Business
Global Weakness Threatens Japan Recovery
TOKYO — The sharp drop in the Japanese stock market underscores a big vulnerability of the Abenomics recovery: weakness in overseas economies may undermine the success of measures to jump-start growth at home.
“Economies are all connected, and we’re really worried about how far the impact will reach” from the recent emerging market turbulence, Toyoaki Nakamura, chief financial officer of Hitachi Ltd., told reporters Tuesday, even as the electronics giant raised its earnings forecast for the fiscal year ending next month, predicting a record profit.
Much of the boom engineered by Prime Minister Shinzo Abe in 2013 was driven by a dramatic expansion in monetary stimulus from his handpicked Bank of Japan governor, who pushed down the value of the yen against the dollar and other major currencies. That gave the country’s manufacturers a lift in global markets by lowering the relative price of their goods. It also helped bring about higher profits and a stock market rally, which in turn lifted domestic spending.But one month into the new year, markets are moving in the opposite direction because of renewed concerns over the health of the U.S. and Chinese economies as well as emerging markets—and how that might filter back to Japan. The yen rose to its highest level in over two months versus the dollar, as investors see the Japanese currency as a safe investment at times of economic turbulence, casting a new shadow over exports.
Following the new yen strength and spreading worries about growth abroad, the Nikkei Stock Average dropped over 4% Tuesday to 14008.47, its lowest closing level in four months.
The market reversal and signs of fragility in overseas demand pose major challenges to Japan’s economy, which is just about to become more dependent on exports and the weak currency for growth. In April this year, the government plans to raise the national sales tax by three percentage points to 8%, a move expected to sap strength off consumption given lackluster growth in wages.The sudden bout of Japanese stock weakness follows a number of positive reports, for domestic firms and for the economy.
As companies have reported earnings for the October to December quarter over the past two weeks, they’ve shown a dramatic recovery thanks to the yen’s nearly 20% drop over the past year. Earnings reports released thus far by 517 listed Japanese companies have shown an average 45% jump in operating profits, according to SMBC Nikko Securities. Honda Motor Co., Japan’s third biggest car maker by volume, posted a net profit of ¥160.7 billion ($1.6 billion) in the quarter through December, more than double its year-earlier result, partly because of a weaker yen.
Government economic data in recent weeks has almost all been upbeat. The most recent figures were released Friday—ahead of this week’s two-day Nikkei plunge of nearly 7%–and showed surprising strength. The most closely watched index for consumer prices was positive in 2013 for the first time in five years, signaling an end to the deflation that has sapped the economy, while the unemployment rate dropped to 3.7%, its lowest level in six years.The Japanese economy regained some momentum in the final three months of last year after a slowdown over the summer, likely expanding 2.4% on reaccelerating consumer spending, according to 12 economists polled by The Wall Street Journal.
Japanese policy makers have urged calm in recent days, insisting the country’s recovery remains on track, despite jitters abroad. “I want market participants to be sure…that there is no need for Japanese markets to move in sync with the U.S. market,” Economy Minister Akira Amari said at a regular news conference Tuesday.
“There is no major change in the economic fundamentals” of the U.S. and Japan, and weakness in the latest ISM data is due to unusually cold weather in the U.S., said Yoshimasa Maruyama, a senior economist with Itochu Economic Research Institute. “You shouldn’t overreact to this.”
But the economy is almost certain to sink, at least temporarily, after one-off rush spending ahead of the sales tax increase runs its course. In December, households boosted spending on autos by 50%, refrigerators by 164% and watches by nearly 200% compared with year-earlier levels, according to government data.The question is whether exports and business investment will gather enough steam to cover the slack to be left by consumption, as forecast by the BOJ.
Export volumes show little sign of life. They rose a meager 2.5% on year in December, slower than a 6.2% in November, as shipments to the U.S. fell and those to Asia moderated. Honda has cut its forecast for global sales for the full year to 4.385 million vehicles from 4.430 million previously, citing uncertainty in emerging markets.
Some economists worry that the new bout of market weakness could undercut support for Mr. Abe’s ambitious economic reform program, seen as crucial for sustaining longer-term growth. “The Japanese public has until now supported economic reforms because of rising stock prices and the falling yen,” which have worked favorably for the nation’s economy, said Ryutaro Kono, chief Japan economist at BNP Paribas. But structural overhauls have made little progress. And with the market now turning unstable, “it could become politically more challenging” to carry out such reforms, which often involve pains, Mr. Kono added.
– WALLSTREET JOURNAL
Shell will continue to support Nigeria in its efforts to build a secure energy future through investments and efficient delivery of its businesses in Nigeria.
“We continue to invest in Nigeria’s future through our projects, our people, and our enduring confidence in the potential of this nation,” General Manager, Development and Subsurface Shell Nigeria Deepwater, Kun Jiang said today while delivering the sponsor’s remarks at the 49th edition of the Nigeria Annual International Conference and Exhibition of the Society of Petroleum Engineers in Lagos.
Kun highlighted current investments in Bonga North, HI and the advancement of Bonga Southwest as testimonies of Shell’s confidence in Nigeria’s deepwater future. The confidence was further reiterated with the recent launch of a US$3 billion contract financing programme by Shell Nigeria Exploration and Production Company (SNEPCo), which will help Nigerian contractors build capability, create value, and accelerate project delivery.
Shell is a major sponsor of the conference as part of a longstanding support for a professional body which has contributed to the development of the oil and gas industry. Discussing the theme of the conference; “Thriving in the Evolving Global Energy Landscape: Collaborative Growth and Resilience,” Kun said Nigeria had a lot of opportunities despite geopolitical tensions that threaten global supply chains and market volatility and shifting energy dynamics.
“With a population exceeding 240 million people, abundant natural resources, world-class talent, and growing domestic energy needs, Nigeria has all the ingredients to become one of the world’s most attractive energy investment destination,” she pointed out. “But potential alone does not create prosperity. Potential must be converted into progress. Resources must be transformed into value. Opportunity must be matched by action.”
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Nigeria must continue to attract capital, strengthen the business environment, embrace technology to unlock potentials if it will thrive in the global evolving energy landscape. She added: “The future will belong to countries and industries that combine resilience with innovation, ambition with collaboration and investment with execution excellence. Nigeria has the resources. Nigeria has the talent. Nigeria has the opportunity. What is required now is the collective determination to seize it.”
Shell is mounting an exhibition at the SPE conference with SNEPCo’s Senior Production Geologist Abidemi Belgore taking industry leaders and regulators round the stand.
Key areas of interest include technological breakthroughs that have enhanced output at Bonga and facilitated the execution of the Bonga North project. Also highlighted on the stand is the full range of Shell businesses in Nigeria from deepwater oil production and integrated gas to renewables and power solutions as well as social investments across the country.
The Nigerian naira recorded further gains against the United States dollar on Monday, appreciating to N1,408 per dollar in the parallel market, compared to N1,415/$ recorded at the close of trading last weekend.
The local currency also strengthened in the Nigerian Foreign Exchange Market (NFEM), where it appreciated to N1,365 per dollar, up from N1,368/$ at the end of last week.
According to data released by the Central Bank of Nigeria (CBN), the indicative exchange rate improved by N3, reflecting sustained appreciation of the naira in the official market.
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The latest gains also narrowed the gap between the parallel and official exchange rates to N43 per dollar, down from N47 per dollar recorded on Friday, indicating a gradual convergence between both markets.
Meanwhile, activity in the official foreign exchange market increased significantly, with interbank turnover surging by 132.3 per cent to N137.05 million, compared to N58.99 million recorded last weekend.
The improved performance of the naira across both markets comes amid continued efforts by monetary authorities to stabilise the foreign exchange market and enhance liquidity.
With a view to improving operational efficiency, safety, compliance and service delivery across its operations, Pinnacle Oil & Gas Limited has reaffirmed commitment to building stronger relationships with its vendors.
The company made the commitment at its 2026 Vendors’ Forum held in Lagos under the theme, “Partnering for Operational Excellence,” with the sub-theme, “Strengthening Partnerships Through Compliance, Safety, Performance and Innovation.”
The forum brought together more than 100 existing and prospective vendors as well as key stakeholders, both physically and virtually, to strengthen collaboration and align suppliers with the company’s operational standards and growth strategy.
Speaking at the event, Managing Director and Chief Executive Officer of Pinnacle Oil & Gas, Adenike Labinjo, described vendors as strategic partners whose commitment to quality, innovation, safety and compliance is critical to the company’s success.
She said as Pinnacle continues to expand its operations, it has become increasingly important for the company and its vendors to share a common understanding of expectations, responsibilities and performance standards.
Labinjo stressed that safety, regulatory compliance and ethical business practices remain non-negotiable in all engagements with suppliers.
She noted that stronger collaboration with vendors would help the company deliver greater value to customers and other stakeholders while supporting sustainable business growth.
The forum featured technical presentations by senior executives from the company’s Procurement, Engineering, Compliance, Finance, Legal, Health, Safety and Environment (HSE), and Sales and Marketing departments.
Participants received guidance on Pinnacle’s procurement procedures, vendor onboarding and prequalification processes, Know Your Customer (KYC) requirements, tax invoicing, payment processes, contractual obligations, technical specifications, contractor responsibilities, supplier performance expectations and Service Level Agreements.
The company also unveiled improvements to its Purchase Order (PO) process aimed at improving efficiency, transparency and ease of doing business with vendors.
A major highlight of the event was an interactive question-and-answer session where vendors engaged directly with the company’s leadership on procurement procedures, compliance requirements, project execution, HSE standards and areas for continuous improvement.
According to Pinnacle, the session reinforced its commitment to transparency, open communication and stronger collaboration with suppliers.
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The company also recognised outstanding vendors whose contributions have supported its operational performance over the past year. Five companies received Certificates of Recognition for exceptional service delivery, innovation and partnership.
The award recipients were Great Grace Enterprise for Outstanding Delivery Performance, Cevets Nigeria Limited for Excellence in Project Delivery, Ceezik Projekts for Outstanding Quality, Diadco Nigeria Limited for Outstanding Responsiveness, and Sephill Innovative Solutions Limited for Best Commercial Value.
On the significance of the forum, Head of Procurement and Administration, Oluseyi Ogunfowora, said the initiative reflects Pinnacle’s determination to build stronger partnerships through transparency, collaboration and shared accountability.
She explained that the procurement function coordinates the requirements of Engineering, Operations, Marine, Compliance, Legal, Finance, HSE and other business units to ensure a fair, efficient and transparent procurement process.
Ogunfowora urged vendors to submit complete and compliant documentation, communicate proactively and seek clarification whenever necessary.
“The success of our business depends on the strength of our partnerships,” she said. “When vendors clearly understand our expectations and we work together with transparency, compliance and open communication, we create a high-performing vendor ecosystem that benefits everyone.”
She added that the 2026 Vendors’ Forum forms part of Pinnacle’s broader strategy to strengthen supplier engagement, improve operational efficiency and reinforce a culture of compliance, safety, innovation and continuous improvement throughout its value chain.
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