale of TikTok by ByteDance, its Chinese owner, because they cover some of its underlying technologies. Shinzo Abe will stand down as prime minister of Japan on Friday evening because of a worsening medical condition, according to his ministers and close aides. His resignation, expected in a press conference at 5pm local time, will end an eight-year term during which Mr Abe brought stability to Japanese politics and became the longest-serving leader in his nation’s history. It will ignite a race for the leadership of his ruling Liberal Democratic Party while Japan is struggling to deal with the impact of Covid-19, a deep economic downturn and disputes with its neighbours in China and South Korea. Hiroshige Seko, head of the LDP in the upper house of parliament and one of Mr Abe’s closest allies in politics, said the prime minister had chosen to quit now rather than risk a chaotic exit when his health deteriorated. “He will continue as leader until his successor is decided,” Mr Seko said. Donald Trump said Joe Biden would bring chaos to US cities and spread socialism across the nation, as he used his speech on the final night of the Republican convention to portray his Democratic rival as soft on crime. Speaking from the South Lawn of the White House in front of more than a thousand supporters, Mr Trump accepted his party’s presidential nomination in an address that presented an America at a crossroads, urging voters to choose between “two visions, two philosophies, two agendas”. Cementing his line of attack as he prepares for the critical final stretch of the race, the president cast the election as a choice between a socialist America wracked by political correctness where looters controlled the streets versus a country in which police were empowered to stamp out lawlessness. With little more than two months until the election, he portrayed the Republicans as defenders of cities that were being destroyed by Democrats and said that Mr Biden would allow “mob rule”. Several years after the worst of the great recession, the Federal Reserve embarked in late 2015 on a cycle of interest rate increases to normalise its monetary policy stance and stave off a potential rise in inflation. On Thursday, the US central bank signalled that if could turn back the clock, it might have acted differently, setting off on a new course that will entrench expectations that the Fed will keep interest rates near zero for years. In a virtual speech at the annual Jackson Hole conference, Jay Powell, the Fed chair, jettisoned the central bank’s longstanding policy of pre-emptive tightening to prevent a spike in consumer prices. Mr Powell said the US central bank would allow inflation to exceed its 2 per cent target for periods of time in order to make up for past shortfalls, while accepting that unemployment could move much lower than it had in the past without stoking higher prices and wages. The dovish shift implicitly acknowledges that the Fed’s interest rises in the past decade were at odds with the economic reality of slow growth, strong global disinflationary pressures, and plenty of labour market slack even at low unemployment rates. |
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March 2021
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