EUROZONE
Recovery gains pace
The eurozone’s economic recovery unexpectedly gathered pace this month as the bloc’s dominant services industry saw its already buoyant demand rise, more than offsetting a deepening downturn in manufacturing, surveys showed. Hamburg Commercial Bank’s flash composite purchasing managers’ index (PMI), compiled by S&P Global, jumped to an 11-month high of 54.4 this month from last month’s 53.7. That was well above the 50 mark separating growth from contraction, and matched the highest forecast in a Reuters poll that predicted no change from last month. A PMI covering the services industry soared to 56.6 this month from 55.0, confounding expectations in a Reuters poll for a decline to 54.5. Despite high living costs in the eurozone, demand for services improved as consumers continued to spend. The new business index rose to a one-year high of 55.8 from 54.2.
JAPAN
Inflation outpaces forecast
Japanese inflation continued to outpace expectations, adding to intense scrutiny over next week’s Bank of Japan policy meeting, the first under new governor Kazuo Ueda. Consumer prices excluding fresh food rose 3.1 percent last month from a year earlier, matching February’s pace, the Ministry of Internal Affairs and Communications said yesterday. Economists had expected inflation to ease to 3 percent. A separate gauge of price growth that excludes energy and fresh food also proved stronger than expected, climbing to 3.8 percent for its highest reading since 1981. The figure, considered an indicator of underlying price trends, appeared to show unexpected stickiness, even if the margins look relatively small in comparison with other major economies. Forecasting inflation to fall below 2 percent later this year, the bank has said its ultra-easy monetary policy is still appropriate as its inflation target has not been achieved in a sustainable way.
MEDIA
BuzzFeed News shuts down
Pulitzer Prize-winning online media outlet BuzzFeed News is being shut down as part of a cost-cutting drive by its corporate parent, which is shedding about 15 percent of its staff in addition to earlier layoffs. In addition to the news division, layoffs would hit its business, content, tech and administrative teams, Buzzfeed Inc cofounder and CEO Jonah Peretti said in a memo to staff on Thursday. BuzzFeed is also considering making job cuts in international markets. It has about 1,200 total employees, a regulatory filing showed. Peretti said he “made the decision to overinvest” in the news division, but failed to see that the financial support to sustain operations was not there.
AUTOMAKERS
Mercedes profits rise
Mercedes-Benz on Thursday said its operating profit had risen slightly in the first three months of the year, as it was able to shake off high inflation. The German auto group said it recorded an operating profit of 5.5 billion euros (US$6.03 billion), up from 5.2 billion euros in the same period last year. Higher price tags for the group’s vehicles were able to “overcompensate for the negative effects from higher material costs” amid soaring inflation, Mercedes finance chief Harald Wilhelm said in a statement. The improvement came from the strong performance of the automaker’s vans division, as well as “solid growth rates” in sales of electric vehicles and top-end vehicles, Mercedes said. Sales of battery-powered vehicles “almost doubled” in the first quarter to 51,600 units, representing 10 percent of the group’s overall sales.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
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