Japan Report Trade Deficit and Sales of Wal-Mart Declining in USA

Another important day where strong economies like Japan reported trade deficit and oil crisis still continues to impact major businesses across the world. Summary of the major events are as follows:

JAPAN SURPRISES THE WORLD BY REPORTING A TRADE DEFICIT

Ministry of Finance data showed that weaker exports, as compared to Japan’s past records, to major markets has led to the first trade deficit in Japan in almost two years.

A stronger yen has reduced export demands with China overriding Japan to take the spot of the world’s second largest economy. The trade deficit was recorded to be 471.42 billion yen in January however with a 1.4% rise in exports; growth was expected to near 7% as per expectations of analysts.

Yoshimasa Maruyama from Itochu Corporation in Tokyo was of the opinion that despite of the exports quantity being weaker than expected, there is no denying that “the economy is emerging from a lull”. He anticipates that though slowly, exports will surely rise in the approaching months but the pace of economic growth would be slower than what was estimated earlier. 

LIBYA SITUATION PUSHES CRUDE OIL PRICES TO RECORDBREAKING LEVELS

Libyan leader Col Muammar Gaddafi’s refusal to quit combined with growing anti-government protests and unrest in the country; there have been concerns over the situation disrupting global oil supplies. This has consequentially led to skyrocketing oil prices marking their highest levels yet since October 2008.

Andy Lebow, a trader at MF Global in New York said that “The major underlying fear in the market is that these protests spread in the region to even larger producers like Saudi Arabia," The price for Brent crude has reached up to $106.23 per barrel. Analysts expressed their concerns that even a little hint of problems will send prices shooting upward.

VIETNAM STEPS UP TO FIGHT AGAINST RISING INFLATION

The State Bank of Vietnam has raised its reverse repo rate from 11% to 12% in efforts to counter inflation. Only a week earlier, the main interest rate had also been pushed up two percentage points to 11%. The country had also devalued it’s currency by 8.5% earlier this month. The State Bank is anticipating that this move will strengthen the Dong, Vietnam’s currency, and help in slowing down inflation. The rate of inflation was observed to be crossing the 12% mark in January.  

SLUMP IN PROFITS AT BARNES & NOBLE    

A decline in profits along with suspension in dividend payments has been announced by the largest bookseller in the United States. As compared to its performance in the previous year, a drop of 25% in net profits was observed for the three months ending of in January. The net profits were reported at $60.6 million. An 11% fall in shares was also observed after the results had been announced.

The bookseller continues with investing heavily in its Nook electronic book reader whereas the announcement of not making any sales or profits forecasts for the current quarter has also been made by the company.

WAL-MART ANNOUNCES DECLINE IN SALES IN THE U.S FOR THE CONSECUTIVE SEVENTH QUARTER

Wal-Mart continues to lose customers to cheaper rivals with continuing decline reported in sales for the seventh quarter in the United States. Strong profit figures were reported due to a boost in international sales and cost reduction. International sales were also benefited by exchange rate movements. However the company has lost customers to “dollar” stores in its home base, the United States. A 60% contribution was made by the US to the total sales of $419 billion by the Wal-Mart group.