22/10/2012 World Business Report

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Hello and welcome to World Business Report. I'm Sally Bundock.

Japan's exporters experience their worst September for three decades,

increasing the odds of a recession in the world's third largest

economy. What will Yahoo's latest chief

executive reveal about her plans Japan has posted its worst

September trade figures in more than 30 years. Exports have been

hit by hard by a lack of demand for Japanese goods, due to the global

economic slowdown and a territorial dispute with China. The strength of

the Japanese yen making their goods more expensive overseas also

continues to take its toll on exporters in the world's third

largest economy. Shipments slid by over 10% in September, from a year

earlier. Our correspondent in Tokyo is Rupert Wingfield-Hays. We were

not expecting good news but this is worse than we were expecting?

Everybody was predicting that there would be a large trade deficit in

September for Japan. They predicted export would fall by about 9%. But

both the fall in exports and the rise in imports has exceeded those

targets. We have seen more than a 10% fall in exports and a more than

4% rise in imports. That is what has led to the record September

trade deficit. The figures across the board are very bad. A 14% fall

in exports to China, more than 20% fall in exports to the EU. And just

a tiny 0.9% increase in exports to the US, despite the fact that the

economy seems to be picking up there. The figures are very bad in

September, largely because of the dispute between Japan and China.

Any sign of that being resolved? Clearly it is hurting Japan in a

major way. The immediate anger that we saw back in September with riots

on the streets of China and the closing of Japanese factories has

passed. But the political impasse between Japan and China has not

passed. The governments are not talking to each other. This is a

crisis that continues. Economists here today say that the figures are

only the beginning. In fact, they say the October figures are likely

to be worse, as people in China stop buying Japanese products,

Japanese cars, electronics, things like that, in the aftermath of that

crisis. What do economists say about the future? I have read this

is Japan possibly heading back into recession. Yes. Economists predict

the third... The final quarter of this year could see negative growth.

That means Japan would fall back into recession. That could be the

case by the end of this year. The government is responding. Today, a

game called for the Bank of Japan to increase monetary easing. The

Japanese government says it is preparing another package of

measures, another stimulus package, to be launched by the end of the

mark. But nobody thinks that will particularly change the direction

of the Japanese economy. The likelihood is that Japan is heading

back into recession. Thank you. As you can imagine, the markets are

not taking this likely -- lightly. We will look at those numbers later.

Among those revealing how they are doing today is Yahoo. Once again,

the former online giant is expected to reveal a tough three months but

investors are hoping its new chief executive, Marissa Meyer, will

reveal more about her plans to turn around the company. When she was

appointed as CEO just three months ago, hopes were high. Just 37-

years-old, she came from Google and three weeks ago she became a mum.

However, she is already back at work. Ben Thompson has more from

New York. When Google's Marissa Meyer to win

Yahoo through this year, she was the third chief-executive in less

than 12 months. That stability -- that turbulence underlines how

difficult it has been to turn their fortunes around. Once synonymous

with the internet, their lead has been eclipsed by Google. It has

also been squeezed by rivals in the news and sports market. Services it

once relied on to drive uses to its pages. Nonetheless, investors are

sticking with the stock. The share price over the past year it

illustrates the turbulence of the departure of top executives and

plans to cut 2000 jobs. But the share price is now back where it

started the year. Investors are hoping that the new boss, won mac,

can do what predecessors failed to do. -- Marissa Meyer. Give Yahoo a

new lease on life. That will involve raising morale inside the

company as well. After so much change, we over staff could be just

as important as winning over the market. Investors will look for

what are the kind of more long-term goals she has in store? Does she

want Yahoo to focus on search? Does she want Yahoo to focus on

entertainment? We do not have answers at the moment. Investors

need more guidance about what the company is and which direction it

is heading in. It all starts here we UN to a website. But much like

its rivals, Yahoo is also struggling to adapt to changing

market, as all of us access the internet on the move. Firms that

rely on traffic and advertising revenue from those sides are

Europe's biggest consumer goods manufacture will also report its

third-quarter earnings. We will be looking at how it has coped in the

downturn. Spanish Prime Minister Mariano

Rajoy secured backing for his austerity drive in a vote in his

home region of Galicia. The election in Galicia had been seen

as a referendum on the Spanish government's handling of the

eurozone crisis. The victory gives the Prime Minister some breathing

space, after polls showing him losing support amid massive

demonstrations against spending cuts in public services and

successive tax hikes. Canada has blocked the takeover of

Progress Energy Resources, saying the bid by Malaysia's state-owned

Petronas is not in Canada's national interest. The deal is

valued at $5 billion. The decision comes as the Canadian government is

reviewing China's offer for Nexen. That deal is valued at $15 billion.

Europe's money worries go beyond the debt crisis. This week,

parliament is expected to vote for a 7% rise in the EU's overall

budget for next year. The demand for more cash from hard-pressed

member-states flies in the face of an earlier decision by national

leaders to go in for some belt- tightening and limit the increase

to under 3%. From building much needed new roads

to restoring historic buildings, from building -- mending bridges to

supporting farmers, EU projects reached parts of Europe where

economic growth has stopped. But the spending increase of nearly 7%,

reached by the EU Commission, has already been knocked back by cash-

strapped countries as out of step with the times. The budget

commissioner says in new spending is essential to counter austerity

and is openly critical of member- states for trying to cut it.

Council is ready to cut by 5 billion. Our proposal is precisely

for areas with the greatest growth and jobs potential. And so there is

a conflict. The European Commission is nervous about the impact of

fiscal austerity. They are pushing for it because that is what

powerful members of the EU want them to push for - Germany, the

Netherlands, a couple of others. But they are conscious of the need

to do something to offset the impact of this spending. One way of

doing that is to boost spending through the EU budget. These are

anxious times for any budgets that rely on continued EU funding. Cuts