15/06/2016 World Business Report

More than a flight of fancy - investors scramble for safety

as increasing uncertainty about the global economy leads big

With the UK's referendum on it's EU membership just eight days away

we hear from one small business who believes the country

Financial markets worldwide are on edge with investors looking

Today the US Federal Reserve concludes its monetary policy

meeting but the focus is firmly on Europe.

European markets took at beating on Tuesday as investors weighed up

the consequences of next week's EU referendum vote.

Add to that concerns about global growth and the commodity slump

and there is little reason to be bullish. Despite Japan adopting

negative interest rates in January, you can see here its currency,

the Yen, has continued to strengthen against the dollar as investors

flock to major currencies for their safe haven status.

It has risen by more than $200 an ounce since the beginning

of the year, with some economists predicting market uncertainty

is likely to drive the price up even further.

And of course investors have also been flocking to government bonds.

On Tuesday the yield on German ten year bonds went into negative

territory for the first time, with investors effectively paying

for the privilege of leaving their money with the German government.

Let's here about the impact this is having around the world now,

starting in Asia where markets right now are mixed.

Here in Singapore in investors have been focused on the value of the

Japanese yen. It has approached its strongest level since October 20 14.

More people have bought the yen as a safe haven currency because of

concerns over the UK quitting the European Union -- 2014. And also

because of uncertainty over whether central banks like the US Fed for

instance will raise interest rates or not this week. Traders are also

worried about China's economy. The IMF has warned that China faces

growing vulnerabilities and has fewer buffers to deal with any

future shocks. Here in London there is evidence of the flight to safety

in the markets. The yield on German government debt has fallen into

negative territory as investors put preserving capital ahead of any

returns on their money. Government bond yields in the UK have also

fallen. There are three interconnected reasons for this

whisk off attitude. From the start of the year there had been global

worries about the performance of the Chinese economy. Across Europe,

interest rates are low, inflation is low and economic growth is slow. And

then there is what is called Brexit whisk - could Britain leave the EU

in the referendum in that country on June 23? That's creating uncertainty

in the market and encouraging investors into safe haven assets

like government debt. The focus in New York and here on Wall Street is

the outcome of the Federal Reserve's two a policy meeting. The dismal May

jobs report has pretty much rules out an interest rate hike this month

but what investors want to know if not now, well, then when? --

two-day. Adding to the Wall Street concerns are the recent falls that

show growing support of a Brexit. While the US government bonds have

not turned negative, they have flirted with some of its lowest

levels in four years. The one bright spot are the strong US retail sales,

in the month of May. Americans spend money on things like cars and other

goods despite paying more for gas, suggesting perhaps the US economy

has some strength. With me not to discuss

this is Jeremy Cook, Good morning, Jeremy. So, let's

start with the Fed, today's meeting - we're not expecting news from them

pursuant no, it is strange when the meeting is overshadowed by

everything else -- we're not expecting news from them? No. The

May jobs report, 38,000 jobs added, was a poor number, two standard

deviations away from the consensus with 100,000 jobs worse off than

markets were looking for. That has checked everyone's thoughts. Is it a

case of it is so bad that it means the Fed won't raise rates as opposed

to delaying the inevitable rise? Janet Yellen mentioned the UK

referendum as a reason to be cautious. When will the Fed make a

move? On the central scenario that the UK remains part of the EU are

think there is still a reasonable expectation that the Federal Reserve

will raise rates in September. If we see a revision higher to the jobs

number, retail has been good and if that creates inflation pressure,

that is what the Federal Reserve will react too. Talking about safer

havens, the Japanese yen is one of the places to put your money. Why?

When markets get crazy and fearful they want a safe haven. That might

be government debt. In the currency world it is the US dollar and the

Japanese yen. Investors look for large economies, deep capital

markets, the will of law is stable. It has been in a poor state for a

long time and yet people pile money into their currency. They are not

looking for a return on their money but off their money. Look at

inflation dynamics. It is low, nonexistence, and has been for ages

in Japan. Even if they put their money into the Japanese yen it won't

be eroded by inflation and they won't lose money either. Expect it

to strengthen if we see these market interruptions. Not good news for

those exporters in Japan at all. Thank you. It is nice to see you and

of course we will be across everything as it happens here on the

BBC, as you can understand. Let's move on.

While many of the headlines relating to the UK's EU referendum have been

generated by the views of big firms, there are in fact more people

working in small and medium sized businesses, or SMEs,

who will have a chance to vote on the issue.

Today BBC Business continues its series of films focusing

on what this important part of the UK's economy thinks

I am John Hancock, I have been in the fishing industry for 45 years, I

was a skipper for 30 years, the managing director of a company

called Charisma UK limited in porting fresh and frozen fish from

Norway. When I first art of year there were 400 boats and now there

are five or six, and this is down to government policy and of course the

EU and at increasing bureaucracy that is involved in the fishing

industry. Because stocks have recovered, I think we are able to

rebuild the fishing industry, piece by piece, once outside. We're not

going to the halcyon days that we once had but we can regain the core

trades that are needed to run a fishing fleet, engineers, and

electricians, welders, villages, fish packing, everything involved,

which means the community thrives -- filleters. It is about the whole of

the UK and all the Coastal Communities.

The world's biggest stock index provider, MSCI,

has again delayed the inclusion of China's mainland domestic shares

Inclusion on the index would have been a major step forward

for Beijing as it attempts to open up its financial markets

China has in recent months increased its efforts

to reform its often volatile stock market, but MSCI said global

A top US federal appeals court has upheld some of the strongest net

It rules that high-speed internet service can be defined as a utility.

The sweeping decision clears the way for more rigorous policing

of broadband providers and greater protections for web users.

More than two dozen companies have signed a pledge to address gender

inequality in the workplace by regularly reviewing

The pledge is part of the first United State of Women Summit,

hosted by the White House and the 28 signatories include Pepsi,

Each of the companies has agreed to undertake an organisation-wide

analysis of their salary policies, to review hiring and promotion

practices, and to include equal pay efforts in other equality

Let's look at financial markets. So things have calmed a little in Asia.

, my goodness, we have come up straightaway. I would try to get

them back. -- oh, my goodness. Let's not forget Japan lost 4% on Monday

and even more ground on Tuesday with the yen remained very strong.

Although this is a slight increase on markets in Asia to date, do not

be fooled, it doesn't mean a better day ahead will start in Europe later

-- today. That things ended in the States. I'll see you soon. -- that