Aurelia Butler

PANAMA CITY (Reuters) – The Panama Canal’s water levels have not recovered enough as the end of the rainy season approaches and limits on daily transit and vessel draft will stay in place for the rest of the year and throughout 2024, the waterway’s authority said on Tuesday.The restrictions, implemented earlier this year to conserve water amid prolonged drought, triggered a backlog of ships waiting to pass the key global waterway, which handles an estimated 5% of world trade, contributing to more expensive freight costs ahead of the approaching Christmas season.The bottleneck at the canal connecting the Pacific and Atlantic Oceans has eased about 20% since last week, but waiting times to transit the waterway doubled last month from July in some vessel categories, while many ship owners have opted for alternate routes to avoid costly delivery delays.The authority that manages the canal added in a statement that this week’s ship traffic represents a “normal” level for this season. It noted that a month before the end of its 2023 fiscal year, the canal’s total vessel crossings already total nearly 800 more that what the canal authority’s budget had forecast. The additional vessel crossings, which contribute to a total of more than 13,000 transits so far during the fiscal year, show strong demand by vessel owners.But insufficient rainfall continues to negatively impact the Gatun Lake, which feeds the canal, lowering its water level to 24.2 meters (79.7 feet), versus 26.6 meters (87.41 feet) for the month of September in recent years.Each vessel passing through the 50-mile (80-km) trans-oceanic waterway uses some 51 million gallons (193 million litres) of water from the lake.At the end of the rainy season in November, the lake’s water level typically reaches some 27 meters (89 feet) and then drops to slightly below 26 meters (85 feet) after the dry season ends in April, according to the canal authority.Experts have warned about maritime trade disruptions ahead of what is shaping up to be an even drier period next year. They argue that a potential early start to Panama’s dry season and hotter-than-average temperatures could increase evaporation and result in near-record low water levels by April. More

TOKYO (Reuters) – Japan’s top currency diplomat Masato Kanda said on Wednesday that Japanese authorities won’t rule out any options on currencies if speculative moves persist, a comment apparently warning against a sell-off in the yen.It was the strongest warning since mid-August, when the Japanese currency slid past the key threshold of 145 per dollar. Since then, the authorities have stopped firing warning shorts, keeping traders guessing on Japan’s intervention strategy. Kanda, vice minister of finance for international affairs, was speaking to reporters after the dollar broke above 147 yen to edge closer to 148 yen overnight, this year’s strongest ever against the Japanese currency.The dollar has gained momentum on the view the Federal Reserve may raise rates one more time to cope with persistently solid inflation, while the Bank of Japan is expected to continue powerful easing to stoke demand-pull inflation driven by strong wage growth. Such policy diversion is behind the yen’s weakness.”We won’t rule out any options if speculative moves persist,” Kanda told reporters. “Needless to say, it’s important for currency moves to reflect fundamentals.”Japanese core consumer prices, running at above 3% for more than a year has shown little signs of sustainable inflation accompanied by solid wage gains. More

There was a feeling of national pride in Japan as the biggest participants in the semiconductor industry from ASML to Applied Materials to Lam Research gathered on the northern island of Hokkaido when construction for the country’s new chip plant kicked off last week. In front of the gathered guests, trade minister Yasutoshi Nishimura boasted that Chitose, a city of less than 100,000 people where the plant for newly formed joint venture Rapidus will be built, had “the potential to overtake Silicon Valley”. Such claims might just be typical grandstanding for a groundbreaking ceremony but there is no question about the stakes in Japan’s ¥5tn ($34bn) experiment to revive itself as a semiconductor powerhouse. Success or failure will have significant ramifications not only for Japan but also for the US and other allies looking to reshape the global chip supply chain amid rising tensions with China. The partnership between Rapidus, which is backed by the government and Japan’s biggest corporations, and IBM to develop advanced chips is evidence of the industrial blocs emerging among friendly nations as they seek to reduce their dependence on chips produced by Taiwan Semiconductor Manufacturing Company.But while many in Japan desperately want this new strategy to work, it is hard to overlook the difficulty Rapidus faces in pulling it off. Its challenges begin with the country’s severe labour shortage. The number of construction workers has already fallen nearly 30 per cent since 2009, and the shortage extends to jobs such as truck drivers, plant operations managers and engineers. Rapidus has already hired more than 200 employees, but acquiring top talent will be a challenge in a place like Hokkaido where there is no ecosystem for chip companies and their suppliers. The yen’s sharp decline also makes it harder to recruit skilled workers from overseas. Then there is also the critical question of manufacturing technology. In an interview earlier this year, Atsuyoshi Koike, the chief executive of Rapidus, said the company was founded on the lessons drawn from Japan’s decline in the global chip industry, which it used to dominate in the 1980s before ceding its edge to rivals in South Korea, Taiwan and eventually China. “The reason why Japan failed was because it tried to make everything on its own,” Koike said. “We’re not going to revive Japan’s semiconductor industry, but we are talking about how Japan’s manufacturing can make a global contribution.” Rapidus will work with IBM with the aim of starting mass production of 2-nanometer node chips from 2027. The company will also co-operate on technology with IMEC, the nanotechnology research centre outside Brussels used by the most advanced chipmakers to build prototypes. But while IBM has led research and development of the advanced chip technology, analysts question how Rapidus can compete against rivals such as TSMC and South Korea’s Samsung in terms of production quality and stable output. Japan only has expertise to manufacture far less advanced 40nm chips. IBM also faces a lawsuit from Global Foundries, which alleges that the US company unlawfully disclosed its intellectual property and trade secrets to partners including Rapidus. Hiroshi Fushimi, an analyst at Shobayashi International Patent and Trademark Office, said the lawsuit’s impact on Rapidus was likely to be limited, although it was difficult to rule out the legal risk entirely.IBM said the allegations made by Global Foundries were “entirely baseless”. Rapidus declined to comment. In addition to manufacturing capability, Fushimi also questioned whether Rapidus had enough financial firepower to be competitive as a semiconductor manufacturer. Rapidus estimates that the company would need about ¥5tn to achieve mass production of the advanced chips. So far, the government has agreed to provide ¥330bn in subsidies and is promising more. Compared with China and the US, critics have long argued that Japan’s subsidies for industry in general are too small particularly because the government tries to distribute equally to a number of companies instead of betting on a select number of potential winners. Perhaps most telling of all is the tiny amount of investment Toyota, Sony, Kioxia, NTT, SoftBank’s mobile and its three other corporate backers have agreed to provide: a grand total of ¥7.3bn. Even that, Koike admits, took a lot of persuasion: “It wasn’t easy for board members to say yes to an investment into what they thought could end up as fantasy.”[email protected] More

Working-age UK households will see no improvement in living standards before the next general election expected in 2024, according to analysis published by a leading think-tank.The Resolution Foundation said on Wednesday that while average wages were now growing faster than consumer prices, as inflation started to subside, the gains would be offset by higher taxes and mortgage payments and the end of government cost-of-living payments.About half of the £17bn increase in annual mortgage costs caused by rising interest rates has yet to be passed on to households because many have so far not had to renew fixed rate mortgage deals, the think-tank said. Bills for people who need to remortgage next year could rise by £3,000, with the typical disposable income of borrowers projected to be 7 per cent lower in 2024-25 than in 2021-22.The foundation also said that because tax thresholds have been frozen until 2028, growth in post-tax pay would be much slower than in gross pay. For those auto-enrolled into workplace pension schemes — for which the contribution threshold has also been frozen — real-terms growth in take-home pay, after accounting for pension contributions, could be “essentially zero” over the period from 2019-20 to 2024-25. It expected real disposable income for a typical working-age household to flatline in 2024-25, having fallen by 4 per cent over the past two years.

The poorest 50 per cent of households, who have benefited more from one-off government support, would see their disposable income fall by roughly 1 per cent, it said, even assuming that the government raises working-age benefits next April in line with this September’s inflation rate.“Should the government renege on the usual uprating measure, the scale of income falls for millions of families will be even greater,” the foundation said.Meanwhile, higher interest payments on savings will boost income for pensioners, wealthier households and people who already own their home outright.“The good news for the government is that Britain’s economic outlook is improving as it enters a crucial election year,” said Adam Corlett, the foundation’s principal economist. “The bad news is that the living standards outlook is still dire.”The think-tank’s analysis suggests that Prime Minister Rishi Sunak will be fighting his election campaign against a bleak economic backdrop, despite recent data revisions that have made the UK’s performance since the pandemic look stronger and in line with other advanced economies. The foundation said a typical person of working age would be 4 per cent poorer in 2024-25 than they had been in 2019-20, making the current parliament the worst on record for income growth.“There is no example of a government retaining power with such weak median income growth in the general election year since comparable data began in the 1960s,” the think-tank noted.The Treasury was contacted for comment.

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WASHINGTON (Reuters) – The U.S. Senate on Tuesday voted overwhelmingly to clear the way for the confirmation this week of Federal Reserve Governor Philip Jefferson to be vice chair of the U.S. central bank.The 83-10 cloture vote, which limits debate on his nomination, marks the next-to-last step in a process that would install Jefferson with solid bipartisan backing in the No. 2 post at the Fed, which is chaired by Jerome Powell. President Joe Biden has also nominated Fed Governor Lisa Cook to a new 14-year term, and picked World Bank economist Adriana Kugler to fill the last open seat of the seven-member Fed Board. All three nominees won approval in July from the Senate Banking Committee to advance to consideration by the full Senate, and Jefferson’s is the first to move ahead. The Senate will vote on Cook and Kugler’s nominations in the next few days, Senator Sherrod Brown said before Jefferson vote.Senate Majority Leader Chuck Schumer, however, sets the schedule for floor debate and votes on all legislation and nominations.The Fed is widely expected to leave its policy rate in its current range of 5.25%-5.00% when it meets later this month, marking a possible end to what has been a year and a half of aggressive rate hikes to beat too-high inflation. Jefferson and Cook have both voted for every rate hike since they joined the Fed in May 2022. More