Asia Pacific

Japan, the world’s most heavily indebted nation, is now getting paid to borrow. The Japanese government for the first time Tuesday issued benchmark 10-year bonds with negative yields, meaning it is effectively charging investors for the privilege of lending it money, The Wall Street Journal reported. That is the result of the topsy-turvy world of negative interest rates, which Japan entered earlier this year, when the country’s central bank began to charge lenders for holding some of their deposits, instead of paying them interest.

China’s central bank is increasingly finding itself in a bind, balancing its need to continue easing credit to support economic growth against its stated goal of keeping the Chinese currency stable. Late Monday, the People’s Bank of China lowered the amount of deposits that banks must hold in reserve by 0.5 percentage point, freeing up an estimated 700 billion yuan ($107 billion) in funds for banks to make loans. The move marks a reversal in the central bank’s stance from two months ago, when it resisted using such aggressive easing tools for fear that they could weaken the yuan.

Beijing has mothballed two pioneering outbound investment schemes, according to people with knowledge of the situation, in its latest bid to stem capital outflows and shore up the renminbi. The halt in the allotment of quotas reflects fears over the massive amount of cash — some economists estimate up to $1tn last year — that has left the country through official and unofficial channels as economic growth slows and the renminbi continues to depreciate, the Financial Times reported.

Officials from China’s central bank are urging Beijing to tolerate a sharply higher fiscal deficit to help stabilize growth, in an acknowledgment that a reliance on cheap bank loans has run its course as a way to boost the economy, The Wall Street Journal reported. The call comes as central bankers and finance ministers from the Group of 20 major economies are gathering in Shanghai to discuss new solutions to support global growth, including a focus on fiscal expansion and long-term overhaul rather than credit-driven growth.

Commodities trader Noble Group Ltd. on Thursday swung to a net loss of $1.67 billion for the 2015 fiscal year, its worst annual financial performance since its Singapore listing in 1997, largely due to an impairment charge related to its coal assets, The Wall Street Journal reported. The company’s performance is the latest sign of weakness in the commodities trading industry. Lower demand from China and a stubbornly slow pace of recovery in the global economy have hit companies like Noble, which make their money as middlemen between producers and consumers of commodities.

Bankrupt consumer electronics retailer Dick Smith Holdings Ltd will close down its remaining 363 stores in Australia and New Zealand after failing to find a buyer, receivers and managers of the company said on Thursday, Reuters reported. "Unfortunately the sale process has not resulted in any acceptable offers for the group as a whole or for Australia or New Zealand as standalone businesses," receiver James Stewart said in a statement.

South Korea’s household debt rose to a record Won1,200tn ($973bn) at the end of last year, worsening one of the country’s biggest vulnerabilities even as the government strives to put the national mortgage stock on a more stable basis, the Financial Times reported. The country’s household debt stands at more than 160 per cent of household incomes, having risen steadily for more than three decades, and is seen as one of the economy’s weakest points.

Twenty years ago, a dangerous cocktail of debt accumulated in foreign money and deteriorating exchange rates led emerging markets into financial meltdown, the Financial Times reported. In the aftermath, countries vowed to repent of the “original sin” of borrowing huge sums in non-domestic currencies. Major emerging markets went from having more than three-quarters of their debt in foreign currencies to around half. Finance ministers were applauded for better protecting economies from swings in global market sentiment.

Tajikistan, one of the world’s poorest countries, is discussing a possible International Monetary Fund bailout programme worth as much as $500m as its economy suffers the fallout from Russia’s recession. Jamoliddin Nuraliev, deputy head of Tajikistan’s central bank, told the Financial Times that the IMF could lend to the central Asian country under its extended-credit facility and that $500m would be a “reasonable” amount, although he added the government had not yet decided whether to make a formal request for assistance. “We are in a dialogue with the fund,” he said.

Twenty years ago, a dangerous cocktail of debt accumulated in foreign money and deteriorating exchange rates led emerging markets into financial meltdown, the Financial Times reported. In the aftermath, countries vowed to repent of the “original sin” of borrowing huge sums in non-domestic currencies. Major emerging markets went from having more than three-quarters of their debt in foreign currencies to around half. Finance ministers were applauded for better protecting economies from swings in global market sentiment.