World News

Tokyo governor re-elected after plaudits for COVID-19 response: exit poll

TOKYO (Reuters) – Yuriko Koike was re-elected Tokyo governor on Sunday, according to an exit poll released by public broadcaster NHK, after winning over voters with her handling of the COVID-19 pandemic in the Japanese capital.

Koike’s victory in the city that will host the Olympic Games next year had been widely expected even though it confirmed 111 new coronavirus infections on Sunday, the fourth successive day that the tally of new cases has exceeded 100.

“Our urgent task, above everything else, is coronavirus responses,” Koike, who became Tokyo’s first woman governor in 2016 and has won plaudits for her straight-talking on the coronavirus, said after NHK called her election win.

“This is a critical time to prepare ourselves for the second wave,” she said via the Internet.

The metropolis accounts for 11% of Japan’s population, but has represented half of the country’s daily infections in recent weeks.

Koike, 67, will face a difficult task of trying to curb the coronavirus without stifling business too much in the capital, which accounts for about 20% of Japan’s economy.

Preventive measures pushed Japan, the world’s third-biggest economy, into a recession in the first quarter, with a deeper contraction expected in the April-June period.

Koike, often floated as a potential prime minister, will also be the face of the host city of the next Olympics, which had been scheduled to start this month but were postponed by a year because of the coronavirus.

Koike has said she aims for a safe, secure and simplified event. A survey by the Asahi newspaper showed last month that 59% of those polled believe the Games should be cancelled or postponed again.

“The event represents a big hope for athletes as well as children. Municipalities are waiting in earnest for torch relays,” Koike said in a joint interview with Japanese media, which was also held after her election victory was called.

“In order for their wishes to come true, I would like to press ahead firmly with coronavirus responses.”

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World News

Tokyo's first woman governor set for re-election even as coronavirus cases rise

TOKYO (Reuters) – Tokyo Governor Yuriko Koike looks set cruise to victory in her bid for re-election on Sunday, buoyed by approval of her handling of the novel coronavirus even as a recent rise in infections triggers new concerns in the Japanese capital.

Koike, 67, often floated as a potential prime minister, won plaudits from the public for her straight-talking approach to the pandemic in contrast with what critics say was Prime Minister Shinzo Abe’s initially slow and clumsy response.

A former defence and environment minister, Koike is promising to prepare Tokyo – which accounts for about 20% of Japan’s economy – for any second wave of infections and gain public understanding for a “simplified” Olympics next year after the 2020 Summer Games were postponed because of the coronavirus.

“She’ll win by a landslide,” said independent political analyst Atsuo Ito, noting a poll in late May put her approval rating at about 70% while her opposition is divided.

A former television announcer with well-honed communication skills, Koike warned in late March that Tokyo could face a coronavirus lockdown and called for an early state of emergency to tackle it.

She then tussled with Abe’s government over what businesses to target for shutdowns after he declared an emergency in April.

Japan has not seen the explosive outbreak of the virus suffered elsewhere but Tokyo, with a population of some 14 million, accounts for nearly 6,400 of its approximately 19,000 cases.

On Thursday, the metropolis confirmed 107 new cases, the most in two months, but the government – eager to revive a slumping economy – said it was not planning to reimpose the emergency that was lifted on May 25.

Koike has said it might be necessary to a hold a more bare-bones Olympics next year because of the pandemic’s impact, but it is not clear who will shoulder the huge costs of the postponement and whether the Games can really go ahead in 2021.

Among other challenges she will face are repairing the city’s finances and coping with an ageing population.

Koike, who has switched parties several times and shares many of Abe’s conservative views, bolted from his Liberal Democratic Party (LDP) in 2016 to make a successful bid to become Tokyo’s first female governor.

A year later, she formed an upstart party in the hope – quickly dashed – of ousting the LDP from power.

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World News

Japan asks US to extradite two men over Ghosn case

Japan has asked the US to extradite a former special forces soldier and his son for allegedly helping ex-Nissan boss Carlos Ghosn flee Japan last year.

Ex-Green Beret Michael Taylor and his son Peter were held in Massachusetts in May, several months after Japan had issued warrants for their arrest.

The US authorities confirmed a formal extradition request was submitted.

Mr Ghosn, who was detained in Japan on financial misconduct charges in 2018, made a dramatic escape last year.

The former Nissan boss denies the charges against him.

Despite being under house arrest and monitored 24 hours a day, on 29 December he managed to fly to the Lebanese capital Beirut via Turkey.

Details of the Taylors’ alleged involvement in the escape are unclear. But Japanese prosecutors have said the two were in Japan at the time and helped Mr Ghosn evade security checks as he left.

In May, prosecutors in Turkey charged seven people over the escape. The suspects – four pilots, two flight attendants, and an airline executive – are also accused of helping Mr Ghosn flee.

They go on trial in Istanbul on Friday, with Turkish prosecutors seeking up to eight years in jail for the four pilots and the airline executive.

Full details of the escape have never been fully explained. Mr Ghosn, who holds Brazilian, French and Lebanese nationalities, ran Renault and Nissan as part of a three-way car alliance.

He is accused of misreporting his compensation package, but has insisted he can never get a fair hearing in Japan.

Since his arrival in Lebanon, he has told reporters he was a “hostage” in Japan, where he was left with a choice between dying there or running.

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Dollar edges lower amid uncertain U.S. outlook

NEW YORK (Reuters) – The dollar slipped on Tuesday, alternating between gains and losses, as markets digested less bearish comments from U.S. monetary officials along with a more dire prognosis from the country’s top medical expert on the spread of the novel coronavirus.

The dollar gained against the euro and the yen, but fell versus sterling, the Swiss franc, and commodity currencies such as the Australian, New Zealand and Canadian dollars.

Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, in testimony before the U.S. House of Representatives Financial Services Committee on Tuesday, suggested a willingness to do more for the U.S. economy as it battles the enormous fallout from the virus outbreak.

Mnuchin said he is working with the House and the Senate to pass more coronavirus relief by the end of July, while Powell said the Fed can lower the minimum loan threshold under the Main Street lending program in the future.

On the other hand, Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, in remarks to a Senate committee on Tuesday warned of the risks of a surge in cases and said the country should not bank on the availability of a safe and effective COVID-19 vaccine.

In early afternoon trading, the dollar index slipped to 97.380. For the quarter and month, the dollar fell 1.6% and nearly 1.0%, respectively. It was the worst monthly performance for the dollar since December.

“The dollar is consolidating right now,” said Marc Chandler, chief market strategist, at Bannockburn Forex in New York.

“The upside on the dollar really began on June 10 and so I think we can see one more leg up in the dollar,” he said. “As we get into July, there is some uncertainty — today for example is the last day of the PPP (payroll protection program) and at the end of next month is the end of the unemployment claims, unless it gets extended.”

There are concerns as well on the resurgence in U.S. coronavirus cases.

The United States saw a 46% increase in new cases of COVID-19 in the week ended June 28 compared with the previous seven days, with 21 states reporting positive test rates above the level that the World Health Organization has flagged as concerning.

In other currencies, the dollar gained 0.3% versus the yen, to 107.93 yen JPY=EBS.

The euro inched lower against the dollar to $1.1234. It was earlier pressured by data showing underlying price pressures dropped again in the euro zone.

Over the quarter, the euro staged a 1.6% comeback after falling by a similar margin during the first three months of the year. For the month of June, the euro was up 0.9%.

Traders said there remains a barrier of $1.1200 for the euro on the downside.

Sterling reversed losses against the dollar to trade up 0.2% at $1.2328 GBP=D3. The pound fell earlier after data showed the economy shrank by 2.2% between January and March, its worst performance since 1979, as households slashed spending.

The Swiss franc CHF=EBS gained against the dollar. The greenback was last down 0.5% at 0.9467 franc CHF=EBS.

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Grim data keeps euro, sterling under pressure

LONDON (Reuters) – A fresh batch of grim economic data kept the euro and the pound under pressure on Tuesday as sentiment faltered amid fears new COVID-19 hot spots across the world might jeopardise the swift recovery from the pandemic investors are hoping for.

The common currency lost further ground against the dollar in morning trading after underlying price pressures dropped again in the euro zone, underscoring fears that consumer price growth will remain anaemic for years.

Separately, Britain’s Office for National Statistics said the economy shrank by 2.2% between January and March, its worst performance since 1979, as households slashed their spending. [L8N2E714Z]

“It’s undeniable that today’s data is not flattering, for both UK and Euro zone”, commented Ricardo Evangelista, senior analyst at ActivTrades.

“Today’s numbers offer support to the dollar, especially as concerns are growing over a second wave of the coronavirus pandemic”, he added.

The euro EUR=EBS fell as low as $1.1199, losing close to 0.4%, before picking up slightly towards midday.

Over the quarter, the European currency staged a 1.7% comeback after falling by a similar margin during the first three months of the year marked by the coronavirus financial market crash.

Sterling traded at $1.2280 GBP=D4 after sliding to a one-month low of $1.2252 on Monday when concerns about how Britain’s government would pay for its planned infrastructure programme added to worries about its ability to seal a trade pact with the European Union.

Against a basket of currencies, the dollar index was up 0.21% at 97.632, holding on to overnight gains after upbeat U.S. home sales boosted Wall Street.

“From the market’s point of view there is therefore nothing speaking in favour of the euro this morning, in particular in comparison to the surprisingly strong US home sales data yesterday”, said Commerzbank FX strategist Esther Reichelt.

Market have been torn between in the past trading days between some positive economic developments, notably a rebound in factory activity in China, and a seemingly resurgent pandemic.

California and Texas saw record rises in new infections on Monday while in Britain, a reinforced lockdown was imposed in the city of Leicester.

A warning from U.S. Federal Reserve Chair Jerome Powell that the outlook for the world’s biggest economy was “extraordinarily uncertain”, also kept investors on their toes.

“Markets are jumpy. Tension remains between economic and virus pickup,” said Moh Siong Sim, an FX analyst at the Bank of Singapore.

The safe-haven Swiss franc CHF=EBS slipped marginally. The dollar rose 0.1% against the franc to 0.9506 while it also climbed against the Japanese yen, another currency considered a safe store of value, and was last up 0.1% to 107.73 yen JPY=.

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Japan factory output slumps as economy sinks deeper in recession

TOKYO (REUTERS) – Japan’s industrial output fell for a fourth straight month in May to the lowest level since the global financial crisis, highlighting the widespread impact of the coronavirus on factory and overall business and consumer activity.

The world’s third-largest economy is bracing for its worst postwar recession, hurt by coronavirus lockdown measures at home and overseas that have upended supply chains, kept businesses shut and depressed consumer spending.

Ministry of Economy, Trade and Industry data out on Tuesday (June 30) showed that factory output fell 8.4 per cent month-on-month in May to 79.1, a level not seen since March 2009 when the financial crisis sapped global demand.

The slump followed a 9.8 per cent decline in the previous month, and was much bigger than the median market forecast of a 5.6 per cent drop in a Reuters poll of economists.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expect output to rise 5.7 per cent in June and 9.2 per cent in July, the data showed.

The government left its assessment of industrial production unchanged to say it was “lowering sharply”, the bleakest official view since the global financial crisis in late 2008.

Japan’s economy shrank an annualised 2.2 per cent in January-March, slipping into recession for the first time in 4-1/2 years, and analysts expect the health crisis to have driven a deeper slump in the current quarter.

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