International Energy Agency (IEA) Roadmap Published
May 19, 2021 (Wednesday) Cloudy with rain
- Preliminary GDP figures for Q1 2021 for major countries and regions are now available.
While China and the United States showed accelerating recovery, the lag in Japan and Europe became more evident.
These reflect the effectiveness of COVID-19 countermeasures, and in Q2–Q3, GDP in both China and the United States is expected to exceed pre-pandemic levels.
- Cabinet Office on the 18th: Japan’s real GDP for Q1 2021 contracted for the first time in three quarters, annualized at a 5.1% decrease from the previous quarter.
Personal consumption fell 1.4%, and equipment investment also fell 1.4%, marking a decline for two consecutive quarters.
The United States grew at an annualized rate of 6.4% from the previous quarter, with personal consumption up 10.7%.
China rose 0.6% quarter-on-quarter, with annualized growth of 2.4% according to the Cabinet Office. Four consecutive quarters of growth.
The euro area declined at an annualized rate of 2.5% from the previous quarter, marking two consecutive quarters of negative growth. The drop was smaller than in Japan.
- The government’s growth strategy skeleton to be finalized in June states a policy of focused investment to expand domestic production of cutting-edge semiconductors and batteries.
Under the banner of “ensuring economic security,” the budget for supporting the development of manufacturing technologies will be increased, and new plant construction by companies will be encouraged.
Attract leading U.S. manufacturers and, in a Japan-U.S. alliance, aim to strengthen supply chains.
- The Ministry of Internal Affairs and Communications plans to directly assign phone numbers to low-cost smartphone operators.
Currently, they borrow numbers and lines from major carriers, making independent pricing and service provision difficult.
Holding their own numbers will allow easier plan customization without being constrained by large carriers’ line usage fees.
Diversifying services will further spur competition among providers, leading to price declines and other benefits.
- The International Energy Agency (IEA) on the 18th published a roadmap to achieve net-zero greenhouse gas emissions globally by 2050.
Immediate halting of new investment in fossil fuels and the cessation of new gasoline car sales by 2035.
2021: Stop new fossil-fuel investment
2030: 60% of new car sales to be electric or plug-in hybrid
2035: Stop new sales of internal-combustion engine vehicles
2040: Phase out coal and oil-fired power generation worldwide
2050: Renewable energy to account for about 70% of energy supply
(Nikkei, first page)
- Amazon.com in the United States is reported by multiple media outlets to be negotiating to acquire Metro-Goldwyn-Mayer (MGM), the U.S. film studio.
MGM is behind the James Bond series and others. The purchase price could be as high as $9 billion (about 980 billion yen).
- Japan’s economy is expected to remain weak in Q2 2021 due to delays in COVID-19 vaccination efforts, according to forecasts.
Compared with the world, the April PMI shows that economies with higher vaccination rates tend to improve more visibly.
The government says it aims to complete vaccination for the elderly by the end of July, but delays could widen the gap in economic activity between Japan, the U.S./Europe, and China.
- Vaccination of healthcare workers against COVID-19 is lagging.
Vaccination started in February, but as of the 14th the completion rate after two doses is 35%, with Tokyo and Kanagawa at 28%, showing a tendency toward lower rates in urban areas.
- Under the Biden administration, there is a push to strengthen ties with allied countries as it focuses on trade issues with China.
The EU and the United States reached a tentative truce in a tariff war over steel and aluminum.
Although a cooperation path with the EU is temporarily in place against China, negotiations are expected to be difficult.
Whether both sides can reach a lasting peace by lowering tariffs remains uncertain.
- The Ministry of Land, Infrastructure, Transport and Tourism will bolster port bases to promote offshore wind power.
The four ports of Akita, Noshiro, Kashima, and Kitakyushu are designated for assembling and maintaining power generation equipment, with plans to consider adding more base ports.
- Chinese authorities plan to allow mutual investment in financial products between Hong Kong and mainland China through the Wealth Management Connect within the year.
The retreat of “one country, two systems” is shaking Hong Kong’s status as a financial hub; opening up is intended to keep foreign financial institutions engaged.
- The Investment Trust Association on the 18th reported that in April, net inflows into open-ended investment trusts were 510.6 billion yen, after deductions for redemptions from the net asset value of settings.
Net inflows have continued for 48 months, but the inflow was below 1 trillion yen for the first time in four months.
In April, stock prices entered a consolidation phase, and individual investors redeemed investment trusts to buy into the dip in cash stocks.
The Money Reserve Fund (MRF), a reservoir for retail investors’ idle cash, saw outflows of 275.1 billion yen.
The magnitude of outflows was the largest in over a year.
- Nomura Holdings, Inc. <8604> [Close 589.1 yen] on the 18th,
liquidated all positions suspected to be from transactions with the U.S. investment firm Archegos Capital Management.
A loss of $600 million (roughly 65 billion yen) was booked for the April–June 2021 quarter. On April 27, it reported an expected loss of $57 million for the current quarter, which was slightly higher than forecast.
- There is upward pressure on crude oil futures. While demand is recovering from the COVID-19 slump, shale oil production in the United States, the largest oil-producing country, remains weak.
If shale production remains sluggish, crude prices could rise further, intensifying inflationary pressure.
- Taiwan-based companies are beginning to see a slowdown in performance.
A pronounced shortage of semiconductors and other components, evident in the auto sector, is also affecting the IT industry, causing production to stall; 80% of major companies reported April sales below March levels.
- The National Bureau of Statistics of China on the 17th announced revisions to the 2020 census data based on a sample survey conducted in 2011–2019.
The number of births is estimated to increase by about 1 million per year on average.
A large upward revision could undermine the reliability of statistics.
- The Biden administration is pursuing a system akin to a basic income that guarantees a minimum income to all households.
Using an expanded child tax credit decided for 2021, monthly payments will begin in July to eligible households.
The aim is to establish the program and sway opposition parties to extend it beyond 2022.
“Approximately 39 million households, 88% of all U.S. children would be eligible.” Up to $3,000 per child per year for ages 6–17, and up to $3,600 for children under 6.
- The number of new COVID-19 infections (deaths) worldwide as of May 18, 4:00 PM, compiled by Johns Hopkins University: 1.0364 billion confirmed cases (10815 deaths)
United States 32,994,441 (389) India 25,228,996 (4,329) Brazil 15,667,391 (786) France 5,942,370 (196) Turkey 5,127,548 (223) Russia 4,829,938 (336)
United Kingdom 4,468,582 (5) Italy 4,162,576 (140) Spain 3,615,860 (93) Germany 3,608,320 (220) Argentina 3,335,965 (505) Colombia 3,131,410 (509)
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