Global finance blog - news, jokes, life…

Fears of radiation spread to rice as the planting season began in Japan, prompting the government to ban its cultivation in contaminated soil as fallout leaking from a tsunami-damaged nuclear plant dealt another blow to the national diet.

Vegetables and milk were the first foods that sparked concerns about the safety of Japanese agriculture after the March 11 tsunami flooded the nuclear plant and its reactors began to overheat and spew radiation. But those worries intensified when highly radioactive water was spotted gushing from the complex into the Pacific and contaminated fish showed up in catches.

Those concerns have abated somewhat after the leak was plugged and bans on produce from some areas were lifted.

But rice has now come under the microscope as the planting season begins in April and May.

“We had to come up with a policy quickly because we are in planting season,” said Agriculture Minister Michihiko Kano, who announced the ban Friday.

The ban will apply to any soil found to contain high levels of radioactive cesium, and farmers who cannot grow rice will be compensated. Rice grown in uncontaminated soil will be screened.

Yoshiyuki Ueda, a 47-year-old rice farmer from the town of Futaba, where the damaged nuclear plant is located, said he had already given up on trying to plant this year’s crop because of radiation fears.

“The ground is ruined,” Ueda said. “I think it will be a long time until things return to normal.”

Rice is revered in Japanese culture, and the word for cooked rice, “gohan,” also means meal. It’s the key ingredient in sake, and citizens proudly buy locally grown varieties.

Plant workers have spent the past month frantically trying to stop radiation from spewing by restoring cooling systems, but they still have a long way to go. Radiation in water pooling around the plant has slowed the efforts to stabilize the reactors, but workers made progress Saturday toward cleaning up that contamination.

In an unusual _ and controversial _ plan, engineers decided earlier this month to deliberately pump less contaminated water into the ocean from a storage facility they thought might make a good receptacle for the more highly radioactive water.

That dump is expected to finish Sunday, and technicians already are beginning to ensure that the building is watertight, according to nuclear safety agency spokesman Hidehiko Nishiyama.

“We cannot afford a lot of time” in completing this process, Nishiyama said, but he did not say how long it would take.

The Nuclear and Industrial Safety Agency approved those moves as “an unavoidable emergency step,” Nishiyama said.

Several areas of the plant are difficult to reach because of radiation. On Saturday, two 190,000-pound (86,000-kilogram) concrete pumps that have been retrofitted to spray water and can be operated by remote control were on their way to the plant from Atlanta and Los Angeles.

The plant operator, Tokyo Electric Power Co., is also hoping to use T-Hawk drone aircraft made by Honeywell to inspect areas of the plant it cannot access. The drone can be operated from six miles (10 kilometers) away and transmit video and still images.

Until reactors are stabilized, radiation will continue to be released. Earlier, high levels of seawater contamination around the plant prompted the nation that gave the world sushi to set limits for the first time on the amount of radiation permitted in fish. Concerns about food have led several countries, most recently China, to ban imports of some items from Japan.

Rice may be particularly vulnerable to absorbing radiation because it has a long growing season.

So far, soil containing cesium that exceeds the new limit has been found in only two places in Iitate, a village about 25 miles (40 kilometers) from the Fukushima Dai-ichi nuclear complex.

Japan produced 8.5 million tons of rice in 2010, almost all for domestic consumption. It exported just 1,900 tons for sale last year, with Hong Kong, Singapore and Taiwan the top recipients. It imported about 664,000 tons last year.

Fukushima, home to the radiation-leaking plant, was the nation’s fourth-largest rice producing prefecture (state) last year.

Experts say people would have to eat enormous quantities of produce or dairy products before receiving even the amount of radiation contained in a CT scan, but cesium is a concern because it can build up in the body and high levels are thought to be a risk for various cancers.

Source

Dressed in her chic, floor-length Canada Goose coat, Colleen Imrie is in the new Dollarama store on Spadina Ave. shopping for brand name items at rock bottom prices.

Fears about contaminated seafood spread Wednesday despite reassurances that radiation in the waters off Japan’s troubled atomic plant pose no health risk, as the country’s respected emperor consoled evacuees from the tsunami and nuclear emergency zone.

While experts say radioactive particles are unlikely to build up significantly in fish, the seafood concerns in the country that gave the world sushi are yet another blemish for Brand Japan. It has already been hit by contamination of milk, vegetables and water, plus shortages of auto and tech parts after a massive quake and tsunami disabled a coastal nuclear power plant.

Setbacks at the Fukushima Dai-ichi nuclear complex mounted Wednesday, as the plant’s operator, Tokyo Power Electric Co., announced that its president was hospitalized. Masataka Shimizu has not been seen since a news conference two days after the March 11 quake that spawned the destructive wave. His absence fueled speculation that he had suffered a breakdown.

Spokesman Naoki Tsunoda said Shimizu, 66, was admitted to a Tokyo hospital Tuesday after suffering dizziness and high blood pressure.

The problems at the nuclear plant have taken center stage, but the tsunami also created another disaster: Hundreds of thousands of people were forced from their homes after the wave drove miles (kilometers) inland, decimating whole towns. The official death toll stood at 11,362 late Wednesday, with the final toll likely surpassing 18,000.

Japan’s respected Emperor Akihito and Empress Michiko visited disaster evacuees at a center in Tokyo on Wednesday. The visit was marked by a formality that is typical of interactions with the royal couple, but survivors said they were encouraged.

“I couldn’t talk with them very well because I was nervous, but I felt that they were really concerned about us,” said Kenji Ukito, an evacuee from a region near the plant who has already moved four times since the quake. “I was very grateful.”

The emperor and his wife make fairly frequent public appearances, visiting nursing homes and the disabled and attending ceremonies throughout the year. In particular, they are expected to mourn with those affected by natural disasters. Akihito made a similar visit to evacuees after the Kobe earthquake in 1995.

At the Fukushima plant, the fight to cool the reactors and stem their release of radiation has become more complicated in recent days since the discovery that radioactive water is pooling in the plant, restricting the areas in which crews can work. It also puts emergency crews in the uncomfortable position of having to pump in more water to continue cooling the reactor while simultaneously pumping out contaminated water.

That contamination has also begun to seep into the sea, and tests Wednesday showed that waters 300 yards (meters) outside the plant contained 3,355 times the legal limit for the amount of radioactive iodine.

It’s the highest rate yet, but Nuclear and Industrial Safety Agency official Hidehiko Nishiyama said it did not pose any threat to human health because the iodine rarely stays in fish. There is no fishing in the area because it is within the evacuation zone around the plant.

Radioactive iodine is short-lived, with a half-life of just eight days, and in any case was expected to dissipate quickly in the vast Pacific Ocean. It does not tend to accumulate in shellfish.

Other radioactive particles have been detected in the waters near the plant, and some have made their way into fish. Trace amounts of radioactive cesium-137 have been found in anchovies as far afield as Chiba, near Tokyo, but at less than 1 percent of acceptable levels.

“We have repeatedly told consumers that it is perfectly safe to eat fish,” said Shoichi Takayama, an official with Japan’s fishery agency.

Citing dilution in the ocean, the U.S. Food and Drug Administration has played down the risks of seafood contamination online payday loan lenders.

But, as with other reports of radiation levels in food and tap water, fear has begun to override science. Several countries, including China, India and South Korea, have ordered special inspections for or outright bans on fish from areas near the plant.

Ren Cheng, a spokesman for Taiwan’s Mitsui Food & Beverage Enterprise Group that operates several upscale Japanese restaurants in Taipei, said his company has seen a 50 percent drop in revenue since the crisis began.

“We are not importing any food products from Japan. All the Japanese ingredients we are using were all procured before the quake,” he said. “We have put up signs in our restaurants to reassure costumers about the safety of our food.”

Domestic consumption, however, is far more important to Japan, which imports far more seafood than it exports. According to the fisheries agency, the domestic catch typically totals around 5.5 million tons. Less than a million of that gets exported, while another nearly 3 million tons are imported.

In stores near Tokyo’s famed Tsukiji fish market, fresh fish was selling poorly.

Instead, customers “are stockpiling” frozen fish, in the hopes it was caught before radiation began to climb, said Hideo Otsubo, who works at a seafood company near the market.

Tourism to Japan has fallen sharply since the disaster, and sushi chef Akira Ogimoto blamed that dropoff for a 30 to 40 percent decline in customers to his restaurant near the market, where the daily tuna auction is a big draw for foreigners.

Add on the radiation fears, and fishermen are worried their livelihoods will be threatened just when they need to rebuild their homes.

“I worry we won’t be able to sell our seaweed. If the radiation ruins our fishing, we are lost,” said Toshiaki Kikuchi, a 63-year-old innkeeper and seaweed farmer in Soma, a city near the troubled plant.

Meanwhile, TEPCO’s bungling response to the nuclear emergency has been severely criticized by the government and the press. The first few days after the quake saw fires and explosions and confusion has reigned throughout, and the company _ whose shares have plunged nearly 80 percent _ has frequently retracted or corrected information.

There has also been criticism that safeguards were lax at the Fukushima plant. The nuclear agency ordered plant operators nationwide on Wednesday to review their emergency procedures. The agency told utilities they must have on hand mobile backup generators and fire engines, which have been used at Fukushima to cool the reactors. The operators must report back to the agency within a month.

TEPCO chairman Tsunehisa Katsumata apologized at a news conference for the company’s missteps. He has stepped in for the hospitalized president, but fears of a leadership vacuum remained. And Katsumata himself acknowledged that operations could deteriorate if Shimizu were hospitalized for a long time.

“In case of a long absence, it seems to me decisions might not be made smoothly,” Katsumata told reporters.

The company also acknowledged for the first time it would have to completely scrap at least four of the plant’s reactors _ a fate experts and the government had already condemned them to.

The missteps at TEPCO have sparked calls from the opposition for its nationalization, and the Yominuri Shimbun newspaper, citing anonymous sources, said the government was considering it. But Chief Cabinet Secretary Yukio Edano denied those reports.

“My understanding is that the government is not considering such an option at this moment,” Edano said Tuesday. He was more circumspect when asked again Wednesday, but reiterated that the company must work to resolve the crisis and compensate victims.

Source

Prime Minister Silvio Berlusconi’s push for NATO to take command of the Libyan no-fly zone shows how Muammar Qaddafi’s former friend is trying to hedge his bets over the civil war in Italy’s one-time colony.

“Italy is in a tight spot; it has the most to lose,” said Nicolo Sartori, an analyst at the Rome-based Institute for International Affairs. “If NATO takes over and things are run from Italy, this can be presented to rebels as proof Italy did its part to help.” If Qaddafi wins, Italy can say that “it only got involved when the international community rose up.”

Italy, Libya’s biggest trading partner, has threatened to withdraw access to its military bases unless the North Atlantic Treaty Organization take charge of operations. The country’s airfields, which include NATO bases, are closer to Libya than the sites now being used in France and the U.K.

A rebel victory would leave the African oil supplier under new ownership, threatening Italy’s Eni SpA (ENI), the dominant foreign crude producer since Qaddafi came to power in 1969. Qaddafi has called Berlusconi a traitor for participating in the campaign and has threatened to replace Eni, Finmeccanica SpA and other Italian companies with Russian and Chinese rivals.

Eni will continue to work in Libya “whatever the political system,” Chief Executive Officer Paolo Scaroni, told a parliamentary committee in Rome on March 16 online pay day loans.

‘Mad Dog’

For now, Italian companies in Libya are bracing for a hit to 2011 earnings. Ansaldo STS, a railway-technology company, said the Libyan unrest may cost it 100 million euros ($142 million) of revenue this year, more than 5 percent of forecast 2011 sales. Finmeccanica SpA (FNC), the defense contractor that owns Ansaldo, had about 600 million euros in Libyan sales last year.

Still, it was Italy, with its historic and cultural links, that gained the most from Qaddafi’s rehabilitation, culminating with the 2008 “Friendship Treaty” between the two nations. As reparation for its former colonial rule, Italy agreed to invest $5 billion to build a highway, using Italian construction companies such as Astaldi SpA (AST) and Impregilo SpA. (IPG) The agreement led Eni to announce plans for $25 billion of new investment in the coming decades.

Qaddafi, in turn, pledged to further open Libya to Italian companies, curb illegal immigration and invest his oil dollars in Italy. The country’s central bank and main sovereign wealth fund own a 7.2 percent stake in UniCredit SpA (UCG), Italy’s biggest bank. The shares, with a market value of 2.4 billion euros, have been frozen under European Union sanctions against Qaddafi. Libyan funds also own 2 percent of Finmeccanica, 7.5 percent of soccer team Juventus SpA, and the Libyan Investment Authority also holds about 1 percent of Eni, its former deputy CEO Mustafa Zarti said in a March 9 interview.

Source

Britons’ inflation expectations rose to the highest level in 2 1/2 years in February, adding pressure on the Bank of England to raise interest rates.

People questioned last month expected consumer prices to increase 4 percent over the following year, the central bank said in a quarterly survey published in London today. That was the highest reading since August 2008 and compares with expectations of 3.9 percent in November.

Consumer-price growth quickened to twice the bank’s 2 percent target in January and officials predict a further acceleration in coming months. A pickup in expectations may require policy makers to increase interest rates by mid-year to prevent a cycle of rising wages and prices, the Organization for Economic Cooperation and Development said yesterday.

“If they don’t take the inflation mandate seriously it is a mistake,” Buiter said. Inflation above the target for so long suggests you’re a “bad forecaster” and “it may communicate to the world that you don’t take the mandate seriously.”

The Bank of England report also showed that the majority of respondents, 65 percent, said they intended to respond to expectations of higher inflation by shopping around for cheaper goods and services. Just 9 percent said they would push for higher wages.

Data yesterday indicated U.K. wage settlements remain subdued. Weekly pay excluding bonuses rose 2.2 percent in the three months through January from a year earlier, compared with a 2.3 percent pace in the quarter through December. Including bonuses, pay growth was 2.3 percent.

Interest-Rate Outlook

Sixty-two percent of respondents in the Bank of England survey expect the key interest rate to rise over the next 12 months, up from 52 percent in November. The survey was conducted by GfK NOP, which questioned 3,929 people aged 16 and over between Feb. 10 and Feb. 22.

Asked about inflation in about five years’ time, the median answer was 3.5 percent compared with 3.3 percent in November. Expectations for inflation in the 12 months from February 2012 rose to 3.4 percent from 3.2 percent.

Asked to give the current rate of inflation, respondents gave a median answer of 4.4 percent compared with 3.9 percent three months previously. The actual rate was 4 percent in January.

‘Futile Gesture’

Bank of England Governor Mervyn King said earlier this month that while raising rates too soon would be a “futile gesture,” there is still a “perfectly reasonable case for doing it now.” He argued the effect of higher commodity prices on inflation will prove temporary.

Central banks around the world are facing increasing inflation pressures as global demand recovers and commodity prices surge. Crude oil has jumped by about 35 percent in the past six months and remains close to $100 a barrel.

Minutes of the Bank of England’s March 10 decision published next week will show whether a four-way split persisted among policy makers as they argue about the need to raise the key interest rate from the current record low of 0.5 percent.

The bank’s central projection, published in its quarterly inflation report last month, showed that price growth will peak at an average of 4.5 percent in the third quarter and ease to the 2 percent goal in 2013.

Source

Orders to U.S. factories climbed in January by the most in more than four years as demand for commercial aircraft rebounded after slumping the previous month.

Bookings for manufacturers’ goods increased 3.1 percent, the most since September 2006, after a revised 1.4 percent gain in December that was larger than previously estimated, figures from the Commerce Department showed today in Washington. Orders excluding transportation equipment also advanced, propelled by a jump in demand for non-durable goods that may reflect higher commodity prices.

Companies including General Motors Co. (GM) and Deere & Co. are benefiting from improving demand in the U.S. and abroad, which may prompt further gains in factory employment. The Federal Reserve this week said “solid growth” at manufacturers led to stronger labor market conditions in several regions.

Source

Home sales probably fell in January, while orders for long-lasting goods climbed, a reminder that housing lags behind manufacturing as the U.S. recovery strengthens, economists said before reports this week.

Combined purchases of new and existing homes fell 2 percent to a 5.5 million annual pace, according to the median forecast of economists surveyed by Bloomberg News. Durable-goods bookings increased 3 percent last month, the survey showed.

Unemployment hovering near 9 percent means foreclosures may keep rising, adding to a glut of inventory that is depressing property values, hurting builders and homeowners. Growing exports, combined with increasing profits and tax incentives signed into law by President Barack Obama in December, will probably keep orders flowing to companies like Caterpillar Inc.

Source

If you

Bank of England official Andrew Sentance’s drive for higher interest rates to tame inflation may gain traction at next week’s policy meeting after reports indicated the U.K. recovery has reignited.

Services and construction rebounded last month while manufacturing grew at a record pace after the economy unexpectedly shrank in the fourth quarter, surveys this week showed. The reports also showed price pressures in the industries intensified as policy makers battle an inflation rate that’s exceeded their 2 percent target for 13 months.

“The recovery is maybe still fragile but it’s beginning to look a bit more normal and there’s more of a case for starting to nudge rates upwards,” said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. “They won’t hike in February, they’ll hold off. But it’s a close call.”

A split on the central bank’s nine-member Monetary Policy Committee sharpened last month when Martin Weale joined a push Sentance started in June to raise the benchmark interest rate. The division may persist at the Feb. 10 decision after Sentance repeated his call this week and Deputy Governor Charles Bean said keeping rates on hold for now is a “sensible policy.”

Minutes of the bank’s Jan. 13 meeting showed “most” of the committee took the view that medium-term inflation risks had “probably shifted upwards” after consumer-price growth accelerated to 3.7 percent in December. Still, with the majority of officials forecasting that the surge was temporary, the bank left its key rate on hold at a record low 0.5 percent.

Recovery Blip

Reports since then suggest the U.K.’s unexpected 0.5 percent contraction in the fourth quarter may have been a temporary setback.

A gauge based on a survey of service companies from caterers to transport firms surged to 54.5 in January from 49.7, Markit Economics Ltd. said yesterday. A measure of costs rose to the highest in more than two years. Separate surveys showed manufacturing grew at a record pace and construction resumed expansion. The indexes had slumped in December, when temperatures fell to the coldest in a century for that month.

The inflation outlook has prompted investors to add to bets on an interest-rate increase. The implied yield on December 2011 short sterling futures has risen 37 basis points this year to 1.62 percent. JPMorgan Chase & Co. brought forward its forecast for the bank’s first interest-rate increase to May from August.

“The stronger survey data that we had this week and comments from some MPC members prompted the change,” Allan Monks, an economist at JPMorgan in London, said in an interview high risk personal loans. “The timing is particularly hard to gauge at the moment. We’re not ruling out February, it could be close.”

BOE Argument

The central bank debate has largely centered on whether the current bout of inflation is temporary, driven by oil prices and an increase in tax, or is likely to persist. Consumer-price growth probably accelerated again last month after the government raised the sales-tax rate. That would force Bank of England Governor Mervyn King to write to the Treasury to explain why inflation remains above the government’s 3 percent limit.

Sentance told City A.M. newspaper in an article published Feb. 2 that a rate increase now would prevent a “shock to confidence” caused by bigger moves later, and the minutes of the January decision “reflect a growing concern about inflationary pressures that are coming through.” Weale wrote in the Guardian on Jan. 31 that persistent above-target inflation creates a “powerful case” for higher rates.

‘Fragile’

By contrast, Bean tempered his comments on interest rates by saying in a Western Mail newspaper interview that the recovery remained “fragile” and he sees inflation returning to the bank’s target. Nevertheless, he added that signs that a pickup in commodity prices has become permanent and will entrench faster price gains means “we may well have to respond to that by keeping domestically generated inflation lower.”

For now, Sentance and Weale may be unable to convince a majority of their colleagues to join their push. Their colleague Adam Posen remains of the view that the economy needs more stimulus, saying in a Jan. 21 interview that spare capacity and budget cuts will help to cool inflation.

George Buckley, an economist at Deutsche Bank AG in London, said Bank of England Chief Economist Spencer Dale may be disposed to tighter policy since he opposed an increase in the bond plan in November 2009 to 200 billion pounds ($324 billion), the current target. The other members have either indicated a preference for looser policy or not given a clear signal.

Still, a move next week or in May would fit with a pattern for the bank to change policy in months where it’s completed a quarterly forecasts, Buckley said. King will publish the latest projections in London on Feb. 16.

“We think they’re going to stay on hold, but it’s not a done deal by any stretch,” Buckley said. “The risks certainly have shifted over the past week.”

Source

India’s services industry growth accelerated, underscoring the need for more interest-rate increases to tame inflation.

The Purchasing Managers’ Index rose to 58.1 in January from 57.7 in December, HSBC Holdings Plc and Markit Economics said in an e-mailed statement today. A reading above 50 indicates an expansion.

Asian economies from South Korea to China and India are facing inflation pressures, prompting the International Monetary Fund Managing Director Dominique Strauss-Kahn to say this week that central banks in the region need to raise borrowing costs further. The Reserve Bank of India on Jan. 25 boosted rates for the seventh time in a year and signaled more increases.

“Demand pressures are growing in India,” Jay Shankar, chief economist at Religare Capital Markets Ltd. in Mumbai, said before the release. “Food costs are also feeding into inflation.” He expects the central bank to increase rates by at least 100 basis points by December.

Eleven-year government bonds in January posted their first monthly loss since October on investor concern price gains in India will erode returns on the securities. The yield on the 8.13 percent bond due in September 2022 gained one basis point to 8.18 percent as of 10:41 a.m. in Mumbai, after increasing 14 basis points in January.

India’s benchmark wholesale-price inflation advanced 8.43 percent in December, led by higher food costs. The government on Jan. 13 blamed the late arrival of rains for disrupting supplies of fruits and vegetables including onions, a staple in the local cuisine.

Services Growth

Services such as telecommunications and banking make up almost three-fifths of India’s $1.3 trillion economy.

Indian mobile-phone operators including Bharti Airtel Ltd. added 22.88 million new customers in November, a 3.24 percent increase from a month earlier. That’s the biggest gain since June and signals strong consumer demand in Asia’s third-largest economy.

Reserve Bank Governor Duvvuri Subbarao last month increased the key repurchase rate by a quarter of a percentage point to 6.5 percent and raised the inflation forecast to 7 percent by March 31 from the earlier prediction of 5.5 percent.

In South Korea, consumer-price gains breached the central bank’s 4 percent ceiling in January, the government said Feb. 1. Indonesian inflation quickened and input prices rose in China, separate reports showed this week.

Thailand and South Korea increased rates last month and China’s central bank has moved twice since mid-October and also pushed banks’ reserve requirements to the highest in more than two decades. Bank Indonesia has kept its policy rate at 6.5 percent since August 2009, delaying an increase to avoid attracting more capital inflows. Indonesia is scheduled to announce its next rate decision tomorrow.

Asian economies led a global recovery last year that’s been restrained by Europe’s sovereign-debt crisis and a U.S. job market where unemployment has exceeded 9 percent since May 2009.

Source