Toyota Announces US Sales Freeze

Japanese car giant Toyota has said it will suspend US sales of eight models of cars, including its top selling Camry, amid a massive safety recall.

The unprecedented move comes a week after the company announced a recall of 2.3 million cars to fix potentially faulty accelerator pedals.

The recall was Toyota's second major alert in four months in the US, its biggest market.

The halt in sales announced on Tuesday means the world's number one carmaker will also freeze production on some models at its plants in the US and Canada.

The company has said it is also considering whether it needs to announce a recall on cars sold in Europe, where the same parts are used in millions of models already sold.

The problem could lead to accelerator pedals sticking in the depressed position, causing acceleration without warning.

Toyota recall: US models affected

Camry – model for years 2007 to present  RAV4 - 2009-2010 model  Corolla – 2009-2010 model  Matrix - 2009-2010 model  Sequoia - 2008-2010 model  Tundra - 2007-2010 model  Avalon - 2005-2010 model  Highlander – 2010 model

The recall is expected to cause major dent in Toyota's earnings, as well as the company's reputation for safety and quality.

It could also undermine its recovery from plunging automotive sales around the world caused by the financial crisis.

The automaker's shares fell 4.3 per cent in Tokyo trade Wednesday following the sales suspension announcement.
Toyota has already forecast a $3.9bn operating loss for the year to March, with a return to profit not expected until well into 2011 at the earliest.

Annual combined North American sales of the eight cars involved in the sales suspension and recall amount to more than one million units.

Bob Carter, Toyota's US vice president, said the company was taking the measures needed to ensure safety and restore confidence among Toyota customers.

"This action is necessary until a remedy is finalised," he said in a statement.

"We're making every effort to address this situation for our customers as quickly as possible."

Quoted from: Aljazeera.net

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Gold Slips Below $1,090/oz as Dollar Firms

26 January 2010

LONDON - Gold prices slipped below $1,090 an ounce in Europe on Tuesday as China’s implementation of a clampdown on lending lifted the dollar versus the euro, undermining bullion’s appeal as an alternative asset. Higher-yielding and commodity-related currencies are sensitive to any hints that China may be putting the brakes on its economy. Spot gold was bid at $1,089.15 an ounce at 1210 GMT, against $1,097.95 late in New York on Monday. U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange fell $6.50 to $1,089.20 an ounce. “It looks as though gold has found some support here, but I wouldn’t be surprised to see more weakness,” said Standard Chartered analyst Daniel Smith. “A lot will be determined by the outlook for the dollar, so clearly the U.S. GDP number on Friday will be very important for that,” he added. “If it is stronger than expected, the dollar will strengthen and gold will suffer.” The outcome of the Federal Reserve’s meeting on interest rates, due to conclude on Thursday, will also be key for the U.S. currency, he said. The Fed is not expected to indicate a benchmark rate hike is imminent. Gold prices fell along with the euro on Tuesday as risk aversion increased, while equities also slipped. China’s central bank told banks that need to raise reserve ratios to implement the change on Tuesday, banking sources said. In addition, Standard & Poor’s cut its rating outlook on Japan, hitting investor confidence about global economic recovery. European shares fell for a fifth day, while stock futures pointed to a lower opening on Wall Street. Commodities pressured Gold might typically be expected to benefit at times of rising risk aversion as investors buy the metal as a haven, as happened a year ago while the financial crisis raged. However, if risk aversion is rising but still manageable, the benefits to the dollar — strength in which weighs on gold — generally puts gold prices under pressure. “(Gold’s) risk-averse qualities were hardly noticeable during the latest sell-off in equities, with bullion trading against the dollar as anything else in your average commodity basket,” said VTB Capital analyst Andrey Kryuchenkov in a note. Among other commodities, oil fell more than 1 percent, and industrial metals like copper and aluminium also fell. The asset class is suffering from fears tighter Chinese monetary policy may curb investment flows into commodities. On the supply side, the chief executive of Harmony Gold Mining, the world’s fifth-largest gold producer, sees spot gold prices flat for the next 12 months. He added the company was reviewing further operations based on the gold price versus costs after closing four shafts, and the company’s electricity bill could triple in four years if power utility Eskom’s tariff request is granted. Silver fell to a 2010 low of $16.74, tracking losses in gold, and was later at $16.78 an ounce versus $17.12. Platinum was at $1,517 an ounce versus $1,546.50, and palladium at $426.50 an ounce versus $441. Buyers cashed in on gains in palladium, the best performer of the precious metals so far this year, analysts said. However, “investors may view the correction as a further dip buying opportunity”, said TheBullionDesk.com analyst James Moore. Quoted from: Khaleejtimes.com

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Yen Gains as China Implements Reserve Ratio Hike

26 January 2010

LONDON - The yen rose sharply on Tuesday after China’s implementation of rises in some banks’ reserve ratios cut risk appetite and underlined concerns that monetary tightening may slow the country’s economic growth. The dollar fell against the yen but rose against most other currencies after the China news raised the prospect of further tightening. Sterling tumbled against the dollar after data showed Britain only just emerged from recession at the end of 2009, suggesting any UK monetary tightening was still a lomg way off. China’s move sparked selling in positions funded by the low-yielding yen, which hit a nine-month high against the euro, even as ratings agency Standard and Poor’s cut its outlook on Japanese sovereign debt to negative from stable. China’s central bank ordered banks that need to raise their reserve ratios to implement the change on Tuesday, banking sources said, prompting falls in equities.. Analysts said the change, flagged by Chinese officials last week, underlined the market’s low tolerance for risk. “Risk aversion is in vogue right now. The market is still quite skittish about equities, which is coming through and helping the yen,” said HSBC director of currency strategy Paul Mackel. By 1220 GMT, the euro was down more than 1 percent against the Japanese currency at 126.14, yen off an earlier nine-month low of 125.96 yen after Japanese deputy finance minister Yoshihiko Noda pledged fiscal discipline following the S&P announcement. Finance Minister Naoto Kan echoed those comments, saying Japan must show it has a roadmap to restore fiscal health. The yen initially trimmed gains after the S&P announcement, which came in early European trade, but quickly recovered as analysts shrugged off the news on the view that only a small proportion of Japanese government bonds are held offshore. “It would be a very different story if a lot of foreigners held JGBs. It is another reminder that the fiscal side of the story continues to rot in many of the developed economies and I think that’s at the forefront of investors’ minds right now.” Mackel said. The dollar was trading at 89.62 yen, down 0.7 percent, after falling to a one-month low at 89.39 after Noda’s remarks, having earlier traded as high as 90.55 yen. The euro was down 0.5 percent versus the dollar at $1.4075, despite a German survey showing a bigger-than-expected rise, with the Ifo business climate at 95.8 in January, up from 94.7 in December. Quoted from: Khaleejtimes.com

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Oil Drops Towards $74 on China Banks; Eyes Inventories

26 January 2010

LONDON - Oil fell towards $74 a barrel on Tuesday after China implemented a clampdown on lending, rekindling concern that tightening moves by the world’s second-largest oil user may limit demand. Crude approached a one-month low after the Chinese move, which analysts said was a setback for the bullish view in oil markets that puts the prospect of rising Asian demand ahead of the market’s weak current fundamentals. “The fundamental link to current prices is weak — hence oil prices need at least some general optimism that boom times are around the corner,” said Olivier Jakob, analyst at Petromatrix. “That general optimism depends a lot on China’s consumption, saving the rest of the world and that will be somewhat challenged by the Chinese government trying to regulate the formation of bubbles.” U.S. oil was down 76 cents at $74.50 by 1206 GMT, having traded as low as $74.14. On Friday, it touched a one-month intraday low of $74.01. Brent crude fell 65 cents to $73.04. Crude oil futures have fallen by more than 6 percent in January, set for their first monthly decline since July 2009. China implemented its planned increase in required reserves for some banks on Tuesday, sources told Reuters. Asian stocks fell, copper slipped and the dollar gained. European shares lost ground. “The Chinese tightening is making people concerned that it is going to damp down demand, but it won’t damp demand by very much,” said Christopher Bellew, a broker at Bache Commodities. “The market may be forming a base around these numbers, I think.” Recovery jitters Highlighting fears that a global recovery may be sputtering, South Korea reported weaker-than-expected growth in the fourth quarter. Britain came out of recession in the fourth quarter, but with a lower growth rate than expected. Standard & Poor’s cut its rating outlook on Japan. Economic reports this week have also raised doubts over the strength of the U.S. recovery. The Federal Reserve is not expected to indicate that it will raise its benchmark rate any time soon when it meets this week. The Federal Open Market Committee (FOMC), the Fed’s policy-setting group, begins a two-day policy meeting on Tuesday. Oil inventories in the United States, the top oil consumer, are expected to rise further in reports due this week. Crude stocks probably rose by 1.7 million barrels, a Reuters poll of analysts showed on Monday. The survey also forecasts gasoline stockpiles probably climbed 1.4 million barrels and distillates, which include heating oil and diesel, were predicted to have fallen 1.4 million barrels. Industry group American Petroleum Institute issues its weekly inventory report on Tuesday at 2130 GMT. The government’s Energy Information Administration (EIA) follows on Wednesday. Quoted from: Khaleejtimes.com

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