Bloomberg
“Japan Shares Rise with Nikkei 225 Closing at Highest Since 1996.”
Japanese shares advanced, with the Nikkei 225 Stock Average closing at its highest since December 1996, bolstered by companies in industries ranging from technology to retail.
Machinery maker Fanuc Corp., Recruit Holdings Co., FamilyMart UNY Holdings Co., SoftBank Group Corp. and Terumo Corp. were the biggest contributors to the Nikkei 225’s gain, while scandal-whipped Kobe Steel Ltd. was the worst performer, falling a record 36 percent over two sessions. Railway companies and insurers propelled the benchmark Topix index to a decade-high for a second straight day.
Japan’s stock market has been buoyed by a series of upbeat economic data. A Cabinet Office report released before the market opened Wednesday showed Japan’s core machinery orders for August climbed more than analysts expected. The yen’s weakness against the dollar has further fanned speculation for robust growth in quarterly earnings.
Japanese voters will head to the polls on Oct. 22 for a general election in which Prime Minister Shinzo Abe’s Liberal Democratic Party will be challenged by Tokyo Governor Yuriko Koike’s new Party of Hope. Support for the LDP was up marginally to 31.2 percent in an opinion survey conducted Oct. 7-9, compared with a poll from last week, according to public broadcaster NHK.
Reuters
“U.S. flies bombers over Korea as Trump discusses options.”
The U.S. military flew two strategic bombers over the Korean peninsula in a show of force late on Tuesday, as President Donald Trump met top defense officials to discuss how to respond to any threat from North Korea.
Tensions have soared between the United States and North Korea following a series of weapons tests by Pyongyang and a string of increasingly bellicose exchanges between Trump and North Korean leader Kim Jong Un.
The two U.S. Air Force B-1B bombers were joined by two F-15K fighters from the South Korean military after leaving their base in Guam, South Korea’s Joint Chiefs of Staff said in a statement on Wednesday.
After entering South Korean airspace, the two bombers carried out air-to-ground missile drills in waters off the east coast of South Korea, then flew over the South to waters between it and China to repeat the drill, the release said.
Trump hosted a discussion on Tuesday on options to respond to any North Korean aggression or, if necessary, to prevent Pyongyang from threatening the United States and its allies with nuclear weapons, the White House said in a statement.
U.S. and South Korean wartime operational plans, including a plan to wipe out the North Korean leadership, were stolen by North Korean hackers last year, a South Korean ruling party lawmaker said on Wednesday.
The United Nations Security Council, which has imposed a series of ever tighter sanctions on North Korea, has banned four ships from ports globally for carrying coal from North Korea, including one vessel that also had ammunition.
China, North Korea’s main ally and trading partner, has consistently argued sanctions alone will not work, urging Washington and Pyongyang to lower their rhetoric and return to the negotiating table. China’s influential Global Times tabloid expressed alarm at how far the rhetoric on both sides had gone and how it had increased the risk of a “fatal misjudgment”.
BBC News
“Catalonia: Spain takes step towards direct rule.”
Spain’s prime minister has put Catalonia on notice that it could impose direct rule on the region. Mariano Rajoy said his government had asked the regional government to clarify whether or not it had declared independence. The move is the first step towards suspending Catalonia’s autonomy under the constitution.
Catalan leaders signed a declaration of independence on Tuesday but halted implementation to allow for talks. Mr Rajoy accused Catalan President Carles Puigdemont of having created «deliberate confusion» and said he wanted to restore «certainty».
«This call – ahead of any of the measures that the government may adopt under Article 155 of our constitution – seeks to offer citizens the clarity and security that a question of such importance requires,» Mr Rajoy said.
Speaking later in parliament, Mr Rajoy said Spain was facing the most serious threat to its 40-year-old democracy. «It falls to the Catalan leader to restore constitutional normality,» he told deputies.
The leader of the opposition Socialists, Pedro Sanchez, struck a more conciliatory tone. He told reporters that his party and the government had agreed to examine the possibility of using constitutional reform to end the crisis. This would be focused on «how Catalonia remains in Spain, and not how it leaves», he added.
Bloomberg
“Trump’s ‘Poison Pill’ Nafta Proposals Threaten to Derail Talks.”
Nafta talks have resumed with the U.S. administration looking increasingly isolated in its proposals to change the trade pact, as key figures raised the prospect of a collapse in negotiations. The fourth round of talks to update the North American Free Trade Agreement began Wednesday in the Washington area as U.S. President Donald Trump continued his threat to walk out. On the eve of talks, the top U.S. business group pledged to fight to preserve the pact and Mexico mused it can live without the accord.
Canadian Prime Minister Justin Trudeau — who has steadfastly struck an optimistic tone as his foreign minister begins to dampen expectations for a quick deal — will visit the White House Wednesday to discuss trade with Trump.
U.S. Trade Representative Robert Lighthizer kicked off the latest round by announcing an agreement on a chapter on competition. The countries have agreed to increased “procedural fairness in competition law enforcement,” his office said in a statement. It’s the second topic to be agreed on along with the chapter on small- and medium-sized businesses.
One of the most contentious U.S. proposals is around so-called rules of origin for vehicles, which govern what share of a car must be built within Nafta countries to receive the pact’s benefits. The U.S. is expected to propose substantially raising the regional requirement, from 62.5 percent currently, and potentially add a U.S.-specific content requirement. The auto industry has warned such restrictions could disrupt complex supply chains.
U.S. Chamber of Commerce Chief Executive Officer Thomas Donohue, speaking in Mexico City on Tuesday, said the rules of origin proposal would send more business overseas. Donohue pledged to fight “like hell” to defend Nafta if Trump tries to pull out, and urged Lighthizer to get a deal. He said the 23-year-old accord is facing an “existential threat” because of the Trump administration’s hardline proposals. “There are several poison pill proposals still on the table that could doom the entire deal,” Donohue said.