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Now for the latest financial news with World Business Report. | :00:00. | :00:15. | |
Abenomics is dealt a severe blow as the Japanese economy contracts more | :00:16. | :00:21. | |
The bosses of Europe's biggest steelmakers go | :00:22. | :00:27. | |
to Brussels to demand urgent action to save its steel industry. | :00:28. | :00:37. | |
Also in the programme, China's stock markets start trading after | :00:38. | :00:44. | |
Japan's economy contracted in the final three months of 2015, adding | :00:45. | :00:55. | |
to a string of setbacks for the government's economic reform policy. | :00:56. | :00:59. | |
Weaker domestic demand was the biggest factor pulling down the | :01:00. | :01:01. | |
economy, then add to that slumping exports and a stronger Japanese yen. | :01:02. | :01:06. | |
Between October and December, official figures show it shrank | :01:07. | :01:10. | |
This is worse than expected - most predicted | :01:11. | :01:18. | |
The news highlights the challenges facing Prime Minister | :01:19. | :01:24. | |
Shinzo Abe in attempting to drag the world's third-biggest economy | :01:25. | :01:26. | |
Many are now saying three years of so-called | :01:27. | :01:32. | |
at the School of Management and Information | :01:33. | :01:40. | |
Nice to see you. Give us your reaction to the situation in Japan. | :01:41. | :01:56. | |
It seems to be getting worse. The short-term negativity is expected, | :01:57. | :02:08. | |
but the problem is people aren't spending because wages are not | :02:09. | :02:12. | |
rising. It is not rising because capital expenditure is not going as | :02:13. | :02:16. | |
well as expected. Corporate activities have not gone as strongly | :02:17. | :02:21. | |
as excited. We saw 1.4% both on capital expenditure, but the | :02:22. | :02:26. | |
Japanese corporate earnings for that period really stood out very | :02:27. | :02:31. | |
quickly. There is a lot of murkiness ahead of us, leading to them not | :02:32. | :02:36. | |
spending as much as expected. Why are big companies in Japan not | :02:37. | :02:42. | |
investing or not increasing wages? A lot of them are sitting on cash at | :02:43. | :02:46. | |
the moment. They have a lot of cash. Why are they not spending it? They | :02:47. | :02:53. | |
have enough cash, with 225 trillion dollars, but why aren't they using | :02:54. | :02:58. | |
it? Firstly because of their nature. Conservative nurse, but moreover, | :02:59. | :03:03. | |
they are concerned about what is going on externally. They can see | :03:04. | :03:13. | |
the slowdown creeping up on a lot of nations, and with the Japanese | :03:14. | :03:16. | |
exports being poised to take the heavily in the economy, these | :03:17. | :03:23. | |
players who sing down their capital expenditure are not investing. We're | :03:24. | :03:28. | |
not getting a good kickstart from these Japanese exporters, and they | :03:29. | :03:31. | |
are very cautious because they can see what is going on externally. | :03:32. | :03:34. | |
Give us your take on this take on whether Abenomics is working or not. | :03:35. | :03:41. | |
This is the three point policy of Shinzo Abe and his team, all about | :03:42. | :03:47. | |
money supply, then increasing government spending, and then trying | :03:48. | :03:52. | |
to reform the structure of the Japanese economy. Is this a sign it | :03:53. | :03:58. | |
is not working or do we need more time for you to kick in? To see a | :03:59. | :04:04. | |
third arrow, the trajectory is much longer than the first two, so we | :04:05. | :04:09. | |
have to wait and see. But the first two certainly not looking as | :04:10. | :04:13. | |
attractive, because his first game is to get them spending on capital | :04:14. | :04:20. | |
expenditure, and that is not happening. That is probably one of | :04:21. | :04:24. | |
the biggest problems in Japan right now. Thank you. | :04:25. | :04:29. | |
Well, despite the bad news about the Japanese economy, share markets | :04:30. | :04:32. | |
The Nikkei 225 was up over 5% earlier. | :04:33. | :04:40. | |
Also China's stock markets have opened for the first time after | :04:41. | :04:43. | |
Nice to see you. It is another manic Monday it would seem. Tell us what | :04:44. | :05:00. | |
is going on. It was a manic Monday early in a Beijing trade and | :05:01. | :05:05. | |
Shenzhen trade, and unfortunately we are seeing some of those losses in | :05:06. | :05:09. | |
Chinese stocks being reduced. It is not as bad as what many investors | :05:10. | :05:14. | |
thought would be. Flashback to last week, Japan plunging around 12%. The | :05:15. | :05:18. | |
sentiment was that mainland stocks would play catch up after this | :05:19. | :05:23. | |
Chinese New Year break. Fortunately, that has not happened. Chinese | :05:24. | :05:28. | |
stocks are down -- unfortunately. They only closed about 1%. Better | :05:29. | :05:35. | |
than expected sales numbers during the holiday season, tough talk from | :05:36. | :05:40. | |
the central bank governor against speculators, and a firm exchange | :05:41. | :05:44. | |
rate. Beijing released figures earlier today showing imports and | :05:45. | :05:48. | |
exports both falling more sharply than expected in January, impaired | :05:49. | :05:53. | |
with a year earlier. But it seems domestic investors at this point are | :05:54. | :05:55. | |
shrugging off Mike this disappointing trade numbers for now. | :05:56. | :06:02. | |
When you talk to dealers, the impact was mainly driven by falling | :06:03. | :06:07. | |
commodity prices and concerns about the impact on Europe. When you look | :06:08. | :06:14. | |
at the over Marco, it has been brittle with the Shanghai and | :06:15. | :06:20. | |
Shenzhen losing about 20% so far this year, and that is about 1.8 | :06:21. | :06:24. | |
Chilean dollars in market value lost so far -- look at the overall | :06:25. | :06:31. | |
market. Ouch. We will see you soon. That is the scene in Asia today. | :06:32. | :06:33. | |
Let's focus on Europe. Steel is back on the agenda today | :06:34. | :06:36. | |
as bosses of some of Europe's biggest steelmakers are in Brussels | :06:37. | :06:39. | |
demanding urgent action to support They will march to the | :06:40. | :06:41. | |
European Commission buildings where industry chiefs and unions will meet | :06:42. | :06:45. | |
with senior commissioners, including the European vice-president, who is | :06:46. | :06:47. | |
responsible for jobs and growth. The EU is | :06:48. | :06:52. | |
the second-largest producer of steel in the world after China, which has | :06:53. | :06:54. | |
been accused of flooding the Last Friday, the European Commission | :06:55. | :06:57. | |
opened anti-dumping investigations Tanya Beckett explains what all | :06:58. | :07:04. | |
the fuss is about. The price of steel has fallen | :07:05. | :07:22. | |
dramatically in the past five years. The steel industry is | :07:23. | :07:29. | |
dominated by China, accounting for almost half of global production. | :07:30. | :07:33. | |
They produced nearly 900 million metric tons last year. But as growth | :07:34. | :07:38. | |
in China's economy slows, it has been sending more steel abroad. It | :07:39. | :07:44. | |
steel exports have surged 51%, whereas Japan and the EU have seen | :07:45. | :07:51. | |
marginal changes. The European steel Association says more than five | :07:52. | :07:54. | |
dozen jobs have been lost across Europe in recent months. With the UK | :07:55. | :08:01. | |
particularly affected. Companies like Tata Steel and Redcar blame | :08:02. | :08:05. | |
high electricity prices and cheap steel from China. With more jobs on | :08:06. | :08:11. | |
the line, the EU took action in January and said provisional duties | :08:12. | :08:15. | |
on Chinese imports of between 9.2 and 13%. But many say these measures | :08:16. | :08:22. | |
don't go far enough. The steel industry employs 328,000 people in | :08:23. | :08:27. | |
Europe, and thousands of these jobs are at risk from cheap Chinese | :08:28. | :08:29. | |
imports. UK banking giant HSBC has announced | :08:30. | :08:32. | |
it is to keep its headquarters Concerns about stricter UK | :08:33. | :08:35. | |
regulations led Europe's biggest bank to launch a review into whether | :08:36. | :08:40. | |
to move elsewhere, with Hong Kong But the bank said it had decided | :08:41. | :08:43. | |
unanimously against the move and that London | :08:44. | :08:49. | |
"offered the best outcome for our We will discuss that in more detail | :08:50. | :08:51. | |
in a few minutes. Toyota says it has resumed | :08:52. | :09:05. | |
operations at all vehicle assembly and parts plants in Japan | :09:06. | :09:08. | |
after its longest domestic production suspension since the | :09:09. | :09:10. | |
March 2011 earthquake and tsunami. The world's top auto-maker said | :09:11. | :09:12. | |
earlier this month that it would temporarily stop all domestic | :09:13. | :09:15. | |
vehicle production from February 8 through 13 due to a components | :09:16. | :09:17. | |
shortage following an explosion at Let's show you the numbers. The | :09:18. | :09:40. | |
mayhem in Asia at the moment. We have 20 minutes of trade to go in | :09:41. | :09:44. | |
Tokyo, and look at that. Over 7% at the moment. The Hong Kong up over | :09:45. | :09:49. | |
3%. The price of oil going down. Let's look at the currency markets. | :09:50. | :09:54. | |
The yen has weakened a little bit, helping those markets in Japan, | :09:55. | :10:01. | |
which has been ignoring that news about its economy shrinking. We will | :10:02. | :10:06. | |
review the papers in a few minutes, so stay with us. | :10:07. | :10:09. |