Morning business round-up: Japan's woes continue


What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Kicking off with the Asia-Pacific region, there was bad news for Sharp, the struggling Japanese consumer electronics giant, which had its credit rating cut to "junk" status by ratings agency Standard & Poor's.

The move follows Sharp's announcement that it had lost about $1.76bn (£1.12bn; 1.41bn euros) in the April to June quarter.

S&P downgraded Sharp two levels to BB+, warning that the company was suffering from weak cashflow and "deteriorating" market condtions.

Sharp shares plunged 13% on Friday.

There was further bad news from Japan as industrial output unexpectedly dropped in July after a slowdown in global demand hurt exports.

Trade ministry figures showed output was down 1.2% in July, a steep reversal from the 0.4% rise recorded in June and way out of line with analysts' expectations of a 1.7% increase.

Earlier this week, the Japanese government downgraded its economic assessment for the country.

Analysts said the figures were a cause for concern.

Media caption,
Biz Heads

By contrast, there was positive news from India as its economy grew faster than expected in the three months to the end of June, easing some fears about a sharp slowdown in Asia's third-largest economy.

Growth was 5.5% in the April to June period from a year earlier. Most analysts had forecast a rate of 5.2%.

That compares with a 5.3% annual growth rate in the previous quarter.

However, there are concerns that a lack of reforms, slowing factory output and investment may hurt long-term growth.

There was some good news for South Korean Samsung Electronics, still reeling after losing its patent battle with Apple in the US.

A court in Tokyo ruled that Samsung did not infringe Apple patents relating to transferring media content between devices.

It comes after Samsung lost a key patent case in the US last week and was ordered to pay more than $1bn (£664m) in damages.

Meanwhile, the World Bank said global food prices leapt 10% in July, raising fears of soaring prices for the planet's poorest.

The bank said that a US heatwave and drought in parts of Eastern Europe were partly to blame for the rising costs.

The price of key grains such as corn, wheat and soybean saw the most dramatic increases, described by the World Bank president as "historic".

The bank warned countries importing grains will be particularly vulnerable.

In Europe, the economic crisis continued with the news that unemployment across the 17-nation eurozone hit a record 18 million in July, according to the EU statistics agency.

Some 88,000 more people were added to the jobless total, but upwardly-revised data for June meant the unemployment rate remained at 11.3%.

Eurostat said the 18,002,000 jobless total was the highest since records began in 1995.

In the UK, the British Chambers of Commerce called for more government spending on infrastructure as it predicted that UK GDP would shrink by 0.4% in 2012.

The BCC also cut its growth forecast for 2013 from 1.9% to 1.2%.

Even European economic powerhouse Germany is faltering. Retail sales fell in July, with analysts citing rising fuel prices as the reason why shoppers reined in their spending.

Sales in Europe's largest economy fell 0.9% compared with the month before, the Federal Statistics Office said.

But June's figure was revised up from a drop of 0.1% to show a rise of 0.5%.

London was diverted by the battle between two Russian heavyweights, as Chelsea FC owner Roman Abramovich won his legal battle against exiled Russian oligarch Boris Berezovsky.

Mr Berezovsky, 65, claimed he had been intimidated into selling shares in Russian oil giant Sibneft for a "fraction of their true worth" and claimed some £3bn ($4.7bn) in damages.

But the judge ruled against him.

In the latest Business Daily programme from the BBC World Service the team asks: Is the boom in commodity prices over? Or does Asian economic growth mean it still has further to go? They also examine the commercial opportunities of space exploration.

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