:00:00. > :00:00.pensions and tax`free savings, as well as moves to boost business. He
:00:00. > :00:00.also froze duty on petrol, spirits and cider and cut a penny from a
:00:07. > :00:15.pint of beer ` but put the price of cigarettes is up. Time now for the
:00:16. > :00:19.latest business news. Scaling back on stimulus. Asian stock markets
:00:20. > :00:34.react to the reduction of bond purchases by the US Central Bank. A
:00:35. > :00:46.pulse check on e`commerce in China. Welcome to Asia Business Report.
:00:47. > :00:52.We begin with the new Fed chief Janet Yellen. She has announced that
:00:53. > :01:00.there might be an increase in US interest rates sooner than expected.
:01:01. > :01:07.Janet Yellen said that the Fed would continue to buy bonds, just not as
:01:08. > :01:13.many. It will reduce its cash injections by $10 billion each
:01:14. > :01:16.month, starting in April. The US economy is recovering and those
:01:17. > :01:23.inside here are forecasting that it will grow from 2.8% to 3% this
:01:24. > :01:28.year. The world 's largest economy will continue to be supported by
:01:29. > :01:34.local interest rates. We anticipate that conditions will likely warrant
:01:35. > :01:38.maintaining the current range for the federal funds rate for a
:01:39. > :01:44.considerable time after the asset purchase programme ends. This is
:01:45. > :01:54.especially true if projected inflation continues to run below the
:01:55. > :02:03.committee's 2% goal. If longer term inflation remains well anchored this
:02:04. > :02:06.will happen. The US Central Bank has downplayed the significance of
:02:07. > :02:11.inflation is a measure of economic health. In her first press briefing
:02:12. > :02:15.as Chair, Janet Yellen said that there was far from full employment.
:02:16. > :02:20.The Fed dropped any specific reference to an unemployment rate as
:02:21. > :02:25.a trigger that might lead to higher interest rates. The reason that we
:02:26. > :02:28.felt that the time had come to revise the forward guidance is not
:02:29. > :02:36.because we think it is not effective. The committee does think
:02:37. > :02:44.that it has been effective. It has had a very useful impact in helping
:02:45. > :02:51.markets understand our expectations in helping them to shape their own.
:02:52. > :03:02.It is becoming, as the unemployment rate gets closer to 6.5%, more clear
:03:03. > :03:07.that we might breach that threshold. The Fed to cut interest rates to
:03:08. > :03:14.near 05 years ago. They have remained there since. Judging by the
:03:15. > :03:21.reaction on Wall Street, investors believe that Janet Yellen is telling
:03:22. > :03:25.them that the timeframe has shrunk. On the back of that statement, Asian
:03:26. > :03:32.stock markets at this hour are in negative territory. Earlier I spoke
:03:33. > :03:38.with an expert on interest rates and Asian markets and I asked him if
:03:39. > :03:44.Asia is prepared for this new message? Not at all. We have seen
:03:45. > :03:52.two indications of this. Back in May, and another scare later in the
:03:53. > :03:57.year last year. In the last few months we have been in a quiet zone
:03:58. > :04:08.where weakness in US state has caused the dollar too soft and ``
:04:09. > :04:16.the dollar to soften. When was she raise interest rates? She said that
:04:17. > :04:20.it might be six months after the taper will stop most people expected
:04:21. > :04:23.August but she is signalling potentially March next year. That is
:04:24. > :04:28.much earlier than people are thinking but it could be pushed back
:04:29. > :04:33.to June. How will this impact monetary policy of Asian central
:04:34. > :04:38.banks? It causes a problem. As US interest rates rise and especially
:04:39. > :04:43.given the ongoing issues around China, it will push Asian currencies
:04:44. > :04:50.down. We will see a quick reaction to Asian currency markets today. As
:04:51. > :04:53.currencies weaken, we will see the type of reaction that were seen in
:04:54. > :04:58.other emerging markets which means that interest rates will climb as
:04:59. > :05:01.well. Which central banks in Asia are vulnerable to this trimming of
:05:02. > :05:15.bond purchases and rising interest rates? That is a tough question. The
:05:16. > :05:20.Philippines might move early, but Indonesia could be vulnerable as
:05:21. > :05:26.well but more on the currency side. In technology, Ten Cent reported a
:05:27. > :05:31.mixed bag of earnings. They reported a 38% jump in revenues but the
:05:32. > :05:35.company also saw its lowest quarterly profit growth in nearly
:05:36. > :05:39.two years for the final three months of last year. That is due to heavy
:05:40. > :05:44.spending to promote its mobile messaging application. Ten Cent has
:05:45. > :05:49.transformed that application from a messaging service to a fully fledged
:05:50. > :05:53.mobile platform for everything from social networking, gaming, personal
:05:54. > :05:56.finance, and even booking taxis. Although Ten Cent is not as
:05:57. > :06:01.well`known as some US counterparts, it is the world 's fifth largest
:06:02. > :06:05.technology company by revenue and fourth largest by market
:06:06. > :06:08.capitalisation. Earlier I spoke to an analyst and asked him what it
:06:09. > :06:18.would take for Ten Cent to be better recognised. It needs a bigger
:06:19. > :06:24.messaging platform. Based on our estimates, it has only 60% of its
:06:25. > :06:29.users in China. This is mainly within Asia, for that other 40%. I
:06:30. > :06:34.would expect that Ten Cent would start to invest more in North
:06:35. > :06:39.America. They have to watch in their rearview mirror as well. What about
:06:40. > :06:46.getting into mobile payments in China? There was a clampdown due to
:06:47. > :06:51.security. Could this hurt Ten Cent's strategy? It has dented
:06:52. > :06:56.confidence but it will not be an issue in the long`term. As the
:06:57. > :06:59.central bank starts to look at their regular trip policy around banking
:07:00. > :07:03.infrastructure, it will start to ease some of these restrictions over
:07:04. > :07:09.time. It is a tremendous opportunity for them to grow. That part of the
:07:10. > :07:15.business could be valued up to $50 billion if it can get a 12% share of
:07:16. > :07:18.the total payments market. That is a lot of cash but the e`commerce
:07:19. > :07:27.business in the mainland, where will it go in the next three to five
:07:28. > :07:32.years? The study that we did last year estimated that the value of the
:07:33. > :07:36.e`commerce market in China to be around $65 billion last year. We
:07:37. > :07:44.project that to be about $300 billion in 2017. To Taiwan now, and
:07:45. > :07:50.things got heated up in Parliament yesterday. Here is a look at what
:07:51. > :07:55.happened. Hundreds of protesters were chanting outside the government
:07:56. > :08:02.building and the crowd then took over a meeting room in an attempt to
:08:03. > :08:05.block a trade deal the government has signed with China. They fear
:08:06. > :08:15.that Beijing will exert too much influence over Taiwan. Kyoto has
:08:16. > :08:21.reached a billions dollar settlement with the US. Creator recalled more
:08:22. > :08:34.than 10 million vehicles over issues with rakes, accelerator pedals, and
:08:35. > :08:40.formats. Hitachi is moving its rail business from the UK to Japan. ``
:08:41. > :08:49.from Japan to the UK. It is building a new factory in County Durham which
:08:50. > :08:56.will open in 2014. For more on that story and other headlines, visit our
:08:57. > :09:03.website. Saturday is World Water Daily, and events to highlight water
:09:04. > :09:08.conservation. We will highlight the problem of global drought from now
:09:09. > :09:13.to them. One impact is rising food prices. US milk farmers have
:09:14. > :09:18.benefited as New Zealand recovers from drought. New Zealand is one of
:09:19. > :09:23.their main competitors. The fields here in the largest dairy
:09:24. > :09:31.province of New Zealand look dry. That is normal but nothing compared
:09:32. > :09:40.to last year's drought. Farmers who could not satisfy the Asian dairy
:09:41. > :09:45.demand, especially China. A highly thirst for milk powder and dairy
:09:46. > :09:51.products has given a chance for the US to plug shortfalls. Sales soared
:09:52. > :09:54.by 70% last year to China, meaning that domestic supplies have been
:09:55. > :09:59.tightened and retail prices in the US have increased by 1.5%. That is
:10:00. > :10:04.good news for American dairy farmers with milk prices at home rising.
:10:05. > :10:08.Every drop they produce is profitable and the prices for much
:10:09. > :10:12.loved dairy products like cheese and ice cream are predicted to climb
:10:13. > :10:16.3.5% this year. Farmers have something to gain here. Last year
:10:17. > :10:20.they fear that the drought could cost $2 billion. It with great
:10:21. > :10:29.weather since then and high milk prices, the industry is rebounding.
:10:30. > :10:31.That is it for us. Do stay tuned to BBC World News for the latest
:10:32. > :10:49.developments on MH 370. Australia is saying to objects shown
:10:50. > :10:53.on satellite image in the southern Indian Ocean could be related to the
:10:54. > :10:54.missing Malaysian plane. It has sent an aircraft to the area to
:10:55. > :10:59.investigate.