11/10 Galaxy News: Sony To Invest $500 Million In TSMC’s New Japanese Chip Plant Venture; SoftBank Shares Jump 11% On $9 Billion Buyback

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1. SoftBank Shares Jump 11% On $9 Billion Buyback

Reuters reported that SoftBank Group Corp shares jumped 10.5% on Tuesday, the first trading session after the Japanese conglomerate said it would spend up to 1 trillion yen ($8.8 billion) buying back almost 15% of its shares. The company announced the buyback, long speculated about by the market, after it revealed its quarterly earnings crashed to a loss amid a decline in the share prices of its portfolio companies and a regulatory crackdown in Communist China.

The buyback is SoftBank’s second largest after a record 2.5 trillion yen buyback launched during the depths of the CCP Virus pandemic last year. Shares of the tech group quadrupled during that buyback, but have since fallen 40% from a peak in May.  SoftBank owns about a quarter of Alibaba’s shares. The slide in the Chinese e-commerce giant’s shares and the broader regulatory backlash in China contributed to a $57 billion fall in SoftBank’s net assets to $187 billion, a metric that Chief Executive Masayoshi Son has said is the primary measure of SoftBank’s success. The repurchase period for the latest buyback runs to Nov. 8 next year, with the group signalling the programme could take longer than the fast-paced purchases last year.

2. LDP and Komeito Agree on 100,000 Yen Worth of Benefits for Ages 18 and Under

The Liberal Democratic Party (LDP) and the New Komeito Party have agreed to provide 100,000 yen worth of benefits in cash and coupons to those under 18 years old to help those affected by the CCP Virus, NHK reported Tuesday. On the other hand, the Liberal Democratic Party reiterated its demand to set an income limit of 9.6 million yen per year, and the two parties will continue to discuss the issue.

With regard to the 100,000 yen worth of benefits for those under 18 years of age, which the Komei Party has been advocating, it was agreed that 50,000 yen will be given in cash by the end of this year and 50,000 yen worth of coupons will be distributed around the spring of next year, with the use of the coupons limited to expenditures related to child rearing. Regarding the granting of new points to the My Number Card, which the Komei Party had insisted on, it was confirmed that the points would be granted in multiple installments depending on the stage of the process, such as when the card is obtained or when the card starts being used as a health insurance card, and the amount will continue to be adjusted.

3. Trucking Association Asks Government to Take Action Against Rising Price of Diesel Fuel

As the price of crude oil continues to remain high, a group of shipping companies met with Minister of Land, Infrastructure, Transport and Tourism Mr. Saito and requested that the government urge consigners to properly reflect the increase in the price of diesel oil, which is used as fuel for trucks, in their freight rates.

According to the Japan Petroleum Information Center, the retail price of diesel fuel as of the first of this month was 148.5 yen per liter on average nationwide, the highest level in 13 years and one month, due to the persistently high price of crude oil. They call for the creation of a subsidy system to alleviate the burden, and for further discounts on expressway tolls. They are also requesting the government to resume the temporary suspension of taxation on fuel when fuel prices rise, which is currently frozen.

4. Banks and Credit Unions Increase Loan Balance for Second Consecutive Month;  Continuing High Level of Loans to Small and Medium-Sized Enterprises

NHK reported on 9th that the total amount of loans outstanding at banks and credit unions increased for the second consecutive month to more than 577 trillion yen last month. The increase was due to an increase in the balance at regional banks, which lend mostly to small and medium-sized businesses, and the level remains high. According to the “Trends in Lending and Deposits” released by the Bank of Japan, the balance of loans extended to corporations and individuals by banks and credit unions nationwide averaged 577,857.9 billion yen during the last month, up for the second consecutive month from the previous month. Among these, the outstanding balance at city banks fell 0.6% from the same month of the previous year, as large corporations with solid business performance are increasingly repaying their loans.

On the other hand, local banks, which lend mostly to small and medium-sized enterprises (SMEs), saw their outstanding balances increase by 2.1% from the same month of the previous year. Although the situation of the pandemic has calmed down, outstanding loans to SMEs remain at a high level.

5. CCP Virus Disaster Increases Long-Term Unemployment by 180,000 over a Year, with Some Signs of Improvement in the near Future

Asahi News reported a survey by the Ministry of Internal Affairs and Communications which shows that the number of long-term unemployed people looking for work but unable to find one for more than a year was 660,000 in the July-September period, up 180,000 from the same period last year, possibly due to the CCP Virus pandemic. In October, the state of emergency was lifted and there is a growing trend to resume business activities, but it remains to be seen whether this will be accompanied by an improvement in employment.

In the July-September period, the long-term unemployed accounted for 34.6% of the total unemployed, the highest percentage under the pandemic. However, some companies are now stepping up their hiring. According to En Japan, a human resource service company, the number of job openings in October was 99.7% of the level in 2019, almost the same level as the year before the pandemic. There is a strong appetite for hiring in the food and beverage industry, which is about to resume operations, as well as in the logistics, IT and consulting industries.

6. Sony to Invest $500 Million in TSMC’s New Japanese Chip Plant Venture

Reuters: Sony Group said on Tuesday it would invest about $500 million in a joint venture with Taiwan Semiconductor Manufacturing Co (TSMC) that will build a $7 billion chip plant in Japan. Construction of the factory, which local media said last month would supply semiconductors to Sony’s image sensor business, will begin in 2022, with production slated to begin at the end of 2024, the companies said in a press release.

The decision marks a success for Japanese industry ministry officials, who want world No.1 contract chipmaker TSMC to build plants to supply chips to Japan’s electronic device makers and auto companies as trade frictions between the United States and Communist China threaten to disrupt supply chains and demand for the key component grows. The company has pledged to spend $100 billion over the next three years to expand chip capacity and is building a $12 billion chip fabrication plant in the U.S. state of Arizona.

【Himalaya Japan Galaxy- Alpha Planet】
Translator: Seentiz Homma (帆間知津)
Proofreading: π&π

Disclaimer: This article only represents the author’s view. Gnews is not responsible for any legal risks.

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