Japan raises growth forecast as yen slides

Updated 29 January 2013
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Japan raises growth forecast as yen slides

TOKYO: Anticipating a boost from stimulus spending and a weakening yen, Japan’s government yesterday raised its growth forecast, predicting the economy will emerge from recession and expand 2.5 percent in the coming fiscal year.
The yen has dropped more than 10 percent in recent months, reaching its lowest level since July 2010. Share prices have surged in anticipation that higher stimulus spending will boost economic activity, and that the weaker yen will aid exporters.
The Cabinet office’s earlier estimate for growth in the fiscal year that starts April was 1.7 percent. It expects inflation-adjusted growth of 1.0 percent in the current fiscal year.
The consumer price index is forecast to rise 0.5 percent, less than the inflation target of 2 percent announced by the central bank and the government last week after lobbying by Prime Minister Shinzo Abe.
Abe took office a month ago and has made his top priorities reviving the economy and ending a prolonged spell of deflation — falling prices that can dampen investment and growth.
The revised forecasts assume the yen will average 87.8 yen per US dollar in fiscal 2013, compared with 81.9 yen per dollar for this fiscal year.
The benchmark Nikkei 225 stock index topped 11,000 for the first time since April 2010 early yesterday before falling back to close 0.9 percent lower at 10,824.30.
The yen was trading at 90.68 to the dollar late Monday, after briefly hitting 91.06.


Hyundai teams up with VW’s Audi to boost hydrogen cars

Updated 5 min 17 sec ago
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Hyundai teams up with VW’s Audi to boost hydrogen cars

LONDON: Hyundai agreed a deal with Audi on Wednesday to collaborate on hydrogen car technology, hoping to boost an energy segment that has lagged behind battery electric vehicles.
The South Korean firm wants to increase the uptake of hydrogen cars, which are propelled by electricity generated by fuel cells but have been held back by a lack of infrastructure and the push for battery electric vehicles by the likes of Tesla.
The pair will be able to access each other’s intellectual property and share components, including any new parts developed by Audi, which is responsible for hydrogen fuel cell technology in the Volkswagen Group, the world’s biggest car seller.
Hyundai hopes that the move will create greater demand for vehicles such as its ix35 model and bring down costs to make the technology profitable.
“We want to provide to our component suppliers more chance and we want to have competition between component suppliers,” Sae Hoon Kim, the head of Hyundai’s R&D fuel cell group, told Reuters in an interview in London.
“We also want to make them to have competition with other suppliers, and that competition will bring down the cost.”
Carmakers such as Toyota have touted the benefits of hydrogen vehicles, which take less time to refuel than the recharge times of battery electric cars, but are expensive and suffer from a lack of refueling stations.
Many carmakers are focusing on battery electric vehicles, which can take between half an hour and half a day to recharge, but are increasingly able to use a growing network of charging points.
Auto firms are teaming up to share the cost of developing greener technologies to replace combustion engines as regulators around the world crack down on emissions. GM and Honda have a partnership to jointly develop electric vehicles with hydrogen fuel cells that are expected to go on sale in 2020, while BMW is working with Toyota.
Kim said that a toughening of European Union carbon emission limits in 2025 would create a need for more hydrogen cars.
Hyundai sold 200 such models last year and expects to sell thousands this year, but Kim said profitability was still far off.
“100,000 or 300,000 vehicles per year per company, when that comes, I think we can make money,” he said.