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Now on BBC News, all the latest business news live from Singapore.
America's central bank makes it clear it is in no rush to raise the
cost of borrowing. The largest e`commerce site in the world,
Alibaba, gets set for what could be the biggest ever public share
listing. Welcome to Asia Business Report.
Is the American economy strong enough to survive without emergency
help Western interest rates have been at record lows since 2008 and
billions has been pumped into the economy. In Washington, the US
Federal Reserve made it clear while stimulus measures might be ending,
it's not rushing to raise the cost of borrowing.
Here at the central bank, the focus was on whether change would be
occurring in the language to describe a rise in interest rates.
That's because the Fed has insisted it won't raise rates until
considerable time after the end of its economic stimulus programme.
With that expiring next month, tension shift to when rates might
rise. The chair of the Fed insisted that guidance of considerable time
shouldn't be linked to a specific date. I want to emphasise that there
is no mechanical interpretation of what the term considerable time
means. As I have repeatedly said, the decisions the committee makes
about what is the appropriate time to begin raising its target for the
federal funding rate will be dated depending. What's the point of
forward guidance if not linked with a date? The Fed needs to adapt to
changing economies. Unemployment is falling, inflation coming back in
line, but it needs the flexibility to adapt to changing economic
conditions. Raising rates too quickly could choke an economic
recovery. Keep them too low for too long and the economy could spiral
out of control. America has been awash with cheap cash through low
interest rates and economic stimulus. Those emergency measures
can't last indefinitely. Shares in Sony have fallen by 12% in
Tokyo today after they said it stands to lose $2 billion this year.
That's more than four times its forecast of just a few months ago.
The company blames a downturn in mobile phone business for the
estimated net loss. Sony has promised a turnaround but will it
deliver? I spoke earlier with a partner at frost and telephone and
asked him if Sony's troubles were linked with a smart phones `` Frost
and Sullivan. It is a balance sheet. They are taking the goodwill they
had in the business. Having said that, the forecast has been lowered.
The positioning is muddied. They aren't at the top end. They aren't a
follower. They aren't acting at the low end. They are in a muddled
position. It isn't the first choice of the customer. Zero at the mass
market. Any indication they are addressing the issues? Apple has
released new products. Samsung will react. There are so many other
brands in the market. I don't see that changing. They are launching a
new product. I don't see anything that will make it a category leader.
I don't see anything that will attract it for the small market.
They don't have a strategy if you look at what they have done. They
will continue to muddle, begging the question, should they be in the
business? Official figures in Japan show exports fell by 1.3% from one
year ago. The data shows Japan shipments to the US declined in
August, adding to concerns of the third`largest economy mightn't be
able to rely on a pick up in trade to help recover from the April tax
hike. News Corp demands of the European Commission have a tough
approach with Google. They say the search engine has
become a platform for piracy and that powers increase in every day
with Google. Google said it tackles piracy rigourously.
EBay has been compromised with users who clicked on some links diverted
to a site designed to steal their credentials.
It was set up to look like eBay's welcome page. Motorists in the UK
are warned about the dangers of using smart watches while driving.
The wrist device are covered by other laws designed to stop people
checking gadgets on the move but officials say any accidents caused
wide drivers distracted by the device will result in severe
penalties. Currency and market watchers are
waiting to see how Scotland votes in its referendum on Friday. Some tip
the pound to head for a fall if it is a yes vote. I spoke earlier with
Tony Nash from Delta economics. If there is a yes vote there will be
volatility, some say 10%. It depends on how people calibrate the value of
that pound. What is the GDP contribution? What stays with
England? The separation isn't for some time. The volatility we will
see is people figuring out the calculation. There are so many
unknowns. The issue of currency and what Scotland users, sharing the
pound, the euro, that isn't decided. That isn't decided yet. Until it is,
it will be difficult to assign a value. Do you see the pound falling
as much as 10% as some predict? It is possible but it depends on the
tone from both sides. If you assume a yes vote, is there an agreeable
tone? Many small countries don't have their own country, it currency.
`` their own currency. Discussion has said that Scotland can't use the
pound when a lot of other countries do that with other currency. An
agreeable tone would help to calm the market and ease volatility. Lots
of countries hold foreign currency in the pound. What impact in the
region? Depending on the value and volatility, if there is a devalued
pound, countries could look at their allocation of the pound, the
third`largest reserve currency globally. If people retain a certain
value to their reserve holdings, they might up their holdings or
switch to other currencies. Not too long and we will know the outcome of
the referendum. One of the world's biggest offerings will take place in
New York with China's leading e`commerce site Ali Bubba expected
to complete it they'll all shares to investors on Thursday `` Alibaba.
Trading opens on Friday to the public. What can the company expect
from investors? The big apple, America's financial
centre. New Yorkers have a reputation as a tough crowd to
please especially with investment as massive Chinese company at Alibaba,
will soon discover when shares begin trading here at the New York stock
exchange. In 20 years trading, it has been one of the biggest events I
have witnessed. Inside this emblem of capitalism, Alibaba, trading and
Alibaba, is about to have what could be the biggest stock offering on the
planet, bigger than Facebook. Such is the anticipation for this trader
who has had a request for shares by a Chinese social media. I am active
on Chinese social media and I have had people chatting with me asking
if I can connect them with their IPO team because they want to buy two `5
million shares of the IPO. Why all the hype? This internet analyst
explains. The company is poised to take advantage of the largest
emerging middle class in the world, China, and the largest consumer
class in the history of the world, China. Alibaba's success has made it
the biggest force in Chinese internet. It's helped turn its
founder Jack Meagher from a teacher into one of China's richest men. ``
Jack Ma. Investors have been told to trust Jack, but should they? This
company comes with unusual risk, including a unique owning structure,
giving Mr Ma control. Despite the risk it appears there isn't a
shortage of investors in the world largest economy covering for Alibaba
in the rise of the world's second`largest economy.
A look at the market and you can see the turnaround in trade this
morning. The Nikkei is up, the Hang Seng and Australia are down despite
those comments from the Federal Reserve in the US. That is it from
this edition of Asia Business Report. Thank you for watching.
Report. I am Mike Embley with the main news
stories. With hours to go before polls open,
both sides in the Scottish referendum campaign have held
rallies as they made their final efforts to win over undecided
voters. President Obama says American forces
won't have a combat mission in Iraq, the day after his top general