U.S. discount retailer Wal-Mart plans to take control of Japanese retailer Seiyu by increasing the percentage of its shares, giving it a full 50 percent of the company. And Japanese business confidence is up, but not as high as expected.
Wal-Mart plans to take control of the Japanese supermarket chain Seiyu by the end of the year, and turn it into a subsidiary. The U.S. retailing giant will buy shares worth $597 million, which will give it just over 50 percent of the company.
Wal-Mart has been slowly raising its stake in Seiyu, which has more than 400 stores in Japan. But Seiyu has struggled and lost money, which sparked Wal-Mart's decision to take control.
According to Japan's central bank, business confidence among Japanese manufactures improved slightly, but not as much as some investors expected. The central banks' latest quarterly survey of business sentiment, known as the Tankan, came in at plus-19 points in September, compared with plus-18 in the previous quarter.
Many investors and economists had expected the survey index to be plus-20.
HSBC's chief economist, Peter Morgan, says overall the outlook remains good.
"The results were slightly disappointing, but there is still … a bit better than previously and so it still shows that conditions are improving and the overall level of sentiment is consistent with the recently strong growth," he said. "So I think it's more a situation that we aren't getting any sort of big new upward surprises."
There has been a strong recovery in confidence in the electrical machinery sector as well as growing resilience among retailers, restaurant owners and leasing companies.
The Japanese government approved plans to cut 10 percent of its civil service jobs and to redirect resources as part of the reform efforts of Prime Minister Koizumi. The Cabinet Office says it will reduce the number of government workers by nearly 28,000 between 2006 and 2010.
The cuts will mostly affect the agriculture and health ministries. The government will not make any cuts to the Self-Defense Forces.
For the first time, five Japanese companies have won the rights to develop oil fields in Libya. This will help secure a stable oil supply for Japan, which imports nearly all of its oil.
Once the oil reserves are confirmed production could start between 2011 and 2012.