Bank of Japan Governor Masaaki Shirakawa said the economy will keep expanding, playing down concern that it may fall into a recession.
“Economic growth will probably keep decelerating for the time being, but return to a moderate expansionary path thereafter,'' Shirakawa said in a speech at the central bank's quarterly branch managers meeting in Tokyo today.
Higher oil and raw-materials costs are slowing global growth and crimping corporate profits, and some economists say Japan is headed for its first recession since 2001. The bank may say next week that the world's second-largest economy is slowing more than it had forecast in April, after confidence among large manufacturers fell to a four-year low.
A recession is “unavoidable'' because rising energy and commodity prices are eroding incomes, said Masaaki Kanno, a former central bank official and now chief economist at JPMorgan Securities in Tokyo.
Shirakawa reiterated that the central bank has no bias regarding the direction of its next policy move.
“The Bank of Japan is committed to implementing monetary policy flexibly by closely checking upside and downside risk factors,'' he said.
The bank in April shelved a policy of gradually raising interest rates. Economists predict Shirakawa and his colleagues will keep the benchmark rate at 0.5 percent this year.
Export Growth
Shirakawa said export growth and capital investment are slowing and companies' profits are decreasing because of rising commodity costs cash advance loans. He described consumer spending as “firm'' and industrial production as “flat.''
Global financial markets remain volatile, the governor said, adding that the U.S. economy is stagnating and the outlook is “uncertain.'' Inflation is accelerating worldwide because of the commodities boom, he said.
“Economic growth has been undershooting the bank's April outlook, while prices have been overshooting,'' said Mari Iwashita, chief market economist at Daiwa Securities SMBC in Tokyo. “It's too early to say whether Japan will slip into a recession or not.''
The central bank's Tankan business survey last week showed companies expect earnings to fall for the first time in seven years because of the increase in costs.
Japan's economy will probably expand 1.5 percent in the year ending March 2009 and 1.7 percent in the following year, the bank said in April. Consumer prices excluding fresh food will climb 1.1 percent this year and 1 percent next year, it said. The central bank will publish a review of the April outlook on July 15.
The bank will release its quarterly regional economic report, which is Japan's version of the Federal Reserve's beige book, at 2:30 p.m. Managers of the Osaka, Nagoya, Fukuoka and Sapporo branches will hold news conferences later today.
The European Commission opened an in-depth investigation on Friday into BHP Billiton’s (BHP.AX: Quote, Profile, Research, Stock Buzz)(BLT.L: Quote, Profile, Research, Stock Buzz) $170 billion unsolicited bid for rival miner Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), with prices of iron ore already soaring.
The European Union’s executive arm issued a tough statement with a list of sweeping concerns but said Australian BHP would be able to respond. The probe has a deadline of November 11.
The move came on the same day BHP matched Rio Tinto’s prices with a near doubling of its own prices for iron ore lumps, mostly produced in Australia and many of them shipped to China.
“Concerns arise in particular as regards the markets for iron ore, coal, uranium and aluminum and mineral sands, because the proposed takeover could result in higher prices and reduced choice for these companies’ customers,” the Commission said no fax payday loan.
Competition Commissioner Neelie Kroes said the firms produced basic commodities and competition in Europe must remain strong.
“The recent surge in commodity prices has had a serious impact on the industries buying these commodities, their customers, and ultimately all the consumers in Europe and elsewhere in the world,” she said in a statement.
BHP would gain new power over iron ore and reinforce its leading position in metallurgical coal, the two main ingredients in steel.
The Commission said that would lead to “very high” levels of market concentration.
The city of Denver Tuesday picked Diamond and Schmitt Architects Inc. of Toronto and local partner Oz Architecture of Denver to design the renovation and expansion of Boettcher Concert Hall.
Six design teams competed for the project.
Denver voters in November approved a $60 million bond issue to finance improvements to Boettcher, including better acoustics. The Colorado Symphony Orchestra, which performs at Boettcher, has pledged another $30 million for the project.
Three acoustical design firms are vying for part of the Boettcher project, and will give presentations to a selection committee later this month. The candidates are Acoustic Dimensions of New Rochelle, N.Y., Akustiks of South Norwalk, Conn., and Kirkegaard Associates of Chicago paydayloans.
The city also announced the hiring of Romani Group Inc. as project manager for the project. Romani has overseen construction of the Colorado Convention Center expansion, the Pepsi Center and Invesco Field at Mile High.
Boettcher was built in 1978. The concert hall has been plagued by poor acoustics.
Belgian Brewer InBev is taking what could be the first steps toward a hostile takeover of Anheuser-Busch Cos.
InBev announced Thursday it has filed a lawsuit in Delaware Chancery Court, where Anheuser-Busch is officially chartered as a corporation.
The lawsuit seeks a judgment to confirm that Anheuser-Busch shareholders can remove without cause the company’s board of directors.
The biggest brewer in the United States has not officially responded to InBev’s offer. Anheuser-Busch did not immediately return a message seeking comment.
InBev’s move comes after media reports Wednesday that Anheuser-Busch’s board is preparing to reject InBev’s unsolicited offer to buy Anheuser-Busch for $65 a share, or roughly $46 billion.
The Belgium-based maker of Stella Artois said it wrote to Anheuser again on Wednesday to assure the company’s board that it has struck deals with a group of banks and has already paid commitment fees to finance the takeover over.
Anheuser has not formally responded to InBev since it first made an offer for $65 per share on June 11.
The Wall Street Journal reported on its Web site late Wednesday that Anheuser is prepared to reject the offer, setting the stage for a hostile takeover battle.
Anheuser is expected to argue that InBev’s offer undervalues the St. Louis-based brewer, the Journal reported. Anheuser also will present its own strategic plan that is likely to include the sale of noncore assets such as Anheuser’s theme parks and packaging business, the Journal reported, citing unnamed people familiar with the matter.
Anheuser-Busch spokeswoman Brenda Williams said the company had no comment on the report. The company has declined comment on InBev’s proposal since it was made, except for a brief letter from Anheuser-Busch Chief Executive August Busch IV which said the board of directors would make its decision in "due course."
Meanwhile, InBev says it has paid $50 million in commitment fees to a lending group that includes Banco Santander, Bank of Tokyo-Mitsubishi, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING Bank, JP Morgan, Mizuho Corporate Bank and Royal Bank of Scotland.
InBev CEO Carlos Brito made another plea for the support of Anheuser’s board for an agreed takeover but stressed time was running out.
"This firm proposal is subject only to the negotiation of mutually satisfactory definitive agreements," he said instant payday advance. "We are committed to entering into a constructive dialogue with you to achieve a friendly combination."
But Brito warned that "time is of the essence."
InBev made no move to raise the offer, insisting that market reaction to its bid "has been extremely positive" and the offer would give shareholders an immediate cash premium of 35% above the 30-day average share price prior to recent market speculation.
The $65 offer for each share is also 18% above Anheuser’s previous all-time share price high in October 2002, it said.
The Journal reported that InBev is prepared to take its offer directly to Anheuser shareholders via a tender offer.
A number of politicians and other groups have come out against the deal, saying it may create a near-monopoly in the U.S. beer market and there are fears of American job losses.
Anheuser-Busch spokeswoman Maureen Roth declined comment on the letter.
Brito repeated in the letter that InBev would not shut any U.S. breweries and would help sell Budweiser beer globally. St. Louis would remain the company’s North American headquarters and "global home of the flagship Budweiser brand," he said.
Anheuser management would be retained at all senior levels and Anheuser board members would be invited to join the board of the new combined company.
Together the two businesses would form "one of the world’s five largest consumer-goods companies," he said.
The beer industry has been consolidating in recent years amid costs for transport fuel and key ingredients and slowing demand in wealthy markets in Europe and the United States. InBev has partly bucked that trend by expanding in Latin America, eastern Europe and Asia.
InBev itself is a product of a major takeover when Brazil’s AmBev took over Belgium’s Interbrew in 2004. Both Brito and the company’s CFO came from AmBev, bringing with them a tight control on finances that has upped InBev’s profits.
Anheuser-Busch (BUD, Fortune 500) shares rose 63 cents to $61.76 Wednesday. InBev fell about 1.1%.
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