World Bank growth forecast upward revision
June 9, 2021 (Wednesday) Clear Weather · Mercury Retrograde (May 30–June 23)
- The G7 leaders will meet in the United Kingdom on the 11th to 13th to agree on formulating common guidelines to prevent leakage of research data.
The discussion will be limited to fields with potential military applications, such as artificial intelligence (AI) and quantum technologies.
Create an environment where joint research can be conducted safely and freely while preventing technology leakage to China.
- Eisai <4523> [Closing price: 9,251 yen] CEO Haruo Nadate on the 8th announced that the Alzheimer’s disease treatment co-developed with Biogen has been approved by U.S. authorities.
He expressed the belief that there will be substantial sales opportunities in Asia as the patient base grows.
He said it would become a “significant blockbusters (drugs with annual sales exceeding $1 billion)” and expressed expectation for future revenue contributions.
- The government, regarding vaccination at workplaces such as companies and universities for COVID-19, received applications from 414 locations between 2 p.m. on the 8th and 5 p.m.
Vaccinations will commence on the 21st, and preparations permitting, earlier implementation is allowed.
- Worries have grown about inflation originating from China.
With a shrinking workforce, wages in the “world’s factory” may rise, pushing up prices in various countries.
The long era of low inflation may be reaching a turning point.
- On the 7th, Apple announced that in the next iPhone OS, users will be able to limit the personal data that apps can access.
This aims to curb the excessive use of personal data in the online advertising industry.
This could transform the data-related industries, with data trading estimated to be around 25 trillion yen annually.
- The world’s first treatment that slows the progression of Alzheimer’s disease, affecting an estimated 30 million people globally, will become available in the United States.
The U.S. FDA approved the new drug “Aducanumab” from Biogen and Eisai <4523> [Closing price: 9,251 yen].
The FDA granted conditional approval given rising demand.
In Japan, concerns about the large patient numbers and high price may strain national medical costs, making approval a focal point.
Biogen announced on the 7th that annual treatment costs would be about $56,000 (about 6.1 million yen).
- The impact of COVID-19 on the economy is likely to endure.
When asking private economists for the forecast for real GDP growth in Q2, the consensus is 0.0% quarter-on-quarter, annualized 0.2%, essentially flat.
The pullback from the negative growth in Q1–Q3 is weak.
As the U.S. is expected to grow at nearly 10% annually, the gap in recovery between the U.S. and Japan is pronounced.
- Cabinet Office on the 8th: The Economic Watchers Survey (short-term business condition) current DI, which asks about the direction of the economy, fell 1.0 points from the previous month to 38.1.
Two months of deterioration, overlapping with the period of extended states of emergency.
Notable declines in the restaurant and service sectors.
- Tokyo Shoko Research on the 8th: May corporate bankruptcies nationwide rose 50% year on year to 472 cases.
This is the highest since June 2020, the 11th consecutive month of increase, with COVID-19 related bankruptcies mainly in the dining and related sectors.
Total liabilities rose 2.1 times to 168.664 billion yen.
- The government aims to install solar panels on half of national and local government buildings and land by 2030.
Aiming for 100% by 2060.
To achieve a 46% reduction in greenhouse gas emissions by fiscal 2030 compared with fiscal 2011, rapid deployment of large-scale solar panels is essential, with the public sector leading by example.
- The World Bank on the 8th revised up its global growth forecast for 2021 to 5.6%, up 1.5 percentage points from the January projection.
It called it “the highest growth rate after a global recession in 80 years.”
- Wage recovery is lacking strength.
The Ministry of Health, Labour and Welfare on the 8th reported that average cash wages per person in April rose 1.6% year on year, with a large rebound from the previous year when corporate activity was restrained by the COVID-19 outbreak.
Among economists, it is believed that a solid recovery will take about another year.
What boosted total wages was the rebound in overtime hours.
- The number of people who have received at least one dose of the COVID-19 vaccine in Japan surpassed 13.7 million by the 7th, reaching about 10% of the country’s induced pluripotent stem (iPS) cells.
Vaccination doses continue at about 600,000 per day, gradually approaching the government’s target of 1 million per day.
- The COVID-19 crisis has increased reliance on government-backed loans.
The Credit Guarantee Association reported guarantees for loans swelled to 35 trillion yen in fiscal 2020, well above the level seen during the 2008 Lehman shock.
Repayments will start to come due gradually. Financial institutions will need to respond with private lending, and some demand debt relief, posing a heavy challenge.
- SoftBank Group (SBG) <9984> [Closing price: 8,019 yen] The SoftBank Vision Fund’s investments are mired in deeper confusion over the British financial firm Greenhill Capital, which went bankrupt on March 6.
On the 6th, another investee, Catera, a U.S. construction company that had dealings with Greenhill, also collapsed.
Conflicts of interest issues have arisen as overlaps between fund investees and Greenhill’s investments accumulate, and some criticize the neglect of such conflicts of interest.
- Foreign and domestic funds have been flowing into China’s sovereign debt market.
As of the end of May, foreigners held about 2.1 trillion yuan (about 36 trillion yen) in Chinese government bonds, up 46% year on year, marking a new high for two consecutive months.
Their share exceeds 10%, doubling in three years.
- Global hedge funds are performing well.
The HFRI Composite Index, tracking major hedge funds, rose 9.92% from January to May, the highest in 25 years since 1996.
- El Salvador President Nayib Bukele signaled that Bitcoin could become legal tender as a government-sanctioned currency.
If realized, it would be the world’s first. However, as a cryptocurrency, it is highly convenient but price-volatile, and there is a concern that government or central bank control may not reach it.
- India’s Ministry of Health and Family Welfare on the 8th reported new COVID-19 cases at about 86,000 per day.
New cases in India have not fallen below 100,000 for about two months.
- Global COVID-19 infections (death tolls compared to the previous day) as of 4 p.m. June 8, according to Johns Hopkins University: world total 173.63 million (7,996 deaths)
United States 33,378,143 (324) India 28,996,473 (2,123) Brazil 16,894,218 (1,010) France 5,775,535 (64) Turkey 5,293,627 (91) Russia 5,076,543 (326)
United Kingdom 4,538,399 (1) Italy 4,233,698 (65) Argentina 3,977,634 (732) Germany 3,710,342 (141) Spain 3,707,523 (40) Colombia 3,593,016 (535)
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