Morning business round-up: ECB poised for key meeting


What made the business news in Asia and Europe this morning? Here's our daily business round-up:

All eyes are on the European Central Bank (ECB) as it holds its latest meeting amid much speculation that it will take action to bring down Spain's cost of borrowing.

Last week, ECB president Mario Draghi said he was ready to do "whatever it takes" to support the euro, prompting a rally in shares and the single currency.

Fears that Spain will need a bailout have prompted speculation that the ECB will take unprecedented steps to help.

David Llewellyn, vice chairman of the Banking Stakeholder Group at the European Banking Authority, said: "Expectations are very high, the markets recognise that past measures simply haven't worked.

"Above all if nothing is done to lower and stabilise the borrowing costs of countries like Spain and Italy then their future within the euro must be in question."

Aside from the ECB, the main news has come from a string of company announcements.

In Japan, Sharp Corporation, the maker of Aquos TVs, has said it will cut 5,000 jobs, just under 10% of its workforce, in an attempt to cut costs.

The cuts come as Sharp reported a net loss of 138.4bn yen ($1.8bn; £1.1bn) for the April to June period.

Media caption,
Biz Heads

That was up from a 49.3bn yen loss during the same period a year earlier.

Sharp said that a "greater-than-expected" slowdown in demand from Japan and China, and falling prices had hurt its earnings.

Electronics maker Sony has cut its annual profit forecast after its first quarter loss widened.

The firm reported a net loss of 24.6bn yen ($314m; £202m) for the April to June period, compared with a loss of 15.5bn yen a year earlier.

It also cut its forecast for net income for the year to 31 March 2013 to 20bn yen, down from a projection of 30bn yen in May.

Sony has been hurt by slowing demand for TVs and a strengthening yen.

Japan Airlines has said its first-quarter profits more than doubled as it cut costs and the strong yen boosted demand for international travel.

Net profit was 26.9bn yen ($343m; £220m) in the April-to-June period, up from 12.7bn yen a year earlier.

The airline said that revenues at both its international and domestic routes had increased during the period.

Toyota - Japan's largest carmaker - has said it will recall 859,000 units of its RAV4 sports utility vehicle and 19,000 units of the Lexus HS 250h car in the US and Canada to fix a problem with the rear suspension arm.

It said the arm could rust and separate if the suspension nuts were not tightened properly during service.

The carmaker has been trying to rebuild its image after a spate of recalls due to safety concerns in the past few years.

In European company news, sportswear maker Adidas has said its full-year profits should be at the top end of forecasts thanks to key events such as the Olympics and Euro 2012.

It now expects full-year net profits to rise by 15-17%, against an earlier estimate of 12-17%.

Adidas said major sporting events would provide a "positive stimulus" to sales.

It also said second quarter profits rose to 165m euros ($202m; £130m), up from 140m euros a year earlier.

France's biggest bank, BNP Paribas, has reported better-than-expected profits in the three months ending in June following a round of job and spending cuts.

The lender made 1.8bn euros ($2.2bn; £1.4bn) in the second quarter. Although this was down 13% from 2.1bn euros a year earlier it was better than analysts' forecasts.

Italian football club Inter Milan says that a group of Chinese investors is to become its second largest shareholder.

In a statement, Internazionale Holding, the parent company, said the group would acquire a stake but that the Moratti family would retain control.

It also said it would build a new stadium in partnership with a unit of China Railway Construction to be completed in 2017.

The latest Business Daily programme from the BBC World Service looks at the problem of unemployment from the perspective of applicants.

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