08/12/2016 World Business Report

Could Brexit mean a new financial dawn for Paris?

A top official there tells the BBC that big banks are already

Plus - a big setback for Abenomics as Japan's growth figures

Welcome. Also in the programme, it was another record close for Wall

Street. What's going on? We will fill you in. Starting with Brexit

and the growing concerns within written's financial industry about

departure from the European Union. In Paris, a top official has told

the BBC that major banks are in advanced stages of planning

to shift some operations from London Financial firms contribute some

12% of the UK economy. Currently they can operate

across the EU from their bases in London, a right they may lose

when Britain leaves the EU. In the city of London some of the

world's financial giants are pondering how to react to an

uncertain future. In Paris they are in full swing. I'm told

international banks are being wooed with special deals on income tax,

corporation tax, they've even been told contracts will be written in

English. This man oversees the French markets. You've had lots of

interest from international institutions. What state are you at

with negotiations? In some cases I would say we are still at the level

of enquiries, informal enquiries, by lawyers and so on. But in other

cases, especially with large banks, it's a normal informal enquiry, but

they are already undertaking due diligence and we have received a lot

of commissions, that will be managed from our perspective, the

relationship with French regulators. So we now know that companies have

taken big steps towards moving. And if they do come to Paris they'll

probably come here, one of 70 new office buildings being planned and

where an influx from Britain is seen as key to attracting the rest of the

world. We are also aiming world companies that are today established

in London, are looking at establishing themselves somewhere in

Europe, for instance we have a lot of contacts with Chinese companies

while looking for a basis in Europe and two are very interested in

France and Paris for many reasons and they are very interested in the

Paris business district. Do you think these companies that would

otherwise have come to London? Probably. In that sense it is now

off the table? Yes. Based at the bankers, regulators and politicians

across Europe, what's clear is that there isn't one city, not even

Paris, that thinks it can take on everything that the city of the

does. But there are lots, Luxembourg, Frankfurt, Dublin and

the French capital that think they can take a big chunk of that

business. And if you put all those chunks together, what you end up

with is a very big problem for Northbridge and's biggest and most

lucrative industries. -- for Britain's. Let's take a look at

Japan. In the last few hours

there's been some bad news Official figures were expected

to confirm a big jump in economic Japan is the world's

number three economy, but for more than two decades it

has been stagnating, plagued by a spiral of deflation

or falling consumer prices. So let's show you some

of the details. In the three months

to the end of September, Japan's economy grew

by an annual rate of 1.3%. That's barely up on

the previous quarter. Preliminary estimates looked

to growth of some 2.2%. They were expected the 2.2%

to be revised upwards, so it seems they

were too optimistic. These figures were supposed

to signal a pick-up for Japan. It has averaged growth of less

than 1% for the past two decades. It has pumped billions

of dollars into the economy in successive stimulus plans

to try to change that trend. The latest was the announcement of a

$260 billion stimulus plan, announced in September. It will kick

in in the New Year. Japanese people have

been reluctant to spend, but in recent months exports have

been making a difference. Demand from the US has been picking

up and the slowdown in China has The Japanese currency,

the yen, has been weakening against the dollar,

following the election This has helped exporters who were

hit by a stronger yen earlier in the year.

In fact, some say there could be a Trump dividend

for Japan if he gets the US economy growing strongly.

Although a poll this week shows many Japanese business leaders

are worried about a rise in trade protectionism.

Let's speak to Martin Schultz, joining us from Tokyo. Good to see

you again. Why did the Japanese economy not perform as well as we

hoped in the last quarter? Well, a lot is in the data. There was a huge

revision of GDP Dato, which is crucial to an economy growing

slowly, as minor changes might give a completely different outlook on

the attitude on what's going on. -- data. Surprisingly we had

surprisingly strong exports. But in the revised data experts are at the

more normal level of 0.3% or something for the quarter and we had

investment data which was much more negative than before. But not

because companies are not putting money in, but because they were

running down their infantry is, so they were brothers selling off what

they had and not doing as much. -- inventories. What's the for Japan in

the New Year? What can we expect? Well, actually the interesting thing

is that the data for Japan is much better than they look like. The main

reason is investment is increasing. Companies used the last quarter to

sell off inventories, stuff they produced before. Now they are

investing again and what a difference a quarter makes, because

we had the elections in the US, we have with the victory of Mr Trump in

the US a much stronger dollar, a much lower yen, which makes it much

easier to export in particular to the US and the rest of Asia. That

helps in terms of the outlook for what Japan is doing because interest

rates are going up in the US and globally, but not so in Japan, so

the outlook for business and investment is much better now than

looking forward to next year. In terms of stimulus, it was announced

this year it would take effect in the New Year. How much of an impact

would that have? So far the impact of government investment was

limited. Now we are seeing a bigger package and overall we are seeing a

reshuffle that we feel around the world. It is a shift from monetary

policy, which has been much less effective than people were thinking

before. It is more fiscal stimulus, getting the economy going not just

from the private side, it is pretty much stable, but also with the

weaker yen, with more exports, more investment into the market in the US

and government demand for healthcare, education and also a

level that hopefully will benefit everyone. Thank you. In other

stories, the financial markets are keeping a close eye on the European

Central Bank. It is holding its policy meeting later. Mario Draghi

is expected to prolong his stimulus programme. They are trying to push

down borrowing costs for governments and firms and inject cash into the

system. The scheme is currently due to end in March, but there are

worries around the election of Donald Trump and instability in

Italy, so they may announced an extension. The Kremlin has announced

the purchase of a 19.5% stake in Russia's largest oil company. The

surprise move sees Glencore cut off $11.3 billion. BP already owns

90.75%. Some state assets will be sold to help boost the budget amid a

two-year recession caused by the drop in global oil prices. And

Western sanctions. So, up, up and away for markets around the world.

It would seem there is no stopping them at the moment. Japan is up over

1%, Hong Kong not far behind. A fairly weak yen, although it has

strengthened the little in the last 24 hours. In the US the Dow Jones is

breaking records every day at the moment. Everybody looking ahead to

what Mario Draghi will announce midday in Europe, that will be key

for markets today. See you soon. Sally will be back as we look at the

international