Economy

SANBAGAWA, Japan (Reuters) – Benmou Suzuki’s dilapidated 420-year-old temple, located deep in the forest near a tiny Japanese mountain village, hardly looks like prized real estate.Yet the monk was recently approached by two men, who said they were real estate brokers and wanted to know if he was interested in selling.He suspects they weren’t really interested in the ornate building at the trailhead of a sacred mountain, but the special tax status that comes with running a religious property. “There are people out there who want a temple, even a mountain temple like this. In fact, considering the value of the religious corporation status, this temple could fetch quite a lot of money,” said 52-year-old Suzuki.As Japan’s population falls and interest in religion declines, there are fewer people to contribute to the upkeep of the country’s numerous temples and shrines. Suzuki’s Mikaboyama temple, for example, is located in Sanbagawa – an area three hours drive from Tokyo with only 500 residents and which also has three other Buddhist temples, one Shinto shrine and a church. A surge in religious properties coming up for sale has Japanese authorities worried that prospective buyers are not interested in them for heavenly purposes. Rather they fear many are out to dodge taxes or possibly even launder money. “It’s already a sense of crisis for us and the religious community,” said an official at Japan’s Agency for Cultural Affairs, which oversees religious sites. Cases of temple or shrine properties being extensively repurposed have triggered public outrage. In Osaka, a temple sold in 2020 was later razed and dozens of graves were relocated to make way for a property development. In Kyoto, a case about a temple that was demolished and turned into a parking lot made headlines this year. Owning a temple, shrine or church recognised as a religious corporation in Japan can confer sizeable tax benefits. Businesses under such corporations that offer religious services such as funerals do not have to pay taxes while other non-religious businesses also enjoy preferential tax rates. A wide range of undertakings are allowed from restaurants to hair salons to hotels.Japan had about 180,000 religious sites with corporation status as end-2023, according to the agency’s data. The number of so-called inactive corporations – such as those with no religious events for more than a year – jumped by a third to more than 4,400. When monks or priests die without a successor, the overseeing religious group will usually appoint someone to take over or voluntarily relinquish the site’s corporation status.However, there are around 7,000 religious sites that operate independently of these groups and are considered easy to acquire, according to the agency and specialist brokers. The cultural affairs agency said it has stepped up efforts to dissolve the corporation status of inactive religious sites to stop them from being targeted by dubious buyers. And when big earthquakes hit, often damaging temples and shrines, agency officials visit religious groups in those areas, warning them about falling prey to such buyers.Last year, 17 religious corporations were voluntarily dissolved and six were ordered to dissolve. The agency said the number would increase this year and next year as it ratchets up scrutiny. It might seem easier for Japan to change its laws to more strictly control the criteria for purchasing religious sites. But the agency said the government is wary about amending laws related to religion as that could be seen as impinging on religious freedom which is guaranteed by Japan’s constitution. Reuters checks of six websites specialising in brokering the sale of religious properties showed hundreds on the market. Most are only obliquely described online with brokers saying sellers prefer to conduct sales as privately as possible. Osaka-based broker Takao Yamamoto told Reuters interest is surging. A religious corporation licence alone can fetch 30 million yen ($210,000), he adds. Some religious sites, especially those with profitable graveyards, are advertised for millions of dollars.”Anyone can buy independent sites as long as you have money…even foreigners can buy them. Recently, a lot of Chinese people are trying to buy them,” Yamamoto said.For his part, Suzuki says he has no intention to sell Mikaboyama temple and is working on ideas to raise funds to maintain it. “Temples are places for local people to gather and forge connections. We just can’t get rid of them,” he said. More

The company has lost about a quarter of its stock market value this year and is down more than 21% since Donahoe joined as the top executive in 2020.Shares of rivals Adidas (OTC:ADDYY), Hoka owner Deckers and On Holding have risen 23.3%, 36.5% and 84.4%, respectively, this year.Donahoe began his stint as CEO in 2020 with a plan to drastically grow e-commerce and to boost sales at its roughly 1,000 Nike stores. But Nike forecast a drop in its fiscal 2025 sales following at least four consecutive quarters of poor sales.Here are some other major events for Nike on Donahoe’s watch:Oct. 22, 2019 Nike named Donahoe, a former eBay (NASDAQ:EBAY) chief executive officer, as its new CEO, effective Jan. 13, 2020, replacing long-time chief Mark Parker.    June 25, 2020 Nike swung to a quarterly loss for the first time in two years. Donahoe laid out Nike’s long term plan for its digital channel to account for 50% of its overall business.  Donahoe said at the time that Nike intentionally shifted away from its prior focus on selling shoes through department stores and third party retail chains.  He said it now focused on giving consumers “a more premium shopping experience” at Nike.com and Nike stores.    June 26, 2020 Nike warns of jobs cuts.     July 24, 2020 Donahoe’s pay was about $53.5 million, according to a filing. Dec 13, 2021 Nike bought virtual sneaker company RTFKT for an undisclosed sum, in what Donahoe said was a key step in Nike’s digital transformation.    March 21, 2022 Revenue from Nike’s mobile app was up more than 50% in the third quarter. “Growing participation in new digital platforms” gave Nike “innovative ways to connect with consumers, letting them unlock virtual experiences, products and rewards,” Donahoe said.   June 23, 2022 Four months after Russia invaded Ukraine, and two months after rival Puma suspended operation of all its stores in response to Moscow’s invasion, Nike said it would exit Russia.   Rival Adidas said in October 2022 that it had decided to permanently halt business in Russia.   Dec 20, 2022 Nike reported record digital results, as well as strong store traffic with COVID restrictions lifting. “We directly connect with the consumer no matter where they shop,” Donahoe said, referring to its direct sales. June 29, 2023 Nike warned of a weak start to fiscal 2024 as shoppers in the U.S. turned cautious. “We’ll continue to expand our marketplace strategy to … drive growth,” Donahoe said.  Dec 21, 2023 Nike cut the number of Nike products in a $2 billion cost savings program due to weak sales across its channels. CFO Matthew Friend said Nike’s direct-to-consumer focus had “added complexity and inefficiency.” Feb 15, 2024 Nike cuts about 2% of its total workforce of about 80,000 employees to lower expenses.    March 21, 2024 Donahoe said Nike must “lean in” with its retail partners. It also warned of weak sales in first half of fiscal 2025. June 27, 2024 Nike forecast a surprise drop in sales for fiscal 2025, which Donahoe said would be a “transition year” as digital sales tanked.    June 28, 2024 Nike’s stock tumbles to its worst day ever, wiping out $28.41 billion from its market valuation.     July 25, 2024 Donahoe’s annual compensation was $29.2 million, according to a filing.  Aug. 14, 2024  Billionaire investor William Ackman built new stakes in Nike. Other shareholders and at several Wall Street analysts begin to speculate about the possibility of executive changes.  Sept. 19, 2024 Nike said President and CEO Donahoe will retire, and former senior executive Elliott Hill will succeed him, effective Oct. 14. After hours share gains added $9 billion in market cap. More

(Reuters) – A look at the day ahead in Asian markets.A bumper week of central bank meetings that included the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday rounds off on Friday with attention fixed on Asia, and policy decisions from the Bank of Japan and People’s Bank of China. Investors in Asia go into these meetings in buoyant mood, fired up by the Fed’s half percentage point rate cut and signal that rates will continue to fall over the next couple of years. Concerns over the U.S. labor market, the nature of the U.S. economy’s ‘landing’, and the wisdom of easing policy so much when financial conditions are already the loosest in years will surely return at some point. But that’s for another day. Right now, animal spirits are coursing through markets, and risky assets in Asia are set to close the week on a high. The MSCI World, S&P 500 and Dow all hit new highs on Thursday, the Nasdaq jumped 2.5%, and the Russell 2000 index of U.S. small caps rose for a seventh day to register its longest winning stretch since March, 2021. Nikkei futures are pointing to a rise of 1.6% at the open on Friday, and the MSCI Asia ex-Japan index is 1.5% away from its highest level since April 2022.The BOJ is widely expected to stand pat and wait to see how inflation dynamics play out before deciding when to raise rates again, and as fate would have it, Japanese consumer inflation figures for August will also be released on Friday. Economists expect the annual core rate to tick up to 2.8% from 2.7% in July. That would mark the fourth consecutive rise and lift inflation further above the BOJ’s 2% target.Political influence may be factoring into BOJ officials’ thinking. Sanae Takaichi, Japan’s minister in charge of economic security and a leading candidate in the ruling party’s leadership race, has warned the BOJ against raising rates. The PBOC, meanwhile, is expected to trim its main policy and benchmark lending rates on Friday, emboldened by the Fed’s outsized rate cut that removed some of the risks around sharp yuan declines.The economic challenges facing Chinese authorities are well known by now. They include a property sector crash that may take years to play out, fanning flames of deflation, and GDP growth that will probably fall well short of Beijing’s 5% target.For growth, investor sentiment and asset prices to meaningfully recover, huge monetary and fiscal stimulus will be needed. But the signs are that won’t happen, and Beijing is opting for piecemeal efforts over any ‘bazooka’.Shanghai stocks are set for a rare weekly rise – only the fourth of the last 18 – but are barely 1% away from falling to levels last seen in January 2019. Here are key developments that could provide more direction to Asian markets on Friday:- Japan central bank decision – Japan inflation (August)- China central bank decision More

WASHINGTON (Reuters) – Missouri-based airline executive Farhad Azima said on Thursday he had settled with the law firm Dechert and two of its former senior attorneys over allegations they took part in a scheme to hack his emails and use them in court to destroy his business.Lawyers’ use of hackers to win cases has drawn increasing attention. A 2022 Reuters investigation showed how a group of mercenary hackers had targeted more than 1,000 different attorneys at more than 100 law firms around the world. In a statement, Azima said he was “extremely pleased” to announce that the New York lawsuit against Dechert and former Dechert lawyers Neil Gerrard and David Hughes had been settled.The terms of the settlement were not disclosed and a lawyer for Azima declined to say what they were. Representatives for Dechert, Gerrard, and Hughes did not immediately return messages seeking comment. A court filing in Manhattan court showed the case against the three parties had been dismissed.The settlement marks another victory Azima, who in April was able to get British judgments against him worth more than $4 million thrown out after a court ruled that Dechert’s client, the Gulf emirate of Ras Al Khaimah, had covered up the use of hackers to win the case. In February, Dechert announced it was paying Azima 3 million pounds ($3.8 million) plus unspecified costs to settle a separate British legal action. The firm said it did so “without any admission of liability.”Last year Dechert settled with another hacking victim, the journalist Jay Solomon, who had accused the firm of using hackers to steal his messages. In his statement, Azima said he is still suing other parties alleged to have participated in the hacking, including Israeli private eye Amit Forlit, who is currently fighting extradition to the United States on hacking charges. Forlit’s lawyer did not immediately return a message seeking comment. More

Fed Chair Jerome Powell has unveiled his latest buzzword to describe monetary policy, with a “recalibration” of policy at a pivotal moment for the central bank.
Asset prices soared Thursday as investors took Powell at his word that the unusually outsized move wasn’t in response to a substantial weakening of the economy but rather an effort to shore up the labor market.
“It really allows him to push this narrative that this easing cycle is not about us being in recession, it is about extending the economic expansion,” PGIM economist Tom Porcelli said. “I think it’s a really powerful idea.”

Federal Reserve Chair Jerome Powell has unveiled his latest buzzword to describe monetary policy, with a “recalibration” of policy at a pivotal moment for the central bank.
At his news conference following Wednesday’s open market committee meeting, Powell used variations of the word no fewer than eight times as he sought to explain why the Fed took the unusual step of a half percentage point rate cut absent an obvious economic weakening.

“This recalibration of our policy stance will help maintain the strength of the economy and the labor market, and will continue to enable further progress on inflation as we begin the process of moving forward a more neutral stance,” Powell said.
Financial markets weren’t quite sure what to make of the chair’s messaging in the meeting’s immediate aftermath.
However, asset prices soared Thursday as investors took Powell at his word that the unusually outsized move wasn’t in response to a substantial slowing of the economy. Rather, it was an opportunity to “recalibrate” Fed policy away from a rigid focus on inflation to a broader effort to make sure a recent weakening of the labor market didn’t get out of hand.
The Dow Jones Industrial Average and S&P 500 jumped to new highs in trading Thursday after swinging violently Wednesday.
“Policy had been calibrated for meaningfully higher inflation. With the inflation rate now drifting close to target, the Fed can remove some of that aggressive tightening that they put into place,” said Tom Porcelli, chief U.S. economist at PGIM Fixed Income.

“It really allows him to push this narrative that this easing cycle is not about us being in recession, it is about extending the economic expansion,” he added. “I think it’s a really powerful idea. It’s something we had been hoping that he would do.”

Powell’s buzzwords

Several of Powell’s previous efforts to provide buzzy descriptions of Fed policy or its views on the economy haven’t worked out so well.
In 2018, his characterizations of the efforts to reduce its bond holdings as being on “autopilot,” as well as his assessment that a string of rate hikes the same year had brought the Fed “a long way” from a neutral interest rate spurred blowback from markets.
More famously, his insistence that an inflation surge in 2021 would prove “transitory” ended up causing the Fed to be slow-footed on policy to the point where it had to enact a series of three-quarter percentage point rate increases to pull down inflation.
But markets expressed confidence in Powell’s latest assessment, despite this track record and some signs of cracks in the economy.

“In other contexts, a larger move may convey greater concern about growth, but Powell repeatedly stressed this was basically a joyous cut as ebbing inflation allows the Fed to act to preserve a strong labor market,” Michael Feroli, chief U.S. economist at JPMorgan Chase, said in a client note. “Moreover, if policy is set optimally, it should return the economy to a favorable place over time.”
Still Feroli expects the Fed will have to follow up Wednesday’s action with a similar-sized move at the Nov. 6-7 meeting unless the labor market reverses a slowing pattern that began in April.
There was some good news on the jobs front Thursday, as the Labor Department reported that weekly claims for unemployment benefits slid to 219,000, the lowest since May.

An unusual move lower

The half percentage point — or 50 basis point — cut was remarkable in that it’s the first time the Fed has gone beyond its traditional quarter-point moves absent a looming recession or crisis.
Though Powell did not give credence to the notion that the move was a makeup call for not cutting at the July meeting, speculation on Wall Street was that the central bank indeed was playing catch-up to some degree.
“This is a matter of maybe he felt like they were getting a little bit behind,” said Dan North, senior economist for North America at Allianz Trade. “A 50 basis point cut is pretty unusual. It’s been a long time, and I think it was maybe the last labor market report that gave him pause.”
Indeed, Powell has made no secret of his concerns about the labor market, and stated Wednesday that getting in front of a potential weakening was an important motivator behind the recalibration.
“The Fed still sees the economy as healthy and the labor market as solid, but Powell noted that it is time to recalibrate policy,” wrote Seth Carpenter, chief global economist at Morgan Stanley. “Powell has stressed and proven with this rate cut that the FOMC is willing to move gradually or make bigger moves depending on the incoming data and evolution of risks.”

Carpenter is among the group that expects the Fed now can dial down its accommodation back to quarter-point increments through the rest of this year and into the first half of 2025.
Futures markets traders, though, are pricing in a more aggressive pace that would entail a quarter-point cut in November but back to a half-point move in December, according to the CME Group’s FedWatch gauge.
Bank of America economist Aditya Bhave noted a change in the Fed’s post-meeting statement that included a reference to seeking “maximum employment,” a mention he took to indicate that the central bank is ready to stay aggressive if the jobs picture continues to deteriorate.
That also means the recalibration could get tricky.
“We think the Fed will end up front-loading rate cuts more than it has indicated,” Bhave said in a note. “The labor market is likely to remain tepid, and we think markets will push to do another super-sized cut in 4Q.”

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Officials in some countries started cutting rates last year, but others, including those in Europe and the United States, have taken a more cautious approach.Two years ago, central banks around the world were engaged in a battle against high inflation that resulted in an aggressive and synchronized jump in interest rates. Now, many policymakers are reversing course — but in a less coordinated way as price increases slow at different paces in various countries.Central bankers in some emerging markets began cutting rates last year. European officials started a slow and cautious easing of interest rates just a few months ago. The biggest outlier had been the Federal Reserve, which had kept rates high for more than a year and throughout the summer. On Wednesday, it joined the crowd and cut rates — in a big way — for the first time since the early days of the pandemic.“A few months ago, we were still in the space of American exceptionalism,” said Katharine Neiss, an economist at PGIM Fixed Income, an asset manager. There was the expectation that the resilience of the U.S. economy would lead to higher rates for longer, she said. “That was creating a lot of stresses and strains for the rest of the world,” she added.If the Fed’s rate cut on Wednesday can ensure a so-called soft landing for the U.S. economy, where inflation is brought down without a severe recession, then that is “really good news for the rest of the world,” Ms. Neiss said. It also eases global financial conditions and reduces pressure on currencies that were taking a hit from the dollar’s strength.Now, the dominant theme around the world is central banks lowering interest rates as inflation slows, falling within sight of their targets, and economic growth weakens. Still, policymakers have been cautious about moving too quickly and reigniting inflationary pressures.The Bank of Canada has cut rates three times since June. Last week, the European Central Bank cut interest rates for the second time in three months. The Bank of England held rates steady on Thursday after cutting just once last month.Central banks in Norway and Sweden are also expected to hold rates at their meetings later in September, emphasizing their gradual approach. Among emerging markets, the South African central bank cut rates for the first time in four years on Thursday.Still, there are global outliers. Japan belatedly responded to rising inflation by raising rates in July. Investors suggest that the Bank of Japan is more likely to raise rates again in the near future. Nigeria has been raising rates this year as inflation has jumped and, late on Wednesday, Brazil’s central bank raised rates amid concerns that faster economic growth could be inflationary. More

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FRANKFURT (Reuters) -A big interest rate cut from the U.S. Federal Reserve on Wednesday raised bets on further policy easing at the European Central Bank in October but this is still not the most likely outcome given different economic realities.The ECB has already cut interest rates in June and earlier this month, and many at the bank have hinted at steady, quarterly rate cuts ahead to make sure inflation is defeated on a durable basis. While the Fed’s apparent rush lends some support to arguments that the ECB is falling behind the curve given rising recession risks, the fundamental economics have not changed overnight, so policy hawks on the Governing Council can make an argument for waiting until December. “That the ECB needs to cut in October because of what the Fed did is a ridiculous argument that wouldn’t fly on the Governing Council,” Dirk Schumacher, an economist at Natixis, said.”The only way to argue that is to say that it (the Fed cut) will change euro zone data and that may be the case but we haven’t seen it yet.”This is also reflected in market pricing, which now sees a 35% chance of a 25 basis point deposit rate cut in October, up from 30% a day ago, a small but still notable shift that leaves December as the most likely date for an ECB move. The ECB is likely to take it slower because it has a lot less to do. It has five, maybe six 25-basis-point cuts until it reaches a “neutral” interest rate level at around 2.0% or 2.25%, according to various estimates that include the ECB’s own.The Fed meanwhile has probably eight such reductions until then, so the world’s top two central banks might still reach their end point of policy easing at the same time. Then there are the fundamentals.Euro zone inflation, now at 2.2%, could tick up towards 2.5% by the end of the year and will likely come down only slowly to 2% by the final weeks of 2025 as entrenched wage pressures push up services costs. This is why conservative policymakers, or hawks in market jargon, have cautioned against moving too fast.Slovakia’s Peter Kazimir has already pushed back on October while influential rate setters Isabel Schnabel and Klaas Knot have both in the past made the arguments that quarterly moves to coincide with fresh projections made sense. “Inflation is currently not where we want it to be,” Bundesbank chief Joachim Nagel said on Wednesday.Conservatives, who drove a record string of rate hikes in 2022 and 2023 are still likely to be in a majority and that is why markets are not repricing ECB moves after the Fed decision.”Ultimately, the louder hawks should keep markets reluctant to price in more ECB easing, despite the Fed’s dovish influence,” ING’s Francesco Pesole said. Hawks argue that wage growth remains too quick for comfort.Labour costs rose by 4.7% in the second quarter, well above the 3% considered consistent with the ECB’s inflation target, and unions continue to demand big wage hikes to compensate for real income losses.The ECB also gets only few pieces of really relevant data in the four weeks until its Oct. 17 meeting.Wage and growth figures only come in the lead up to December, when new projections are also published. This leaves the ECB with second tier figures, such as survey data on lending and corporate intentions, to go by. These softer indicators would then have to show a big deterioration for policymakers to preempt their own projections with a rate cut. DOVES Still, policy doves, mostly from southern Europe, keep making the case for quicker policy easing. Mario Centeno, Portugal’s central bank chief and the most outspoken policy dove, argues that the growth outlook is deteriorating so quickly that the ECB could undershoot its inflation target unless it moves fast. “Given the position in which we are today, in the monetary policy cycle, we have really to minimize the risk of undershooting, because that’s the main risk,” Centeno told Politico.Doves argue that growth is faltering, industry is in recession, consumption is weak and people are boosting their savings, perhaps out of fear of an economic downturn. These factors are all deflationary and create downside risks for price growth.They also say that inflation will fall to target in September and, even if there is an uptick in the months ahead, the spectre of rampant inflation has been defeated, especially because energy prices remain muted. More