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We start in Japan where Prime Minister Shinzo Abe is hosting
Russian President Vladimir Putin at a summit in Tokyo.
He's the first G7 leader to host Mr Putin since
sanctions were imposed over the Ukraine conflict.
That's not the only reason it's a big deal.
The two countries have never signed a peace treaty formally
ending World War Two because they are still
in dispute over four islands in the Western Pacific,
which Soviet forces occupied at the end of the war.
But the reality is they have a serious business relationship
Trade between Russia and Japan has soared in recent years.
It is now worth more than $33 billion a year.
That's three times what it was ten years ago.
Japan is cash-rich and Russia is desperate for investment,
particularly to its far eastern region.
Russian officials say some 68 deals have already been signed.
There are reports that its huge state gas company Gazprom
is exploring partnerships with Japanese conglomerates
Basically, Japan needs all of its energy brought in.
At the moment it relies on the Arabian Gulf -
but Russia has huge amounts and is on its doorstep.
It also wants help with issues like cyber security.
Chris Weafer is the co-founder of analysts Macro Advisory Partners.
Welcome to the programme. Darren Cave is that background, but in the
headlines we have also heard that Barack Obama, still US president,
has said they will tackle the hacking situation that came from
Russia. We have heard also that EU leaders want to extend sanctions
against Russia for another six months. None of this seems to
concern Shinzo Abe? Know, and it is not concerning investors. The
markets are strongly this year, just this week we heard that German
companies have invested more in Russia this year in the first nine
months than in all of 2015. People are beginning to look beyond the
Obama administration so it will end Obama administration so it will end
in January when Donald Trump comes in with a different agenda, it is
also clear that the EU struggles more and more each meeting to get a
consensus to end sanctions. The view that business and investors take is
that we are nearly at the end, provided nothing bad happens in
2017. As Aaron points out, the
relationship between Russia and Japan makes a lot of sense, Japan is
energy poor and cashrich, Russia has a lot of energy. These energy deals
could be worked through? Both countries were talking about energy
cooperation before sanctions, we are getting back to that agenda again.
They say there is a lot of energy in Russia and it is very close to
Japan. Japan is looking at the fact that its neighbour, South Korea, has
been raising investment quite substantially in Russia and Central
Asia and does not want to lose out. From the Japanese perspective there
is either the issue of China and Chinese dominance affecting Russia,
perhaps they can act as a moderating influence, rather than if it was
entirely sided with China, which is a great fear.
You look at the picture of Russia and President Putin and you go, what
is going on? Cooperation with the Saudis, a deal with Qatar, deals
with Japan, Putin has this... More of a global vision today? We have
seen that evolving, particularly since 2014. President Putin bemoaned
the fact that what he saw was Russia had moved too closely to the west,
it was going to put all its eggs in one basket. In 2014 there was almost
a knee jerk reaction to the China pivot, that has not worked out.
China has not invested much. Since the last year we have seen Russia
adopting globalisation, diversification, trying to do as
many deals as possible for the Kremlin. That is good business and
good politics. I think globalisation will be the way forward.
Looking forward briefly, how does that tell you about trade deals and
how they will go in the future, we are looking at more bilateral
country to country and putting aside these big multi-country deals? The
belt this is a discussion about globalisation -- this is a
discussion about globalisation and there is thought that it is coming
to an end. If the Trump administration follows through, it
will mark the end of the old-style globalisation. Bilateral deals, I
think bartering is as good a word as any. Russia has always been good at
that and that is the intention, we have energy or whatever rocks, in
return we want investment political support. Bilateral deals,
old-fashioned bartering is where we are heading.
Thank you very much for your time this morning. Have a good weekend.
Pressure on Yahoo has continued to grow after the internet company
revealed that it was the victim of another huge hacking attack
in 2013 - in which 1 billion user accounts were accessed.
The hack was done in 2013, that was revealed yesterday, that it was 1
billion people. The company's shares closed down
more than 6% on Wall Street on fears that a planned $4.8 billion sale
to telecoms firm Verizon According to reports in the US,
Verizon is now trying to persuade Yahoo to amend the terms
of the acquisition agreement The Greek parliament has defied
international creditors providing its bailout funds
and voted through a one-off Plans for the 617 million euro
pre-Christmas handout were opposed by European bodies negotiating
Greece's financial lifeline. A deal agreed earlier this month
to provide the next tranche of debt Prime Minister Alexis Tsipras said
Greece would not be blackmailed. US authorities have accused six
pharmaceutical firms from the US, It is alleged the companies
conspired to raise the price of the antibiotic doxycycline
and diabetes drug glyburide. The civil lawsuit has been
filed in 20 US states. It follows criminal charges being
brought against former executives Figures from the US Treasury show
that Japan has overtaken China China has been selling its foreign
currency reserves in a bid to prop John Sudworth is in our Beijing
bureau and can tell us more. Good to see you, happy Friday. Japan
holds more debt, US debt, than any other country in the world?
That's right, it has taken the crown back, if you like, as the biggest
holder of US debt. It is not because of what it has been doing but what
China has been doing, selling off US Treasuries. What China wants at the
moment, basically, is dollar assets to use them to prop up the value of
its currency, which isn't a huge amount of pressure. All of the
debate we heard in the US election cycle about China devaluing its
currency, the truth is that all the action is focused on trying to prop
up the value, because China fears a rapid and uncontrolled devaluation,
and the more likely it looks that US interest rates will rise further,
the more pressure it puts on the Chinese UN and the more that has to
be done to stem the tide of capital rushing for the exit. What does it
mean for the rest of us? Good question. China is burning through
its foreign currency reserves for the same purpose, added some point
China may need to consider either a devaluation or putting in place
stringent capital controls. But, of course, would send a shocking signal
to the rest of the economy and indeed be likely to have an impact
on us all elsewhere in the world. John, I am glad you raise the
question and answer that, because I was opposed to! Bet I was supposed
to. Asian stocks struggled for traction
on Friday as global markets continued adjusting to the idea
of higher US interest rates. Remembering a lot of those emerging
economies are holding US dollar debt and higher interest rates in America
- makes that debt more Europe - pretty much the same story
- still digesting the FED decision and looking to Wall Street -
which I must say had its worst day in two months or put it this way -
four stocks fell for every one that Talking of the US - let's pop over
and see what should be making the biz headlines
today, here's Samira. Investors will be looking for more
fallout from the revelation that Yahoo faced a massive data breach
affecting 1 billion customers. How is the US housing market herring
these days? The commerce Department is expected to say that housing
starts fell in the month of November.
Building permits are expected to slip for the month. With the recent
rise to US interest rates, many will be paying attention to the housing
market and how higher borrowing costs may impact that sector.
Finally, error parts maker Honeywell International is scheduled to
announce its financial expectations for the year 2017 before US markets
opened for trading. Joining us is Jane Foley, Senior
Currency Strategist at Rabobank. Thank you for coming in. We wanted
to start with sterling, it has rallied recently? Looking back to
October, we had a sharp fall in sterling on top of what we had after
the referendum in June, that is because the market was very fearful
of hard Brexit. That just means Brexit without access to the
European single market. Since then, the market has taken a different
tone and has begun to think that there might be access after all,
sterling has a very binary relationship with talk about hard
Brexit, soft Brexit. Since October, sterling has performed better. This
year has been very political, Trump, Brexit, the Italian referendum. What
will the market to be keeping their eye on next year? Politics? Very
much so, Brexiters very much there, in 2017 we will find out how
complicated Brexit will be, then it is elections in Europe. We have seen
in the US and Brexit lots of protest votes, movement towards the far
right and the far left in some countries, the elections next year
we have the Dutch elections in March, the French presidential
election in the spring and the German election. We are likely to
see more votes cast for the far right, but opinion polls right now
suggest they will not be able to form a Government in the Netherlands
and France, certainly not in Germany, so the euro will be there
Eve Pollard tile, it will have a dominating effect on the markets.
The opinion polls say that the far right will not be able to farm --
for those governments. Will be US dollar continue going up? May before
now, but we are a bit sceptical about the revelations so maybe
things will be looking different by the end of next year. We will see
you shortly for a look at the paper. -- papers.
The US central bank raised interest rates this week -
and said more hikes are probably in the works for next year.
We'll chew over that - and the rest of the week's news
with our economics editor Kamal Ahmed.
You're with Business Live from BBC News.
A few months ago, the future of low-cost airline
Then it secured ?165 million of funds from its shareholder,
Greybull Capital and has just updated the City on its profits.
Joining us from the BBC Newsroom is Andrew Swaffield,
Great to have you want the programme. Let's be frank, a hell of
a year for you guys? Slightly relieved with the numbers today? I'm
pleased with a profitable results, ?48 million EBITDA profit in a
difficult year with a combination of terrorism and the collapse in the
value of the pound, as I'm sure your viewers are aware the British
airlines take most of their revenue in pounds and most of our costs go
out in euros and dollars, sue the exchange rate has a big effect. It
has been a challenging year, but pleased to be profitable and looking
forward we see strong bookings, especially for next summer, which we
are encouraged about. On the point of looking forward, you are going to
have new destinations, but I want to talk about a new fleet, a new fuel
efficient fleet you will bring on board, around 2018? Finnair
introduced the Airbus 350 and now saves a million bucks a year on fuel
on that aircraft, you're looking at 18 of those, a savings of 80
million, these new fuel-efficient planes are important? The Boeing 737
Max eight comes in from March 2018 for us, we expect 24% fuel savings
on an annual fuel budget of ?130 million. That is a phenomenal boost
to the bottom line. It is great for the environment as well and these
are much quieter aircraft. They also have a much more customer friendly
interior as well. Very excited. I'm sure the customers will be
excited. Thank you for joining us. Let's see what is going on live
page. Which? Is bringing a super complaint against the banks, to help
people tricked into transferring money into a fraudster's account but
unfortunately it looks like they will not get them to pay the money
back but they want to give them more assistance. OK.
You're watching Business Live - the leaders of Russia and Japan have
agreed more than 60 trade deals as Shinzo Abe becomes the first G7
leader to host Vladimir Putin since sanctions were imposed
on Moscow because of the Ukraine conflict.
A quick look at how markets are faring.
They are still digestive and what we saw on Wednesday, same old story.
American Central bank, the US Fed, been a long time coming, they
pressed the button, the cost of borrowing rose in the world's
biggest economy but the markets are still digestive that. It's one of
the big stories of the week. It is what we are going to talk to Kamal
Ahmed about. He joins us to talk about that story. The US Federal
Reserve have raised interest rates, the UK Central bank held it steady,
why the different approaches? It is about economic performances.
We are seeing macroeconomic trends that will dominate next year, so if
we look at America and why the Fed raised rates after threatening to
four 12 months, the American economy is strengthening, clearly. -- for 12
months. Unemployment is at record lows, some inflation is coming back
into the system and the world is waiting to see what President-elect
Trump will do on the fiscal side with boosting infrastructure
investment. That compares with Europe, Britain and the Eurozone and
the other members of the European Union where growth is still
relatively weak, there are still fears over the trajectory of travel
for the economies in Europe and the European Central Bank still doing
negative interest rates to stimulate the economy monetarily. And then you
have Asia and the problem of capital flows coming out of Asia into the
American markets because there are higher levels of yield so the Asian
currencies are under pressure. America is going in One Direction,
Europe in the middle and Asia on the other side, this big diversion will
be the big macro trend for next year. What does that mean in real
terms, the US powering ahead and we are back here. It is about
investment money. If you imagined a big investment funds which look
where to put the money in the investment in businesses which
create jobs, they are thinking to themselves, where will I get the
best yield and return for my money? America looks more attractive
because of high interest rates meaning you get better returns and
the banks are operating with better profit margins meaning they invest
more into the economy, lend more to businesses and at the same time as
there are still fears about Europe, talking about political risk on the
programme already. In Asia we have the big issue of what is the
relationship between Japan, China and Russia? If America becomes more
in Schiller how will that play out? The Asian economies have these
issues are very connected to America. If capital flows to America
how will the Asian economies perform? We can now talk about EU
sanctions, as we hear they have been extended against Russia for another
six months. Not all EU countries were in favour, they wanted it
easing slightly because of the impact on their economies. Germany
is the country that has the strongest links in trade terms with
Russia, but again this is all about the issue around the pivot and where
does Russia now look to for allies. Of course, in the Middle East and
what is going on in Syria will have some effect about the economic
relationships with the rest of the world. America may now have a more
friendly President in President-elect Trump than it has
had under President Obama. And also, what will the relationship be
between China, Russia and Japan in Asia? And at that stage, the
European Union is worrying, to an extent, given the rise in commodity
prices. Russia still produces a third of commodities exported around
the world. What will Europe's relationship be with Russia if we
have this aggressive sanctions regime at the time Russia is looking
to increase its economic activity with other countries around the
world. I thought we would have 20 seconds, I was going to ask about
the Fox and Sky deal, they tried five years ago and failed. They are
looking for a bigger content platform to take them from Europe,
India and America and bring all of those bits of the business together.
It's part of the picture, we are seeing content providers hooking up
with distributors. Kamal Ahmed, thank you for your time
this morning. Venezuela's most popular
banknote is no longer The 100 Bolivar note is worth
less than two US cents. And the country's economic crisis
has meant extradordinary They will introduce new coins and
banknotes. The International Monetary Fund
estimates that next year's prices And this latest move
is already causing even more Joining us is Jane Foley, Senior
Currency Strategist at Rabobank. We are going to talk through the
papers. Starting with the story we mentioned at the top, these flatpack
apartments, flats being used as one way to tackle the UK's housing
crisis, they are being used around the world and also in the UK. These
are in south London in the picture. I think it looks amazing.
Is about the size of a shipping container, containing a two-bedroom
flat. It says in the article, it had something that cost. So much for the
highlighting! What do you think of these? The cost is 20% cheaper than
a traditional house and this particular product in Luton the
article says will be sold off, so these flats are temporary but the
beauty is they can be taken down and rebuilt somewhere else up to five
times. Just take them off and pop them like Lego. They are timber
framed and I am trying to build a timber framed house myself so I can
confidently say I would live in one of these. They are timber framed and
in the factory big kitchens and washing machines are put into them
and they are dropped in place from the back of a lorry already done.
The lift and stairs must be put in afterwards that they have a fairly
fast completion time. I must say, the reports from the residents here,
people who have been moved into them, are very positive. I think
they are a great solution. If it works.
Given the prices of London property. This report size 120,000 children
homeless at the moment and they also cite that although we are building
more houses we are nowhere near building as many as we need to at
the moment. Let's talk about the big hacking
story. Yahoo, they came out and said they had 1 billion accounts hacked
in 2013, apparently didn't know about it. This is the thing, we
didn't know about it, we knew about a scandal in 2014, 500 million
accounts, and this is something we hadn't heard about and it happened
before and it was 1 billion accounts hacked. Did they really know or not?
They have been negotiating this near $5 billion deal with Verizon, the
former boss walked away with a nice big paycheque. They are talking
about having to walk away from the steel or maybe discount it and the
discount is reported in here today are up to 3 billion, so 3 billion
potential discount on a deal worth 4.8 billion is huge. Verizon's
concern is that Yahoo will lose users and they will lose the
valuable customer base. Yes, this is why they want to buy Yahoo to rival
the likes of Facebook and Google. They want consumers' information to
help them with advertising. That is what they want and if consumers walk
away there is nothing there for them. Grace Dove, Jane. Merry
Christmas, have a wonderful time off. That's it. You are off for
Christmas as well. I am, so lucky. That is it for
today. More business news on Monday. Hi, it has been a cloudy week and
today will be a cloudy day again. Weather front across western areas,
you can see on the satellite picture coming across the Atlantic and
stalling and becoming slow-moving. This streak of cloud is a front