A U.S. company has gone to the moon – and creates a little piece of history
Intuitive Machines’ Nova-C cargo lander, named ‘Odysseus’ after the mythological Greek hero, is the first U.S. spacecraft to soft land on the lunar surface since 1972.
Japan, India and China have all had recent successful moon mission ahead of the U.S.
Intuitive Machines is the first company to pull off a moon landing – government agencies have carried out all previously successful missions.
The company’s stock surged in extended trading Thursday, after falling 11% in regular trading.
Lander visual
Hunt for water
The targeted landing site was a cratered terrain next to a 5km-high mountain complex known as Malapert. It’s the southernmost point on the Moon ever visited by a spacecraft.
It’s on the shortlist of locations where Nasa is considering sending astronauts later this decade as part of its Artemis programme.
It is reported that there are some deep craters in this region that never see any sunlight – they’re permanently in shadow – and scientists believe frozen water could be inside them.
Art illustration on Intuitive Machines luna lander
Art illustration on Intuitive Machines luna lander
Japan’s Nikkei 225 hit a record high of: 39098 on Thursday 22nd February 2024.
The rally was propelled by electronics, banking and consumer stocks as robust earnings and investor-friendly measures fuel a blistering rally in Japanese equities.
The Nikkei 225 jumped 2%, surpassing the previous record high of 38,915.87 reached in 1989.
Standout performance
Both the Nikkei and the broader Topix have been standout performers in Asia up more than 10% so far in 2024 after surging more than 25% in 2023. Their best annual gains in at least a decade.
Japan Inc’s solid third-quarter corporate earnings have prompted Bank of America analysts to upgrade their 2024 year-end forecasts for the Nikkei 225 to 41000 from 38500. They raised their forecasts for the Topix to 2,850 from 2,715.
The rally has also been supported by a weaker yen.
It’s true. 2012 statistics show that citizens of Japan registered 21 million or so pets against 16.5 million children (under 15 years).
This is a problem for Japan as it has a growing elderly population. It means Japan has one older person for every three citizens. 33% of the population is elderly and not part of its workforce.
If this trend continues Japan is on course to lose around 40% of its workforce and that is a massive problem for Japan’s economy.
According to a survey conducted by Rakuten Insight in 2023, dogs were the most popular pets in Japan, followed by cats and fish.
The most popular dog breeds in Japan were toy poodle, chihuahua, and Shiba Inu. Many Japanese people love their pets and treat them as part of their family.
More Japanese people have a pet than they do children?
Japan’s economy slipped into a technical recession, after the economy unexpectedly contracted again in the October-December 2023period, government data showed Thursday 15th February 2024.
High inflation affected domestic demand and private consumption in what’s now the world’s fourth-largest economy.
Provisional gross domestic product contracted 0.4% in the fourth quarter compared with a year ago, after a revised 3.3% slump in the July-September period. This was below the estimate of a 1.4% growth.
The Japanese economy also contracted 0.1% in the fourth quarter from the previous quarter, after shrinking a revised 0.8% in the Q3. This was also weaker than the expected 0.3% expansion.
Nikkei one year chart to 15th February 2024
Nikkei one year chart to 15th February 2024
Japan has lost its spot as the world’s third-largest economy to Germany, as the country unexpectedly slipped into recession.
Technical recession
A technical recession is a term used to describe two consecutive quarters of decline in output. It is measured by the Gross Domestic Product (GDP), which is the overall output of goods and services in a country.
A technical recession is usually caused by slowing growth or an isolated event rather than a major underlying cause.
After a decade-long bull run throughout the 1980’s, the Nikkei 225 index reached an all-time high of 38,915 on December 29, 1989, the last trading day of the year.
Few could have imagined, on New Year’s Eve of 1989, that the index would be lower 34 years later. As the New Year arrived, the bubble burst.
And now, Japan’s stock markets are on a tear and closing in on that elusive 38195 high of 1989 – but there’s a catch – the Zombies are coming.
Zombie companies
Zombie firms are businesses that are unprofitable and struggling to keep afloat. They don’t have excess capital to invest and grow the business, or to pay down the loan capital.
Concerns about zombie firms are coming into focus as the Bank of Japan is tipped to raise interest rates in 2024 for the first time since 2007.
It comes as the Nikkei 225 rises to its highest point in almost 34 years
Japan’s stock markets have been on a meteoric run since the start of 2023, repeatedly breaching 33-year highs and outperforming the rest of Asia.
However, there are rising concerns that so called ‘zombie’ firms, which are unprofitable and struggling to keep afloat, could cut short that rally. The Bank of Japan is widely expected to raise interest rates this year, and that could easily tip many of these firms into bankruptcy, which could have a broader impact on the economy and stock market,
Nikkei 225 1-year chart 9th February 2024
Nikkei 225 1-year chart 9th February 2024
Bankrupt businesses
Zombie firms are nothing new in Japan. They first emerged after the stock ‘bubble’ and subsequent crash of the 1990s, when banks continued to support companies that would have otherwise gone bankrupt.
The pandemic of 2020 accelerated the problem of zombie businesses, with the number of zombie firms in Japan reportedly jumping by around 33% between 2021 and 2022.
At the end of 2023, Japan reportedly had around 250,000 companies that are technically zombie businesses
Some experts argue that zombie firms are a drag on Japan’s productivity, innovation, and growth, as they occupy resources and crowd out more efficient firms. The debate on how to deal with zombie firms is ongoing and may have implications for Japan’s economic recovery and future prospects.
Others suggest that zombie firms may have a positive effect, such as preserving employment, social stability, and industrial diversity.
Surely, there is no room for inefficiently run businesses making little or no profit in any economy.
China, which consumes over half of the global coal demand and produces over 4 billion tonnes of coal per year.
India, which consumes about 14% of the global coal demand and produces over 900 million tonnes of coal per year.
The United States, which consumes about 9% of the global coal demand and produces over 600 million tonnes of coal per year.
Japan, which consumes about 3% of the global coal demand but imports most of its coal.
These countries accounted for about 82% of the global coal production in 2021 according to 2021 data set. China alone produced more than half of the world’s coal, followed by India with nearly 10%.
Global coal use in 2023 hits few high
Global coal use in 2023 has hit a record high, surpassing 8.5 billion tons for the first time, on the back of strong demand in countries like India and China, said IEA. These countries are the world’s largest consumers of the dirtiest fossil fuel, and continued modernization puts their energy consumption on a rapid growth trajectory.
China
China and India’s growing economies will continue to fuel demand for coal even as they set ambitious renewable energy targets, according to experts.
While China is the world’s largest energy consumer, India is ranked third globally, and both countries are the top consumers of coal as they strive to fuel economic growth.
Global coal usage in 2023hit a record high, surpassing 8.5 billion tons for the first time, on the back of strong demand in emerging and developing countries such as India and China, IEA noted in a recent report.
China’s electricity sector has been in the throes of a clean revolution over the past few years, with an almost five-fold growth in wind and solar generation since 2015. As a result, the share of coal generation has fallen by 17 percentage points, from 78% in 2000 to 61% in 2022.
China has suffered from drought in recent years, which reduced hydroelectric power generation in its southern provinces. To maintain the necessary power output, the country had to turn to coal.
United States
By contrast, U.S., which is the world’s second largest consumer of coal, has seen a decrease in its usage of the fuel. According to the Institute for Energy Economics and Financial Analysis, the amount of coal that the superpower consumes each day recorded a 62% drop from 2.8 million to 1.1 million tons a day.
75% of India’s power is derived via coal-fired plants. Coal accounts for 61% of China’s power generation, even though the country is recognized as the indisputable leader in renewable energy expansion. It has been adding new projects to the grid almost as fast as the rest of the world combined in 2022 and has ambitions of becoming carbon neutral by 2060.
Annual average capacity additions by country and region, 2016-2023
India’s coal production rose to 893 million tons during the financial year ending March 2023, jumping nearly 15% from a year earlier. China’s raw coal production in 2023 went up by 2.9% compared with the same period in 2022.
There are no signs of a slowdown, with the IEA saying coal consumption in India and Southeast Asia is projected to grow significantly.
Coal won’t go!
But the lack of reliability of renewables means coal has still very much been a critical fallback option for the two countries.
Top five coal producing countries in the world
China: 4,126.0 million tonnes
India: 762.0 million tonnes
Indonesia: 614.0 million tonnes
United States: 523.8 million tonnes
Australia: 467.1 million tonnes
Five of the Greenest energy producers in the world
Sweden
Norway
Denmark
Finland
Switzerland
The greenest were based on these five criteria: carbon emissions, energy transition, green society, clean innovation, and climate policy.
Top countries by renewable energy production
China: 2,271.9 TWh (28.2% of total electricity)
United States: 804.8 TWh (20.5% of total electricity)
Brazil: 491.9 TWh (83.3% of total electricity)
Canada: 433.6 TWh (66.9% of total electricity)
India: 303.5 TWh (24.5% of total electricity)
Note: three of the world’s worst offenders of fossil fuel use are also in the top five for energy production by renewables – China, U.S. and India.
Japan’s Nikkei 225 index set a new record in nearly 34 years last week, breaking the 35000 barrier for the first time since February 1990. Its all-time high of 38915 was hit in December 1989? That’s a 35 year old record!
Some analysts think that the long-term prospects for the Japanese markets look good.
The Nikkei 225 index is a benchmark of the Japanese stock market. It is composed of 225 large companies listed on the Tokyo Stock Exchange. The index has been fluctuating between 20000 and 30000 points for most of the past decade. It recovered from the lows of the global financial crisis in 2008 and 2009.
According to some market strategists, the Nikkei 225 index could reach 40000 points in the next 12 months. Fundamentals are ‘pointing in the right direction’ and investor interest in Japan is increasing.
This would breach the Nikkei’s all-time high of 38915 reached in December 1989. However, others suggest the rally will struggle somewhere between 36000 and the all-time high. This suggest that much of the good news is already priced in.
I think I could probably have guessed that too. The Nikkei hasn’t reached the original high of 1989 for 35 years!
This was the famous UK advertising slogan of a once famous and proud Japanese business that later fell from grace. It became a 1980’s advertising hit for Toshiba in the UK.
There was a time when more than one of your TV’s, computers, laptop’s, Hi-Fi’s, speaker systems or other essential electronic goods would have been made by Toshiba.
Once an untouchable powerful conglomerate for Japan’s dominance in electronics – known as Japan Inc – the company for forced to delist, ending a 74-year history with Tokyo’s stock exchange.
So why did one of Japan’s most famous industrial names have such a spectacular fall from grace?
It all started in 2015 when accounting malpractices came to light, with many of them involving top management. For seven years, Toshiba had overstated its profits.
In 2020, Toshiba found further accounting irregularities
There were also allegations related to corporate governance. An investigation launched in 2021 found that Toshiba had colluded with Japan’s trade ministry – which saw Toshiba as a strategic asset – to suppress the interests of foreign investors.
At the time, analysts said this made foreign investors uncertain about investing in Japanese stocks, making it not just a Toshiba problem, but an issue for Japan’s entire stock market.
In late 2016, Toshiba said it would take charge of several billion dollars related to the construction of a nuclear power plant that U.S. unit Westinghouse Electric had bought a year earlier. Just months later, Westinghouse filed for bankruptcy leaving Toshiba facing a collapse of its nuclear business and more than $6bn in liabilities.
Sell-off
Toshiba sold off businesses including medical systems, mobile phones, and white goods try to thwart these difficulties. But it was later forced to place its flag ship chip unit, Toshiba Memory, up for sale – a deal that was delayed for a number of months over a dispute with one of its partners.
At a time when companies were investing heavily in the future of technology and innovation, Toshiba was having to sell off a prized asset to raise cash – a resentful place to be.
Cash injection
Toshiba managed to secure a $5.4bn cash injection at the end of 2017 from overseas investors, helping it avoid a forced delisting. But that meant shareholders had more of a say in the about the company.
That lead to protracted battles that paralysed the maker of batteries, chips and nuclear and defence equipment. After a great deal of debate over whether the company should split up into smaller companies, Toshiba set up a committee to explore whether it should be taken private.
In June 2022, Toshiba received eight buyout offers
Earlier in 2023, the company announced it would be taken over by a group of Japanese investors led by state-backed Japan Investment Corp (JIC) for $14bn. It’s not clear yet what the new owners plan for Toshiba – maybe AI products will come to the rescue?
Japan Investment Corp
JIP does reportedly have a positive track record in making businesses from big manufacturers including Sony’s laptop division and Olympus’s camera unit. After acquiring Sony’s Vaio laptop business in 2014, it helped the company achieve record sales last year.
But Toshiba is a much bigger company, it employs around 106,000 people and some of its operations are seen as critical to national security.
It has now de-listed and hopefully will find a way to re-gain back to its former glory.
The original extremely memorable and successful Toshiba advertising campaign from the 1980’s
The original extremely memorable and successful Toshiba advertising campaign from the 1980’s
Japan launched a rocket on 7th September 2023 carrying an X-ray telescope that will explore the origins of the universe and a small lunar lander.
The launch of the HII-A rocket from Tanegashima Space Centre in southwestern Japan was shown live by the Japan Aerospace Exploration Agency (JAXA).
Thirteen minutes after the launch, the rocket put into orbit around Earth a satellite called the X-Ray Imaging and Spectroscopy Mission, or XRISM, which will measure the speed and makeup of what lies between galaxies.
That information helps in studying how celestial objects were formed, and hopefully can lead to solving the mystery of how the universe was created, JAXA reports.
In cooperation with NASA, JAXA will look at the strength of light at different wavelengths, the temperature of things in space and their shapes and brightness.
Smart
Also aboard the Japanese rocket is the Smart Lander for Investigating Moon, or SLIM, a lightweight lunar lander. The Smart Lander reportedly won’t make lunar orbit for three or four months after the launch and would likely attempt a landing early 2024, according to the space agency.
Japan launched a rocket on 6th September 2023 carrying an X-ray telescope that will explore the origins of the universe and a small lunar lander.
Going to the moon has fascinated humankind for decades. Under the U.S. Apollo program, astronauts Neil Armstrong and Buzz Aldrin walked on the moon in 1969.
Only four nations have successfully landed on the moon, the U.S., Russia, China and India.
Japan has started releasing treated radioactive water from the Fukushima nuclear plant into the Pacific Ocean on Thursday 25th August 2023.
This is a controversial decision that has been opposed by China, South Korea, and some Pacific island nations. They fear that the water release will harm the marine environment and human health, and affect seafood exports.
Safe?
Japan says that the water release is safe and necessary for the decommissioning of the plant, which was damaged by a massive earthquake and tsunami in 2011. The water has been treated to remove most of the radioactive substances, except for tritium and carbon-14, which are considered to have low risks. The water will also be diluted to meet the international standards for drinking water before being discharged.
IAEA
The International Atomic Energy Agency (IAEA) has endorsed Japan’s plan and said that the water release will have a negligible impact on people and the environment. The IAEA will also monitor the water release and verify Japan’s compliance with the safety standards.
30 years
The water release is expected to take about 30 years to complete, and will involve pumping out about 1.34 million tonnes of water from more than 1,000 tanks at the Fukushima site.
Japan Fukushima nuclear plant controversial release of potentially contaminated water
Asia is promoting clear crypto rules at a time when large businesses are facing regulatory uncertainty in the U.S.
Some Asian countries that have taken the lead in crypto regulation include Singapore, Hong Kong, Japan, and South Korea. They have proposed or implemented frameworks that protect investors, prevent money laundering, and encourage innovation in the crypto industry.
Lack of clarity in U.S.
In contrast, the U.S. has been singled out for its lack of clarity and consistency in crypto regulation. The SEC for instance and other agencies have different views on how to classify and regulate crypto assets – take alook at the case with XRP and ripple of recent years.
Some industry leaders have threatened to leave the U.S. or sued the regulators over their actions. There is also a debate in Congress that could level crypto transactions with a tax.
Attractive
As a result, some analysts have suggested that Asia could become more attractive to investors and innovators in the crypto industry, as it offers more certainty and stability in the regulatory environment.
However, there are also challenges and risks involved in crypto regulation, such as balancing security and innovation, ensuring compliance and enforcement, and dealing with cross-border issue.
Japan’s economy beats expectations with 6% annualised growth in Q2
Japan’s economy posted its third straight quarterly expansion, latest government data showed 15th August 2023, as robust export growth contributed to an annualised 6% expansion in the second quarter, easily beating market expectations.
Economists had reportedly expected the world’s third-largest economy to produce a 3.1% growth in the April-June quarter. The GDP data translated to a more modest quarterly expansion of 1.5%, topping expectations for 0.8% growth.
The strong performance was mainly driven by a surge in exports, especially in the auto sector, as global demand recovered from the impact of the COVID-19 pandemic. Japan also benefited from an increase in inbound tourism, as travel restrictions eased and the Tokyo Olympics boosted visitor arrivals.
Outlook
However, the outlook for the Japanese economy remains uncertain, as the country faces a resurgence of COVID-19 cases and a sluggish consumer recovery. The government has extended a state of emergency in several regions, including Tokyo and Osaka, until the end of August, which could dampen domestic spending and business activity.
Quarterly expansion came in at a more modest 1.5%, versus expectations for 0.8% growth.
Optimism was tempered by muted domestic demand, given a surprise drop in private consumption expenditure despite the first employee compensation sequential increase in seven quarters.
Historically low interest rates
The Bank of Japan has maintained its ultra-easy monetary policy stance, keeping its key interest rate at -0.1% and pledging to support the economy with massive asset purchases.
The central bank has also introduced a new lending scheme to encourage green and digital investment for the future.
