Japan announced 750 billion yen ($9.4 billion) of fiscal stimulus to shore up growth as bond investors told the government they’re worried about delays in financing more spending.
The euro will face further challenges as concern over budget deficits in nations such as Greece and Portugal damp its attraction as an alternative to the dollar, according to the research unit of Sumitomo Corp.
Short-term borrowing with commercial paper reached an 18-month high in Japan, after the country’s worst nuclear disaster in 25 years raised the cost of selling bonds for power producers.
Sumitomo Corp., the third-largest Japanese trading house, expects crude oil to trade between $90 per barrel and $100 next year, chief economist Soichi Okuda said.
Standard and Poor’s affirmed Japan’s sovereign-debt rating at AA- while maintaining a negative outlook and warning that a downgrade is likely if medium-term growth prospects weaken.
An improvement in Japan’s manufacturing confidence may be threatened by mounting evidence that the global economic recovery is slowing.
Reconstruction from Japan’s record earthquake and ensuing tsunami may help revive a farming and manufacturing region that was already lagging behind the rest of the economy.
"The risk of a Japanese fiscal cliff is quite big."
- Soichi Okuda on Oct 25, 2012