21/09/2016 World Business Report

Now for the latest financial news with Sally Burdock

The central banks of Japan and the United States

deliver their decisions on interest rates.

Japan keeps there on hold and the US will make their choice later on

today. Brazil's former president Lula da

Silva, is to face trial on charges of money laundering and corruption

linked to the state oil firm Also in the programme we'll be

meeting an entrepreneur who thinks he knows how to kick

start the UK tech sector. It's being called Super Wednesday,

with announcements from two central bank heavyweights -

the Bank of Japan and the US Federal The Bank of Japan has just announced

its decision to keep interest rates on hold at zero point 1%, -0.1%

although there have been some tweaks to its policy. We have the US

central bank announcing its decision as well later in the day.

of central banks is the focus of so much attention.

As economies have struggled to pick up after the global slowdown -

central bank policy has become increasingly important

Japan has led the way in lowering rates -

in January it controversially dropped interest rates to negative

And the cost of borrowing is hovering at near historic lows

across most developed countries around the world.

Such low rates has meant central banks have had to take other steps

Hence the shift in policy to quantitative easing -

meaning the central banks purchase large amounts of debt

In Europe, for instance, this is done to the tune of 80

billion euros a month and includes buying sovereign debt and corporate

But despite all this unprecedented action inflation has stayed

stubbornly low and growth - except in America -

So the question is what can central banks do now

to boost their respective economies?

Let's go live to our team in Singapore who are waiting

Karishma Vaswani is our Asia business correspondent.

They kept us waiting, didn't they? As I already mentioned, interest

rates are to stay as they are at -0.1%. What else did they announce?

There were a few tweaks to the policy and let me go through some of

those things. The main thing to bear in mind beyond the fact that the

Bank of Japan has decided to maintain the interest rate at that

low level is that it will now purchase Japanese government bonds

so that the ten year yield remains at the same rate. This is important

because it means that there have been many concerns about the

negative interest rate policy that financial institutions, banks,

insurance companies and the suchlike were finding it difficult to make

any sort of profit and they were in a difficult position financially.

This move, according to analysts, was one of the options on the table

and it may help to alleviate some of those challenges. Fundamentally the

problem appears to be that the tool that central banks have in their

armoury, so to speak, they appear to be running out for this sort of

solution that has been presented today, they are minor tweaks in

terms of what the central bank can do. It will be interesting to see

what the statement that we are expecting from the central Bank of

Japan, what they have to say in the next few months. Thank you.

With me is Gervais Williams, Managing Director, Miton Asset

Interesting, that explanation about what has been announced today which

is not much but, I guess, it is an important detail. The Japanese money

market ticked up a little bit after that announcement which came not

long ago. The Japanese yen is strengthening as well. Talk through

your response. They will continue to purchase exchange-rate funds. They

will be slightly wider than before. I'll be a wider purchase. Small and

mid-sized companies as well as large companies. The second thing is that

they are trying to move away from having negative interest rates.

Negative bond yields are toxic for a financial system in the longer term

because if you have a pension thing, if you have a negative interest

rate, you need to have more now than you will let the pay-out. They are

trying to balance a long curve for less negative interest rates. We are

expecting analysis does well from the Bank of Japan as to how things

have gone overtime in terms of it is policy in terms of stimulus, trying

to weaken the yen and that sort of thing. We have not had that news

yet. But the Japanese economy is still on the doldrums. It is not

really getting any sort of significant boost, is it, despite

the efforts of the Prime Minister and the central bank. It is correct.

The economy is moribund and we are looking at demand and supply reform.

They are trying to get the vibrancy of the economy to emerge and that

has not been coming through despite the efforts of the bank. Thank you

for your time. We have of course the Federal Reserve decision later today

and as we just heard, there is no change of rates expected by most

economists in the USA but we will let you know what happens.

The former Brazilian president, Lula da Silva, is to stand trial

for accepting more than a million dollars in connection with a giant

corruption scheme at the state run oil company Petrobras.

The news came as the company announced a new business plan

Daniel Gallas reports from Sao Paulo.

Investors on Tuesday had a glimpse of the future in the past of

Petrobras. A new business plan was announced for the next five years.

It predicts a 25% cut in investment that is because Petrobras is one of

the petrol companies with the highest corporate debt in the world.

A judge finally accepted charges against the former president, saying

he was at the top of this past corruption scheme that went on in

the company for about ten years. The former president himself denies all

accusations and many experts say that it may be difficult to have a

clear case against him. But the former president will go to trial

and will need to answer to the charges. Two years on since the

beginning, it is still not clear what happened to Petrobras in the

past. With all the uncertainty in the oil market, it is not known what

will happen to the company in the future.

Throughout the week we have been asking what it will take for the UK

tech secretary to make a bigger mark on these global scene.

Well, Herman Narula is at the sharp end of this.

He's the boss of the virtual reality firm Improbable -

and has some very clear views on what needs to be done.

If we want to be successful, influential and prosperous we need

to focus our attention on a single breakout success. To make that

happen, I think, we need to change a few things. Culturally we need to be

more comfortable with the idea of selling out and starting a company

to sell something important. In the US, companies are trying to sell

space travel and electric cars. That is the level of ambition that we

need. From a government policy perspective we need to look at

everything we can to prevent successes from the iodine easily

purchased. We need to think about how we make intelligent revelation

within sectors. We need to be in a position where we can support those

successes. Lots more on our website from our technology team here. Do

take a look at our Tech Talent series. This is the Japanese money

market stop you can see reaction is pretty flat, to be honest. But the

yen has strengthened since the announcement. No big dramatic

reaction elsewhere which is encouraging. The price of oil has

risen. Overnight on Wall Street you can see again quite flat. Markets

are still looking ahead to any news, any change in decisions on the

Federal Reserve. That is still to come on Super Wednesday. I would

imagine markets would be extremely sensitive. I will see you soon.

To charity that supports older people have had almost 80,000 social

care workers from other European countries could lose their jobs.

That could