More optimism from Japan

The Bank of Japan (BOJ) has said the Japanese economy has begun to stop deteriorating, but it has still kept interest rates unchanged at 0.1%.

The assessment was more optimistic than at last month's meeting, when it said the economy was continuing to worsen.

It made no change to policies such as buying corporate bonds, the current programme of which ends in September.

The improved view of the economy had been expected given the recent rises in factory output.

Conditions 'still terrible'

"We may be seeing a return to growth in Japan later this year so it is reasonable for the BOJ to upgrade its assessment now," said Shane Oliver, chief economist at AMP Capital Investors in Sydney.

"However, conditions are still terrible. Japan and other economies are still in the midst of a severe recession."

The key question is what will happen to the central bank's programme of buying bonds later in the year.

In common with many other central banks, the BOJ has been buying corporate bonds as part of a programme of quantitative easing, to get more money flowing through the economy.

"As for measures on credit markets, the issuance of corporate bonds is rising and the bank may start scaling back those steps if conditions allows after September," said Junko Nishioka, chief economist at RBS Securities in Tokyo.

But he warned that "although there has been some optimism on the economy after strong industrial output data, the BOJ is maintaining a very pessimistic view".

"It said the economy has begun to stop worsening, but it didn't say it has stopped worsening."

GM agrees Saab sale to Koenigsegg

General Motors has reached a tentative agreement to sell Saab to the Swedish sports car manufacturer Koenigsegg.

GM said that as part of the deal there would be $600m (£367m) of funding from the European Investment Bank (EIB), guaranteed by the Swedish government.

It is the latest part of GM's reorganisation, which is also set to see the Opel and Vauxhall brands going to Canada's Magna.

Saab filed for reorganisation under Swedish law on 20 February.

Koenigsegg produces 18 cars a year and employs 45 people, and there has been some doubt as to whether it has the expertise to run Saab, which sold 93,000 cars in 2008.

Saab employs about 3,400 people in Sweden and about 12,000 other jobs in the country are dependent on Saab and its suppliers.

But GM Europe's president Carl-Peter Forster said: "Koenigsegg Group's unique combination of innovation, entrepreneurial spirit and financial strength... made it the right choice for Saab as well as for General Motors

Kingfisher Airlines hikes fuel surcharge by Rs 400

Air carrier Kingfisher Airlines on Wednesday increased fuel surcharge by Rs 400 on all domestic sectors with immediate effect.

"Consequent upon successive increases in the price of ATF, the fuel surcharge for travel on all domestic sectors of Kingfisher Airlines will be increased by Rs 400 with effect from Wednesday," a Kingfisher Airlines spokesperson said.


The hike would apply uniformly for travel across all distances and all classes of travel including Kingfisher Red, the spokesperson said.


The increase in fuel surcharge comes following an over 12 per cent rise in ATF prices by state-run oil firms on 15th June.