21/09/2016 Asia Business Report

National Executive Committee considered Ozil is to let MPs elect

the frontbench team. -- considered proposals.

It has been dubbed Super Central Bank Wednesday. Markets await

monetary policy decisions from the US and Japan. Revving up, with

Asia's love for speed. The world's fastest car is launched in

Singapore. Good morning Asia, hello world. It is a Wednesday. Glad you

could join us for this midday edition of Asia Business Report. We

kick off with the Japanese and American central banks, and they

often met in the same week but they rarely announce their decisions on

the same day. This Wednesday is an exception and the Bank of Japan

could end up stealing the Fed's thunder. The bank of Japan governor

is known to surprise markets, so what are his options? The cost of

borrowing is below zero but he can cut it further or he could change

the size of the current stimulus initiative. Or he could do nothing

at all. No one seems to know what to expect, except for our very own Asia

business correspondent. Today is the day when he and his colleagues will

decide on monetary policy, but they have to add into the mix the trade

deficit numbers, which was a surprise. They were pretty grim, to

put it mildly. The trade data showed that exports fell by 9.6% from one

year ago, that is against expectations of a fall of 4.6%. If

you look at imports, how much Japan brought into the country, that also

fell slightly, by about 17.3% versus expectations of a 17.8% decline. Why

is all of this important? Because what it ended up producing a result

of was a deficit of around 18.7 billion yen. Against the expectation

of a surplus, of more than 200 billion yen. Basically Japan is

selling less than it is buying. That is bad news for the overall economy,

because of course it is an export dependent economy. Pressure on

Haruhiko Kuroda and the bank of Japan. The thought that the negative

interest-rate policy they implemented earlier this year would

weaken the Japanese yen, boost exports, but instead it has

continued to strengthen the yen, which is bad news for exporters.

Exactly. If you look at the Japanese yen's trajectory since the negative

interest-rate policy came into play earlier in the year, it is up by 18%

year-to-date. So it really shows that instead of pushing the yen down

that the controversial negative interest-rate policy has worked in

the opposite direction. And all of this brings into question this

whatever it takes policy that we have seen not just from Japan's

Central Bank but other central banks like the ECB, where we are going to

throw the kitchen sink at our economic problems and monetary

policy is going to solve all of our issues. None of this is working. It

has been three years of a massive stimulus programme in Japan but that

key structural reform Peller of Abenomics has yet to come into play.

Indeed, co-ordination is to be improved to be able to jumpstart the

economy. Thank you so much for your insights. A deal has been announced

in China, which will create the world's second largest steel

producer. The leading company is buying its debtladen rival as part

of Beijing's push to overhaul the industry, which is struggling with

production. They have an annual production combined of 60 million

tons a year. The Brexit divorce may seem amicable but the proceedings

have yet to begin, and that is why the former commissioner and Labour

government minister Peter Mandelson is urging businesses to push Britain

to negotiate the best deal possible from the EU and was of the

consequences if they don't. People say to me, well, this divorce

between Britain and the European Union, it doesn't seem to be going

so badly. It's not going badly because it hasn't begun. The

government in Britain hasn't even agreed the terms on which it wants

to seek a divorce. That's why it hasn't started, and when it gets

under way it will take from anywhere between two 25 or six or seven years

to be completed. But my point is this. If we find that we are out of

the European Union, and out of the single market and Europe's Customs

union, without a proper trade deal to support us, what we will be doing

in those circumstances is simply pushing British trade and investment

over a cliff. The head of the American bank Wells Fargo has been

subjected to a three-hour long verbal lashing from the central

banking committee. The chairman was called gutless and told he should

resign over practices which resulted in bank employees opening as many as

2 million accounts, which customers never asked for. He said he was

deeply sorry. Our correspondent has the details. The truth, the whole

truth, and nothing but the truth, so help you God. This was one of the

rare moments in which niceties were exchanged between the Wells Fargo

CEO and US lawmakers. He tried to set an apologetic tone. I am deeply

sorry that we failed to fulfil on our responsibility to our customers,

to our team members, and to the American public. I accept full

responsibility for all unethical sales practices in our retail

banking business. But lawmakers were not buying it. By far the harshest

grilling came from Senator Elizabeth Warren, who questioned how John

Stumpf was taking responsibility for what happened at his bank under his

watch. Have you resigned as CEO or chairman of Wells Fargo? The

board... Have you resigned? No, I have not. Have you returned one

nickel of the millions of dollars that you were paid while this scam

was going on? The board will take care of that. Have you returned one

nickel of the money you owned while the scam was going on? Were back on

the board will... I will take that as a no. The Senator from

Massachusetts was not done there. You squeeze your employees to the

breaking point so they would cheat customers and you could drive up the

value of your stock, and put hundreds of millions of dollars in

your own pocket. And when it all blew up, you kept your job, you kept

your multi- million-dollar bonuses, and you went on television to blame

thousands of $12 and our employees who were just trying to meet cross

sell quotas that made you rich. The legacy of the 2008 financial crisis

loomed large at this hearing. Lawmakers are still frustrated by

extensive fraud in the banking sector, and what seems to be

impunity by senior executives. How do you sell the world's fast and one

of its most expensive cars at a time when people are tightening their

purse strings? Well, these people claim they have the answer, in a new

car. My colleague went to the showroom and spoke to the Company's

board members to see how it sees its sales in Asia. Now the far east and

the Middle East is increasing, and is about one third of our worldwide

sales. And the Company's parent is VW, so how has that scandal affected

your production? Of course the VW group has looked at everything, and

they have looked at us, and since we are positive and strong business

case, and we have a good and order bank, it did not affect us. So let's

have a look at this car. It looks quite extraordinary, very shiny. I

want to see what is so special about it. The special thing is you have

the beast, which is the performance engine, and a beauty. And inside

here you have the beauty, which is the most precious and finest

materials like the invisible carbon fibre here, or the aluminium in

here, or the leather. So we picked really exquisite and very fine

materials for it. It is the world's fastest car. Remind us how fast it

goes again? It goes 420 kilometres an hour, and it is limited to 420

four road use. And are you optimistic about sales here in Asia?

I think Southeast Asia for us is a strong market, Japan is a strong

market within Southeast Asia, and Singapore, and so is the Middle

East, with Dubai, Abu Dhabi and Qatar. You didn't mention China,

though. Not so much China, historically China has been a strong

market for us. Do you know why? Because of luxury taxes. They have a

tax of 165% of luxury goods in China. And there is a clampdown on

corruption. We do have Cheney 's customers. Many of them are outside

of China. The typical Chinese billionaire has several residences,

and he will buy the car then in another resident if he is

interested. And this car, ladies and gentlemen, costs a whopping 2.6

million US dollars. Thank you for joining us on Asia Business Report.

Goodbye for now. The top stories this hour: US

officials have said they believe Russian aircraft carried out

a deadly air strike on an aid convoy in Syria on Monday, despite furious

denials from Moscow.