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Tokyo stocks open higher tracking US gains

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Investors are looking ahead to a critical release Tuesday on US consumer prices, followed by Thursday's report on retail sales
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Tokyo stocks opened higher on Tuesday, tracking gains on Wall Street, as investors priced in the expectation of further interest rate hikes to tame inflation.

The benchmark Nikkei 225 index was up 0.14 percent, or 40.60 points, at 28,582.71 in early trade, while the broader Topix index was up 0.15 percent, or 2.96 points, at 1,983.18.

“Investors felt encouraged to buy Japan stocks by rallies in the US market, but a wait-and-see attitude may emerge in later trade ahead of the release of the US consumer price index,” Mizuho Securities said in a commentary. 

Wall Street stocks ended with solid gains, continuing an upswing that snapped a three-week losing streak.

Investors are looking ahead to a critical release Tuesday on US consumer prices, followed by Thursday’s report on retail sales — the last major data ahead of the Federal Reserve’s interest rate move next week.

While inflation is expected to have eased in August, largely due to falling gasoline prices, it seems unlikely it will be enough to stave off a third consecutive three-quarter point rate hike from the Fed.

However, National Australia Bank analyst Tapas Strickland believes that “there appears to be a growing consensus that inflation has peaked in the US”.

The dollar fetched 142.62 yen in early Asian trade, against 142.82 yen in New York late Monday.

Among individual equities, game giant Nintendo soared 5.11 percent to 61,970 yen after it said domestic sales of its Splatoon 3 game for Nintendo Switch consoles surpassed 3.45 million in the three days since its September 9 launch.

That marks the best domestic sales level for any Switch software in the three days after launch, Nintendo said.

Sony Group barely moved after it said its music business has fully withdrawn from Russia, trading up just 0.04 percent at 10,765 yen about 40 minutes after the opening bell.

“As the war continues to have a devastating humanitarian impact in Ukraine, and sanctions on Russia continue to increase, we can no longer maintain a presence in Russia, effective immediately,” the company said in a statement sent to AFP.

Automaker Nissan was down 1.34 percent at 545.5 yen after it said Monday night that it would extend by three months a halt to production at its Saint Petersburg plant in Russia.

The decision means production will be on hold until the end of December, with the firm citing ongoing logistical difficulties for the move.

Airlines continued to rally following reports the Japanese government could significantly loosen Covid-linked border controls, with ANA Holdings trading up 2.83 percent at 2,778.5 and Japan Airlines up 2.04 percent at 2,653 yen.

Toyota was down 0.82 percent at 2,053 yen and Honda was off 2.02 percent at 3,639 yen, after a brokerage firm downgraded its estimate of the shares’ performances.

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UK eyes big TikTok fine over child privacy lapse

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A UK regulator said TikTok ay have processed the data of children under the age of 13 without appropriate parental consent
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Britain on Monday warned it could fine TikTok £27 million ($29 million) over a potential failure to protect children’s privacy on the Chinese-owned video app.

The Information Commissioner’s Office said the social media company “may have processed the data of children under the age of 13 without appropriate parental consent”.

The ICO also found that the short-form video platform may have “failed to provide proper information to its users in a concise, transparent and easily understood way”.

The watchdog has served the group with a notice of intent — which is a legal document that precedes a possible fine — over the possible breach of UK data protection law.

“We all want children to be able to learn and experience the digital world, but with proper data privacy protections,” said Information Commissioner John Edwards.

“Companies providing digital services have a legal duty to put those protections in place, but our provisional view is that TikTok fell short of meeting that requirement.”

In response, TikTok said it disagreed with the ICO’s provisional views and stressed that no final conclusions had been reached.

“While we respect the ICO’s role in safeguarding privacy in the UK, we disagree with the preliminary views expressed and intend to formally respond to the ICO in due course,” TikTok said in a statement.

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Apple to make iPhone 14 in India in shift away from China

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The Apple logo at a store in New York
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Apple will manufacture its new flagship smartphone in India, the US tech giant said Monday, as it seeks to diversify production away from a dependence on China.

The iPhone supply chain is based mainly in China but the country’s zero-Covid policies and tensions with the United States have hurt production, analysts say.

“We’re excited to be manufacturing iPhone 14 in India,” Apple said in a brief statement.

The California-based firm already makes older iPhone models in India via Taiwanese manufacturers such as Foxconn, which has a factory in the southern state of Tamil Nadu.

The latest announcement comes just weeks after Apple launched new smartphones. The tech behemoth is commencing production of the iPhone 14 in India much earlier than it did for previous models, Canalys analyst Sanyam Chaurasia said.

“Over the last couple of years, it has been increasingly diversifying its supply chain to India,” Chaurasia told AFP.

About 7.5 million iPhones — around three percent of Apple’s global production — were made in India last year, the analyst added.

“We expect that the local production of iPhones could reach more than 11 million this year,” he said.

Apple’s announcement will be a boost to Prime Minister Narendra Modi’s “Make in India” strategy under which he has urged foreign businesses to manufacture goods in the South Asian nation.

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US charges Boeing with misleading investors on 737 MAX safety, fined $200 mn

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US regulators say Boeing and its former CEO 'put profits over people,' misleading the public about the safety of the 737 MAX aircraft
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US securities officials fined Boeing $200 million over the aviation giant’s misleading assurances about the safety of the 737 MAX airplane following two deadly crashes, regulators announced Thursday.

Boeing agreed to the penalty to settle charges it “negligently violated the antifraud provisions” of US securities laws, the Securities and Exchange Commission said in a statement, saying the company and its leader “put profits over people.”

Boeing’s former chief executive, Dennis Muilenburg, also agreed to pay $1 million to settle the same charges in the civil case.

The settlement marks the latest hit to Boeing over the MAX following the Lion Air Crash in Indonesia in October 2018 and the Ethiopian Airlines crash in Ethiopia in March 2019, which together claimed nearly 350 lives. 

One month after the first crash, a Boeing press release approved by Muilenburg “selectively highlighted certain facts,” implying pilot error and poor aircraft maintenance contributed to the crash.

The press release also attested to the aircraft’s safety, not disclosing that Boeing knew a key flight handling system, the Maneuvering Characteristics Augmentation System (MCAS), posed safety issues and was being redesigned.

After the second crash, Boeing and Muilenburg assured the public that there was “no surprise or gap” in the federal certification of the MAX despite being aware of contrary information, the SEC said.

– Boeing ‘failed’ –

“In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair, and truthful disclosures to the markets,” said SEC Chair Gary Gensler in a press release. 

“The Boeing Company and its former CEO, Dennis Muilenburg, failed in this most basic obligation. They misled investors by providing assurances about the safety of the 737 MAX, despite knowing about serious safety concerns.”

The SEC said both Boeing and Muilenburg, in agreeing to pay the penalties, did not admit or deny the agency’s findings.

Boeing said the agreement “fully resolves” the SEC’s inquiry and is part of the company’s “broader effort to responsibly resolve outstanding legal matters related to the 737 MAX accidents in a manner that serves the best interests of our shareholders, employees, and other stakeholders,” a company spokesman said.

“We will never forget those lost on Lion Air Flight 610 and Ethiopian Airlines Flight 302, and we have made broad and deep changes across our company in response to those accidents.”

US air safety authorities cleared Boeing’s 737 MAX to resume service in November 2020 following a 20-month grounding after the crashes.

A principal cause of the two crashes was identified as the MCAS, which was supposed to keep the plane from stalling as it ascended but instead forced the nose of the plane downward. The Federal Aviation Administration required Boeing to upgrade this system to address the flaw.

In January 2021, Boeing agreed to pay $2.5 billion to settle a US criminal charge over claims the company defrauded regulators overseeing the 737 MAX.

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