Aurelia Butler

TOKYO (Reuters) – Japan’s move to bar most used-car sales to Russia slammed the brakes on a trade nearing $2 billion annually that had boomed in the shadow of sanctions over Ukraine elsewhere, according to trade data and market participants.In early August, Japan’s government banned exports of all but subcompact cars to Russia, cutting off a lucrative backchannel in trade in used Toyotas, Hondas and Nissans for a network of brokers and smaller ports, especially Fushiki, an export hub on the Sea of Japan.While wiping out Russia’s biggest source of used cars, the sanctions have driven down prices for second-hand cars in Japan and left brokers scrambling to send vehicles to other regions, especially right-hand drive markets in New Zealand, Southeast Asia and Africa.Russia’s demand for second-hand cars from Japan jumped sharply after global automakers, including Toyota (NYSE:TM), pulled back from operations following Moscow’s invasion of Ukraine.By last year, with sanctions elsewhere tightening, Russia was buying more than a quarter of Japan’s used-car exports for an average price of almost $8,200. That was more than double the price in 2020, when Russia took about 15% of Japan’s used-car exports.Those sales had been on track to top $1.9 billion for all of 2023 before Japan imposed its own tougher sanctions, trade data show.More than half of the 303,000 used cars imported by Russia in the first eight months of the year came from Japan, according to figures from Russian analytical agency Autostat.That compared to sales of 606,950 new cars of mainly Russian and Chinese brands over the same period, Autostat data showed.Toyama-based SV Alliance, a two-year-old car export business, had been part of the wartime boom that sent an average of some 6,500 used-cars to Russia every month through July from Japan’s Fushiki. The port is about 800 km (500 miles) from Russia’s Vladivostok, within two day’s sailing for a cargo ship.”Business is down about 70% and we’ve had to let a couple of people go because there isn’t enough work,” said Olesya Alekseeva, a logistics coordinator at SV Alliance.CHEAPER CARS FOR RECYCLERSJapan has been a leading used-car exporter for decades. A system of mandatory inspections pushes the cost of maintaining used cars higher for customers in Japan. Financing costs for new car purchases, by contrast, are low.The result: an export industry that has sent hundreds of thousands of cars on the road from Malaysia to Mongolia and Pakistan to Tanzania that were first purchased in Japan.Takanori Kikuchi, a director for automotive trade policy at Japan’s Ministry of Economy, Trade and Industry, said the government was “watching to see what kind of an impact” the new sanctions would have.Japan had originally banned exporting luxury vehicles to Russia in April last year. It added a prohibition on the export of heavy trucks in June.Under the new sanctions, dealers are still allowed to export smaller cars, such as the Toyota Yaris or the Honda (NYSE:HMC) Fit, to Russia.Element Trading, a used-car dealer in Niigata prefecture that borders Toyama, has seen the share of Russia in its business slide from a peak of above 50% to below 20%, chief executive Wataru Nishiwaki said.The number of used cars on offer surged more than 20% in August from a year earlier, while average vehicle selling prices posted a 7% drop, preliminary data from auto auction house USS showed.The price decline was welcomed by some. Battery recycling firm 4R Energy has seen a “significant” tailwind from declining used-car prices, including the Nissan (OTC:NSANY) Leaf, said chief executive Yutaka Horie.Lower prices give the joint venture between Nissan and trading house Sumitomo wider opportunity to secure supplies, he said.($1 = 149.3000 yen) More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.An early burst of positive sentiment – or relief – after the U.S. Congress agreed a last-minute deal to prevent a partial federal government shutdown could give Asian markets a boost at the open on Monday.But Chinese purchasing managers index data over the weekend, which pointed to mixed levels of services and manufacturing activity last month, may put a dampener on that. Other PMI data from across the region will also be released this week.Investors will be looking to start the fourth quarter on a positive note after a pretty awful third quarter. Stocks, bonds and non-dollar currencies around the world mostly fell, to varying degrees, as investors adjusted to the idea that U.S. interest rates will not come down as quickly as they had hoped. China’s markets will be closed for much of the week for the Golden Week holiday, and investors will surely welcome the break – the property sector is imploding, money is flowing out of Chinese assets, the currency is under heavy pressure and the economy is struggling.The International Monetary Fund is a little more optimistic though, saying last week that recent policy support from Beijing is having a positive effect and stabilizing the economy. The next step is for growth to re-accelerate after coming in well below forecasts all year. Economic surprises are still negative, but have recovered from the lows of the summer, levels that were historically consistent with periods of extreme economic and financial stress – 2008, 2015 and 2020.Monday’s batch of PMI reports include the latest snapshots from Australia, Japan and Indonesia, while Japan’s closely watched ‘tankan’ survey of business sentiment and activity will also be released.The first trading week of the fourth quarter gets underway with Asian and Pacific market-moving events likely to include central bank policy decisions from Australia, India and New Zealand, and a flood of inflation data from across the region.The inflation data includes the latest readings of consumer prices from Indonesia, South Korea, the Philippines, Thailand and Taiwan, all for the month of September.Meanwhile, the Reserve Bank of Australia, Reserve Bank of New Zealand and Reserve Bank of India are all expected to keep their key interest rates on hold at 4.10%, 5.5% and 6.5%, respectively. All eyes are on policymakers’ guidance. Investors reckon the RBA might have one last hike in it this year. But many other central banks have probably ended their rate-hiking cycles, so the question now is how long the ‘higher for longer’ pause lasts and when the easing cycles begin.Here are key developments that could provide more direction to markets on Monday:- Australia, Japan, Indonesia manufacturing PMIs (September) – Japan tankan survey (Q3)- Bank of Japan summary of opinions from Sept 21-22 policy meeting (By Jamie McGeever; Editing by Richard Chang) More

The extracts of the speech released by the party made no reference to taxes after Conservative lawmakers and even senior minister Michael Gove have called for tax cuts ahead of an election expected next year. On Saturday Hunt ruled out near-term tax cuts ahead of a mid-year fiscal statement due on Nov. 22, and he has supported Prime Minister Rishi Sunak’s goal to halve inflation, rather than lower taxes, this year. In the meantime, average weekly earnings have risen sharply for workers across the board, which the Bank of England has said is its biggest concern regarding inflationary pressures.On Monday Hunt will announce that the living wage, the minimum wage for workers over 23 years old, will rise to at least 11 pounds ($13.42) an hour from 10.42 pounds.”We are waiting for the Low Pay Commission to confirm its recommendation for next year. But I confirm today, whatever that recommendation, we will increase it next year to at least 11 pounds an hour,” Hunt will say.He will also announce a review that seeks to toughen the benefit sanctions system.Prior to Hunt’s speech, former Prime Minister Liz Truss will put pressure on the government to lower taxes in her only expected intervention at this year’s conference.A year ago as prime minister, she had to scale back her tax-cutting plans in a U-turn at conference, and the market turmoil she sparked forced her resignation in October. However, since then she has stuck to her message that lower tax, especially for businesses, is part of what Britain needs to spark growth.($1 = 0.8199 pounds) More