Japan Stocks Fall on BOJ Decision, Exports, Ratings Cut - Bloomberg Japan Stocks Fall on BOJ Decision, Exports, Ratings Cut - Bloomberg

Wednesday, May 23, 2012

Japan Stocks Fall on BOJ Decision, Exports, Ratings Cut - Bloomberg

Japan Stocks Fall on BOJ Decision, Exports, Ratings Cut - Bloomberg

May 23 (Bloomberg) -- Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce, talks about the Bank of Japan's decision to refrain from adding monetary stimulus and the outlook for the euro. He speaks with Caroline Hyde and Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)

May 23 (Bloomberg) -- Andrew Colquhoun, head of Asia-Pacific Sovereigns at Fitch Ratings in Hong Kong, talks about the firm's downgrade of Japan's sovereign rating and the country's economic outlook. The local-currency rating was reduced one step, and foreign-currency grade two levels, to A+, the fifth-highest ranking, Fitch said in a statement yesterday. Colquhoun speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

May 23 (Bloomberg) -- Jesper Koll, head of equity research at JPMorgan Chase & Co. in Tokyo, talks about Japan's sovereign-rating downgrade by Fitch Ratings, the country's economic outlook and changing demographics. Koll speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Japanese stocks fell, sending the Nikkei 225 Stock Average to its first drop in three days, after the Bank of Japan refrained from adding more monetary stimulus, and as concerns mounted that Greece may exit the euro zone.

Canon Inc. (7751), a camera maker that gets 80 percent of its revenue overseas, lost 2.6 percent after exports rose less than estimated and Fitch Ratings cut Japan’s foreign-currency rating. Mizuho Financial Group Inc. (8411), Japan’s No. 3 publicly traded lender, fell 2.6 percent after Fitch put Japanese banks on watch for possible downgrade. Renesas Electronics Corp. (6723) plunged 9 percent as a report prompted speculation the chipmaker may struggle to return to profit.

“Uncertainty on the Greek issue is increasing, weighing on the markets” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $70 billion. Stocks extended drops as “the yen strengthened, rather than on the BOJ decision itself,” he said.

The Nikkei 225 (NKY) lost 2 percent to 8,556.60 at the 3 p.m. close in Tokyo, with volume 13 percent above the 30-day average. The broader Topix (TPX) slid 1.6 percent to 721.57, with almost six shares dropping for each that gained.

Stocks extended declines as the yen advanced after the Bank of Japan left its asset-purchase and credit-loan programs unchanged, as anticipated by all 14 economists surveyed by Bloomberg News. The policy board kept the key overnight lending rate between zero and 0.1 percent.

“The BOJ decision isn’t a big disappointment,” Mitsubishi UFJ Asset’s Ishigane said. “I don’t think many people expected any action this time.”

Yen Gains

The yen appreciated to as high as 79.52 against the dollar in Tokyo after the BOJ announcement, compared with 80.01 when stock trading opened today. Against the euro, Japan’s currency strengthened to 100.74 from 101.30. A stronger yen reduces the value of overseas income at Japanese companies when repatriated.

Canon sank 2.6 percent to 3,230 yen. Kyocera Corp. (6971), an electronic components maker that derives more than half of its sales outside Japan, lost 2.9 percent to 6,760 yen.

The Standard & Poor’s 500 Index (SPXL1) declined 0.4 percent today. The index added 0.1 percent in New York yesterday, erasing earlier gains after Dow Jones reported that former Greek Prime Minister Lucas Papademos said while it is unlikely the nation will leave the euro, it’s still a risk. European Union leaders will meet in Brussels today to discuss how to revive growth.

Exports Miss

Japanese shares also fell after Japan’s exports rose a less-than-estimated 7.9 percent in April from a year earlier, underscoring the risk that weakness in global demand may limit the rebound in the world’s third-biggest economy.

Fitch cut Japan’s foreign-currency rating by two levels to A+ yesterday with a negative outlook. The nation’s fiscal consolidation plan looks “leisurely,” Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch, said in a statement.

Japan’s widening trade deficit and Fitch’s rating cut are “not big deals, but are negative,” said Masaru Hamasaki, chief strategist at Toyota Asset Management Co., which oversees the equivalent of $23 billion. “Some investors may be selling on minor negative news because they are waiting for a trigger for stocks to rebound.”

Mizuho lost 2.6 percent to 114 yen and Sumitomo Mitsui Financial Group Inc. slid 1 percent to 2,310 yen after Fitch put the banking entities under the lenders on negative watch.

Renesas Plunges

Renesas Electronics, the world’s biggest maker of automotive microcontrollers, plunged 9 percent to 263 yen after the Nikkei newspaper reported, without saying where it got the information, that the company expects to announce plans by July to cut jobs and consolidate plants after posting a loss last fiscal year on slumping sales of its system chips used in digital appliances.

The Topix has plunged 17 percent from this year’s high on March 27 as China’s economic growth slowed and on renewed concern about Europe’s debt crisis. The political gridlock in Greece after an inconclusive election this month reignited concern the nation will renege on austerity pledges required for 240 billion euros ($304 billion) in aid and exit the euro.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

Financial mismanagement allegations stun CONCACAF - YAHOO!

BUDAPEST (Reuters) - Jack Warner and Chuck Blazer, the former president and general secretary of the CONCACAF confederation, were guilty of financial mismanagement on a grand scale during their years in office, delegates were told at their congress on Wednesday.

New CONCACAF president Jeffrey Webb said he was "shell-shocked, dismayed and mad" as the organisation's auditor John Collins unveiled details of the alleged mismanagement to members from the 40 countries of North and Central America and the Caribbean, which make up the confederation.

Collins told delegates that after investigating CONCACAF's finances for the last five months, he could state that under Blazer it failed to declare revenue to the United States Internal Revenue Service for years. Warner registered a $22.5 million FIFA-funded soccer centre in Trinidad to his own name.

While Warner left FIFA in disgrace last year, Blazer is still CONCACAF's representative on FIFA's executive committee and a heated debate, sparked by a motion from the Bermuda delegate, ended with the Congress voting that he should be removed from FIFA's executive.

That decision is not binding on FIFA because only the world governing body can remove an official from the executive, but it was carried by a majority of 34 delegates with only two voting against.

Other delegates wanted Blazer to be reported to FIFA's Ethics Committee following the tax allegations with another round of legal argument trying to establish whether he would come under ethics committee's jurisdiction if he was not involved in soccer.

In a statement issued to the media, Blazer said no tax returns had been declared in the United States because CONCACAF was a non-profit organisation, and no profits had been made in the U.S.

He also defended his record in charge of CONCACAF.

Blazer said in a statement: "I spent 21 years building the confederation and its competitions and its revenues and I'm the one responsible for its good levels of income. I'm perfectly satisfied that I did an excellent job.

"I think this is a reflection of those who were angry at me having caused the action against Warner and having received money had to go through the ethics committee.

"I now have to consider what my options are but to say the least I am very disappointed."

Blazer said he was "not yet in litigation" to retrieve the payments he was owed but confirmed his contract had included 10 percent of all CONCACAF's TV and sponsorship deals.

The commissions and salary for Blazer totalled between US$4 million and US$5million last year, the meeting was told.

At the same time delegates heard that legal action brought by Lisle Austin, briefly CONCACAF's acting president after Warner's expulsion, had cost CONCACAF about US$800,000 in fees.


A succession of delegates demanded a commission of inquiry, the wholesale removal of CONCACAF's executive committee as well as action against Blazer.

Warner walked away from soccer last year and thus did not have to face a FIFA Ethics Commission inquiry relating to bribery allegations surrounding the FIFA presidential election.

Blazer, who did not attend the Congress, resigned as general secretary in December and is no longer employed by CONCACAF.

Auditor Collins told delegates CONCACAF had been misrepresenting its tax status to the U.S. tax authorities between 2007 and 2011 and those liabilities could add up to well over $2 million -- before any penalties that might be imposed.

He also brought gasps of astonishment from delegates when he said he discovered that the $22.5m Joao Havelange Centre of Excellence in Trinidad is not owned by CONCACAF, as all its members had thought, but by two companies owned by former president Warner.

Collins warned Congress that attempts to reclaim the property or its value might be compromised by other legal actions outstanding against the Centre of Excellence.

Jose Brenes-La Roche, vice president of the Puerto Rico FA, said the entire CONCACAF executive committee should stand down as they were "polluted and contaminated" but that suggestion was not accepted by delegates.

Jose Luis Hernandez of Cuba told Webb, who was elected as president earlier on Wednesday: "You are sitting on a time bomb. In all our countries corruption and shady use of resources has a clear name: robbery and theft.

"There are robbers with guns and there are robbers with white collars - and I don't want us to be represented by a thief with a white collar in FIFA."

Webb added that he was "shocked, dismayed, upset and mad - because this should not happen in this day and age and we must decide that it does not happen again."

He also said one cost-saving measure which would come under immediate consideration was ending the $1m-a-year rental of the confederation's offices in Trump Tower in New York's Fifth Avenue.

Webb promised to call an Extraordinary Congress later this year when full financial reports and assessments of liabilities would be available.

In his closing remarks he said: "We need one CONCACAF, Spanish, English, French, Dutch, let us tear down the walls separating us and move forward as one."

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