Business News & Financial News

The Japanese consumer prices fell in July for the 17th consecutive month on an annual basis, a sign that deflation remains entrenched in the archipelago and Nippon will be difficult to fight for the government.

Tokyo seeks the method that will curb the rising yen, which this week hit a high of 15 years against the dollar and a high of nine against the euro, threatening to bring down a recovery that based on exports.

But the strong yen is likely to complicate efforts by the Japanese government to fight deflation.

Japanese Prime Minister, Naoto Kan, said Friday that reporters would act when necessary on the issue of the strong yen and he would meet the Governor of the Bank of Japan Masaaki Shirakawa on his return from a trip to the abroad.

Naoto Kan also said that excessive currency fluctuations could threaten financial stability and hoped that the BoJ would take the appropriate measures in terms of monetary policy.

Decisions will be made August 31 on these issues.

The Interior Ministry announced Friday that consumer prices, which include fuel costs but not those of fresh products, fell 1.1% yoy in July according to the median forecast of the market. In June, they were down 1%.

"TWO OR THREE YEARS OF DEFLATION"

"Given the appreciation of the yen, exports will plunge and temporarily slow the economic recovery in Japan.Japan will remain in deflation for the next two or three years, "said Takeshi Minami, chief economist at Norinchukin Research Institue.

Investors are betting on an intervention by the Bank of Japan to ease monetary policy in the country.

"The BoJ could expand its refinancing tools next month, but the effect on interest rates in the short term will be limited.She needs to take bolder decisions to fight deflation and the rising yen, as increasing outright purchases of government bonds, although it is very unlikely to happen, "said Takeshi Minami.

Two other indicators released Friday offers a contrasting vision of the Japanese recovery.

The unemployment rate adjusted for seasonal variations fell 5.2% in July against 5.3% in June while the median forecast was 5.3%, according to figures from the Ministry of Internal Affairs.

Household spending has in turn increased by 1.1% in July over a year in real terms, less than the market forecast of an increase of 1.3%.

For a chart comparing the evolution of consumer prices in Japan, the United States and the euro area, click on link.reuters.com/pum57n

Royal Bank of Scotland (RBS) has agreed to sell nearly 2.4 billion euros of its majority stake in its subsidiary WorldPay payment systems to two private equity funds, the latest step in its restructuring plan .

After Friday increased its quarterly results, RBS said it would sell 80% of its business Global Merchant Services, which oversees WorldPay to Advent International and Bain Capital in a transaction valuing the company up to 2.03 billion pounds (2.4 billion euros).

Advent and Bain were in exclusive talks for this operation since late July, had said last month a source close to the matter.Analysts had estimated the amount of the transaction between two and 2.5 billion pounds.

The two companies capital that they are looking to develop activities WorldPay and added that they could conclude other acquisitions.

RBS will however keep a stake of about 20% in WorldPay.The added value generated by this transaction would be approximately 850 million pounds and increase the solvency ratio "core Tier 1" bank by about 30 basis points, the bank said.

"A NEW IMPORTANT STEP"

RBS will receive an initial cash payment of £ 1.7 billion once the deal is finalized and could obtain additional 200 million depending on performance WorldPay.

"The sale of Global Merchant Services is a new milestone in the restructuring program the company," said chief financial officer, Bruce Van Saun, in a statement.

Around 4:45 p.m. GMT, RBS yielded 0.38%, to 51.8 pence in London Stock Exchange, outperforming the Stoxx 600 index, however, brings together the main European banking stocks, which retreated at the same time by 0.74%.

This occurs after the Wednesday of the sale of 318 branches RBS UK counterpart Santander for about 1.65 billion pounds.

Before announcing the sale of WorldPay, the bank reported Friday in an increased profit in the second quarter due to recovery of its loan portfolio and improved its net interest margin, while bad debts Ireland remain problematic.

Several European banks such as HSBC, BNP Paribas and Barclays, have reported strong results this week in favor of a reduction in expenses related to bad debts, but some investors are questioning their prospects.

"THE PERFORMANCE IS A LITTLE LIGHT GBM"

RBS, for its part reported an operating profit of 869 million pounds for the quarter ended June 30, after a profit of 713 million in the first quarter.

The retail banking and commercial banking at RBS have seen their net banking income increased during the quarter but the division of investment bank GBM has had difficult times with a 31% drop in GDP over the first quarter.

"The performance of the GBM is a bit light, but the plus side, the British retail banking seems to be doing well," said Joseph Dickerson, an analyst at London brokerage firm Execution.

RBS said it had seen no return of the investment bank in July, which is fueling fears that the sector does not meet the expectations throughout the year if the soft trend in May and June is confirmed.

"July is generally consistent with the trend of the previous two months," said Stephen Hester. "If customers, uncertain, remain on the sidelines, there is less money in the investment bank."

Impairment losses accounted for 2.49 billion pounds in the second quarter, against 2.68 billion in the first.Excluding the gain on the recovery of its own debt, the bank posted a net income of 250 million pounds, down from the first three months of the year.

DuPont publishes a quarterly profit nearly tripled thanks to a double digit growth in sales in its five main business segments.

The number three of the chemistry in the United States has achieved during April-June net profit of 1.17 billion (900 million euros), or $ 1.26 per share, against 417 million (41 cents / share) on the corresponding period last year.

Excluding items, earnings were $ 1.17 per share.

Financial analysts had expected earnings of 93 cents per share according to Thomson Reuters I / B / E / S.It was not clear immediately that this consensus is comparable to published results.

The quarterly revenue rose 25.6% to $ 8.62 billion against 8.27 billion expected by the market.

DuPont revised upwards its forecast range for the full year, saying it now expects earnings per share (EPS) of 2.90 to 3.05 dollars excluding special items, against 2.50 to 2.70 far.

The market consensus gives an annual EPS of 2.64 dollars.

The action DuPont, one of the 30 stocks in the Dow Jones gained 2.1% in pre-market transactions, to 39.80 dollars.

The U.S. stock markets opened on a negative note Friday as investors show some nervousness before the publication of the results of resistance testing taxed at 91 European banks.

A few minutes after the start of trading, the Dow Jones yielded 0.28% to 10,293.16 points, the Standard & Poor's 500 index 0.44% to 1088.89 points and the Nasdaq Composite 0.51% to 2234.45 points.

Losses are limited by satisfactory business results and publication of European statistics reassuring, especially in Great Britain and Germany.

Microsoft and Ford have published better than expected, the reaction of titles respectively 0.23% and 3.31%.

In contrast, the Citigroup opens down 1.71% to 4.02 dollars, the U.S. Treasury prepares to sell 1.5 billion shares to reduce state participation in the U.S. bank, gained during the rescue group.

Electrolux reported an operating profit below expectations for the second quarter and reaffirmed its forecast of a rise in demand this year in its main markets.

Operating income was 1.5 billion kronor (157 million) excluding exceptional items, against one billion kroner in the second quarter of 2009.The 17 banks and brokerages surveyed by Reuters had expected a net profit of 1.6 billion kronor for the period Apr-Jun 2010.

At 7:36 GMT, yielded 5.0% to 158.70 kronor on the Stockholm Stock Exchange.

"The demand for appliances on the group's main markets should be growing during 2010," the Swedish group in a statement.

The second largest manufacturer of household appliances has been forced to sharply reduce its costs to cope with the slowdown in consumption last year but said its main markets had continued to recover in the second quarter.

Electrolux said the North American market had risen for the third consecutive quarter after 13 quarters of contraction.

"At the industry level, the supply of aircraft destined for the United States in the second quarter would have increased approximately 10%," the group said.

"The entire European market has stabilized during the quarter, with major markets such as Germany, France and Sweden showing positive trends," he added, while noting that southern markets Europe had suffered a sharp slowdown over the period.

'The demand in eastern Europe has increased somewhat, further stated Electrolux.

Fiat announced Friday it would invest 700 million euros to produce the Panda in its factory near Naples Pomigliano after a landmark agreement with unions.

The decision to relocate production in Italy of the best-selling small car in Europe, built up in Poland, has been a while appear compromised because only 62% of factory workers in Naples had voted in favor of the plan Fiat, which also includes a significant change in working conditions.

The agreement gives Fiat more flexibility regarding the fees, limits the number of strikes and sick-leave.

It is part of an investment program of Fiat to eight billion euros until 2011 which is designed to make the group more efficient and competitive in a market that has experienced a severe crisis.

Fiat has finally decided to pursue his project after meeting with the four unions that support the project, FIM, UILM, Fismic and UGL.

Fiom, only union opposed the agreement, said it will help the government dismantle the labor law.

The union's national coordinator, Enzo Masini, said the union would consider a lawsuit for infringement of the rights of employees.

The Secretary General of the UILM Palombella Rocco told Reuters: "We hope the employees who voted against the plan will realize that the investment is important and it is in their own interest."

The Fiat Chief Executive Sergio Marchionne has written a four-page letter to convince employees.

"What we're doing is (…) to use all possible means to save the work, even work on which the Italian Republic is founded," says the boss of the group.

He added that his entire strategy for Italy depends on the agreement at Pomigliano.

The government of Silvio Berlusconi welcomed the announcement of Fiat.

The plant in Naples, which employs 5,000 people, shows the lowest productivity of the five Italian factories of Fiat. It is lower than that of the Polish site, which, with just over 6,000 workers, produced 600,000 cars per year.

General Motors expects to publish in July a notice specifying the terms of an IPO that could reach 15 to $ 20 billion, said a source familiar with the matter.

In addition, GM's talks with JPMorgan Chase and Wells Fargo in a deal allowing the public to have easier access to car loans from dealers, said two people familiar with the discussions.

The managing director of GM Ed Whitacre and other executives have said their preference for an IPO this year.Bankers expect an IPO from 10 to 20 billion dollars per sale of a portion of the state participation is 60.8%.

15-20 billion, the IPO would be GM's most prominent feature in the U.S. since the $ 19.7 billion from Visa in March 2008, according to data from Thomson Reuters.

This is also one of the largest IPOs ever held in the United States.

The Treasury has made 50 billion dollars in aid to GM in 2009, including 43 billion in cash and nearly seven billion of direct loans.

The automaker has repaid the loans in April.

GM was not immediately available.