TOKYO (Reuters) – Japanese wholesale prices fell 0.8% in September from the same month a year earlier, data showed on Monday, marking the seventh straight month of year-on-year declines and heightening the risk the country will slide back into deflation.

Squeezed mostly by soft global demand for commodities and Japanese machinery goods, the weakness in wholesale prices highlights the challenge Tokyo faces in cushioning the impact of the coronavirus pandemic on the world’s third-largest economy.

The 0.8% fall in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, was bigger than a median market forecast for a 0.5% drop. It followed August’s 0.6% year-on-year decrease.

Wholesale prices also slid 0.1% in September from August, marking the first on-month drop in four months, the data released by the Bank of Japan (BOJ) showed.

“With the global economy still reeling from the pandemic’s pain, the pace of its recovery remains modest. That will weigh on Japan’s wholesale inflation,” a BOJ official told a briefing.

The drop in wholesale prices adds to headaches for the BOJ, which frets that sluggish consumption, particularly for services, will push consumer inflation further away from its 2% target.

Core consumer prices – the BOJ’s key inflation measurement – fell 0.4% in August from a year earlier, marking their fastest year-on-year drop in almost four years.

The slew of soft price data may increase the chance the BOJ will cut its inflation forecasts at this month’s rate review, when it also conducts a quarterly review of its projections.

Japan suffered its biggest economic slump on record in the second quarter as the pandemic crippled demand. Analysts expect any rebound to remain modest as fears of a second wave of infections weigh on consumption.

(Reporting by Leika Kihara; Editing

By Sinead Cruise

LONDON, Oct 8 (Reuters)HSBC HSBA.L shareholders face a future of paltry payouts when regulators restore its powers to pay dividends as the bank’s bosses press on with a costly revamp against a backdrop of a global recession and the threat of negative interest rates.

One of the banking sector’s most reliable dividends could be slashed by as much as 50%, analysts and investors say, with HSBC’s management expected to use the economic uncertainty to downgrade shareholder expectations.

Chief Executive Noel Quinn also faces pressure to keep lending to struggling households and businesses while keeping capital in reserve to pay for the bank’s overhaul and cover any bad debts if non-performing loans spike.

In August, Europe’s biggest bank by assets, warned that its bad debt charges for the year could hit $13 billion as the coronavirus pandemic hammered both its retail and corporate customers worldwide.

“Certainly in this climate it gives them a chance to reset,” said Hugh Young, managing director, Asia Pacific, Aberdeen Standard Investments, one of HSBC’s 10 largest shareholders. “They can blame, with a degree of reason, both COVID and government.”

HSBC declined to comment.

The bank, which derives the majority of its profits from Asia, has not paid an annual dividend below 35 cents since 2009.

Between 2008 and 2018, it paid an average 47.2 cents but analyst forecasts supplied by Refinitiv suggest its annual dividend will plunge to 15 cents in 2020, before recovering to 29 cents in 2021 and 37 cents in 2022.

Will Howlett, equity research analyst at HSBC shareholder Quilter Cheviot, said earnings and cash flow for banks would remain under pressure until at least 2023, when the U.S. Federal Reserve signalled it might be ready to raise rates.

“We see this as a longer lasting headwind

Like many energy companies across the world, the state-controlled firm has also been hit by the coronavirus pandemic. Photo: Budrul Chukrut/SOPA/LightRocket via Getty
Like many energy companies across the world, the state-controlled firm has also been hit by the coronavirus pandemic. Photo: Budrul Chukrut/SOPA/LightRocket via Getty

Norwegian gas and oil company, Equinor (EQNR) has announced its slashing 30% of the workforce in its exploration unit, to increase efficiency and reduce cost.

Equinor did not give an exact number but said “hundreds of jobs” will be affected worldwide, by the end of 2022.

Spokesman Erik Haaland told Yahoo Finance, that the company plans to reduce the UK exploration staff by around 60%. He said that a process had been “initiated to increase efficiency and reduce cost in the UK exploration team”, which is mainly based in London.

But, the reductions will not have an immediate impact on exploration plans, Haaland said in an email.

“For 2020 we expect to drill around 30-40 wells globally, and this announcement does not affect the planned activity level for 2020 and 2021.”

Equinor’s exploration spending has decreased by about a third from six to seven years ago. The firm said that it plans to focus on selected areas when searching for new gas and oil resources, including in the US, Brazil and Norway.

Previously, Equinor said it was planning to spend $1.1bn (£853m) on exploration this year, whereas in February it expected to spend $1.4bn.

READ MORE: Oil prices fall as COVID-19 cases spike

In August, Equinor confirmed it was making job cuts in the UK, Canada and US in response to the oil downturn.

Meanwhile, the majority state-controlled firm said it will keep production going after dozens of its staff went on strike at the company’s Johan Sverdrup oilfield, largest in western Europe.

Following the company’s announcement, Norway’s Lederne labour union vowed to escalate its offshore industrial action to four other Equinor fields next week.

Like many

The Friday Market Minute

  • Global stocks slide, while Wall Street future slump, after President Donald Trump and First Lady Melania test positive for COVID-19.
  • Trump says he’ll begin immediate quarantine, putting election campaigning, the upcoming debates and the health of his colleagues in question.
  • Congressional lawmakers pass a $2.2 trillion coronavirus stimulus bill, largely down party lines, while Senate Republicans stick to their prescribed limits on spending.
  • Eurozone deflation deepens amid the broader economic malaise, with core consumer prices pegged at -0.4% for the month of September.
  • Oil extends slump as the dollar gains and questions over the pace of demand, amid rising U.S. inventories, continues to hit crude.
  • U.S. equity futures suggest a weaker open on Wall Street after data shows U.S. employers added fewer new jobs in September.

U.S. equity futures slump lower Friday following news that President Donald Trump and First Lady Melania have both tested positive for the coronavirus, kicking markets into a tailspin ahead of key September jobs reports.

The President, who is 74 years old, Tweeted news of the positive test at around 1:00 am Eastern time Friday, and said the pair will immediately begin quarantine in the official residence of the White House. 

Reports suggest the infection may have come from his top adviser, Hope Hicks, who has also taken ill from the virus that has affected more than 7 million Americans and taken the lives of more than 200,000.

Vice President Mike Pence said his last regular coronavirus test was deemed negative. 

News of the positive test — and its myriad implications for the President, his cabinet, the Supreme Court nomination process and the broader election campaign — pushed markets quickly and sharply lower in overnight trading, and offset any positive momentum from the passage of the Democratically-controlled House’s $2.2 trillion coronavirus

FRANKFURT, Germany (AP) — Annual inflation in the 19-country eurozone sagged further below zero in September, bolstering expectations that the European Central Bank will add to its emergency stimulus efforts aimed at cushioning the impact of the pandemic on the economy.

The consumer price index was down 0.3% in September, even lower than the minus 0.2% figure in August, according to new figures released Friday by the European Union statistics agency.

Excluding volatile food and fuel prices, the inflation rate was 0.2% in September, down from 0.4% in August. The so-called core inflation figure is often considered the better measure of price movements in the economy as a whole.


Low inflation is a major reason why analysts predict the ECB will add to its 1.35 trillion-euro ($1.6 trillion) program of regular bond purchases, which push newly printed money into the financial system. The pandemic emergency purchases are credited with keeping borrowing costs down and preventing turmoil on financial markets that would have worsened the recession caused by the virus.

The ECB’s goal is to have annual inflation of just under 2%. Economists say the pandemic is contributing to low inflation as merchants keep prices down in hopes of attracting customers amid restrictions on travel and activity.

While low inflation can benefit consumers up to a point, weak prices over a period of time can be a sign of too much slack in the economy. Weak inflation can also make it harder for indebted countries in the eurozone to improve their competitiveness compared with the other members of the currency bloc.

The recent string of low inflation figures has been attributed to one-time factors such as the late start of summer sales in France and Italy affecting the prices of clothes and shoes. But it is also being attributed to businesses