Prevention of the spread, etc., based on priority measures
April 2, 2021 (Friday) Cloudy
- In response to the coronavirus pandemic, companies are proceeding with restructuring their supply chains (supply networks).
In the "100 CEOs Survey," 80% of domestically headquartered companies have begun reviews.
The fragility of efficiency, such as concentrated production in specific regions and tightening inventories, has become evident during the pandemic and amid U.S.-China tensions.
- The government will apply the "Priority Measures to Prevent the Spread" to Osaka, Hyogo, and Miyagi as decided at the daily coronavirus task force meeting, aligning with a state of emergency.
The period is one month from April 5 through May 5, after the Golden Week holidays.
For large manufacturing companies, the Manufacturing PMI indicates that up to 200,000 yen per day will be capped for up to a 40% decrease in sales; small and medium-sized enterprises will be paid 40,000–100,000 yen depending on sales.
- Nissan Motor Co. [7201] [Close 590.7 yen] In EV batteries, aiming to commercialize low-cost cobalt-free products by the mid-2020s.
To reduce cost without shortening the driving range per charge.
The cathode has traditionally used about 20% cobalt. Nissan plans to reduce this to about 10% in the new EV "Ariya" to be released in 2021. In theory, the goal is achievable.
U.S. Tesla is also aiming for cobalt-free cathodes, and the current proportion used in cathodes is believed to be reduced to a few percent.
Panasonic [6752] [Close 1,409.5 yen] has already reduced to under 5% and plans to zero in the coming years.
- Prime Minister Yoshihide Suga on the evening of the 1st expressed a negative view on dissolving the Lower House and holding a general election by May 5, during the period of the "Priority Measures to Prevent the Spread."
He stated, "Basically, preventing the spread of the coronavirus takes precedence."
- Sentiment is mixed.
Bank of Japan [8301] [Close 38,500 yen] On the 1st, in the March Survey of Selected Economic Indicators (Tankan),
manufacturing sentiment improved markedly, while non-manufacturing showed a slow rebound.
Due to supply constraints such as semiconductor shortages, concerns remain about the outlook for manufacturing.
If demand for services remains weak, Japan's post-pandemic recovery could be delayed further relative to abroad.
Machinery and electrical sectors improve with overseas recovery; tourism, hospitality, and dining face burdens from reduced hours and restrictions.
- Global stock market capitalization reached a record high at the end of March, about $106 trillion (about 1.16 quadrillion yen).
Investment money flowed in on expectations from progress in COVID-19 vaccination.
Market capitalization rose about 60% over the past year.
As markets priced in a recovery, global market capitalization came to a level far exceeding GDP.
There are signs of overheating in the markets.
- The Osaka Prefecture, where the "Priority Measures to Prevent the Spread" are applied, will strengthen shortened hours in Osaka City to a level similar to the state of emergency that was lifted about a month earlier.
The aim is to curb the spread, but the number of infections is already accelerating beyond the third wave.
- Myanmar's economic stagnation has become sharply evident.
Two months have passed since the military coup; clashes between the military and protesters have escalated, with no sign of stabilization.
Remittances are restricted, and international trade is stagnating.
- U.S. President Joe Biden announced on March 31 a plan to invest $2 trillion (about 220 trillion yen) over eight years in infrastructure and research and development, signaling a shift toward a larger government role.
Japan also recorded the largest-ever budget exceeding 106 trillion yen for FY2021.
To sustainably manage government debt at an unprecedented scale amid crisis response, emphasis on targeted investments to boost growth is key.
- The Ministry of Health, Labour and Welfare, on the 1st, urged prefectures to strengthen testing systems for COVID-19.
They asked to establish the system by April, assuming infections could double from current levels.
They aim to create an efficient testing framework by combining PCR with simpler antibody tests and other methods.
- Under the Biden administration, the U.S. government is scrutinizing the highly centralized card payments industry in finance and law.
The Department of Justice is investigating Visa for possible antitrust violations related to merchants' payment processing fees.
As a response, Visa and Mastercard announced an unprecedented move to keep fees unchanged until April 2022.
- Mizuho Bank [8411] [Close 1,595.0 yen] Potential losses of about 10 billion yen from transactions linked to the U.S. investment firm Archegos Capital Management.
There is no impact on earnings forecasts at this point.
- China tends to use "confidential clauses" in lending that are favorable to China when lending to developing countries.
Amid slowing growth in the Chinese economy, foreign lending will increasingly emphasize debt collection.
China-favored loan contracts make it harder for debtor countries to restructure debts, creating a "debt trap."
- COVID-19 spreads are directly impacting employment and income of Indian citizens.
A WeWork Center estimate suggests the middle class shrank by 32 million in 2020, and the number of poor rose by twofold.
Even Modi's popular leadership has begun to waver, impacting India's consumer spending.
- The number of COVID-19 cases worldwide (daily new deaths) as of 4/1 4:00 PM, compiled by Johns Hopkins University: World total 128.913 million (12,275 deaths)
U.S. 30,460,342 (1,078) Brazil 12,748,747 (3,869) India 12,221,665 (459) France 1,705,068 (303) Russia 4,494,234 (402) United Kingdom 4,359,984 (43)
Italy 3,584,899 (467) Turkey 3,317,182 (152) Spain 3,284,353 (154) Germany 2,843,644 (200) Colombia 2,406,377 (167) Argentina 2,348,821 (122)
From here, published in [Corocha Premium]
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