TOKYO (AP) — Business sentiment among major Japanese manufacturers turned positive for the first time in nearly two years, a signal that companies are reacting positively to the weaker yen and Prime Minister Shinzo Abe's policies to revive the stagnant economy.
The Bank of Japan's closely-watched quarterly "tankan" survey for June showed that the index for major manufacturers rose to positive 4 from negative 8 in March. The survey released Monday was the first to be higher than zero since September 2011. A positive reading means more companies are optimistic than pessimistic.
The index for major non-manufacturers rose to 12 from 6 in the last survey.
The "tankan" also showed that major manufacturers plan to increase capital spending by 6.7 percent in the current fiscal year, while non-manufacturers plan to increase investment by 4.9 percent.
The improved confidence comes amid a weakening yen, which boosts overseas income for Japan's key exporters, and a series of aggressive economic policies — monetary easing and boosting public workers spending — implemented by Abe since he took office in late December.
Japan said Friday that industrial production had risen 2 percent in May from April, the fourth monthly increase, while core consumer prices had stopped falling for the first time in seven months. For years, Japan has been dogged by deflation, or falling prices, which can drag on economic growth, and the Bank of Japan has set a goal of 2 percent inflation within the next two years.
Japan's economy grew at a 4.1 percent annual pace in the first quarter.
The stock market has risen sharply this year, but share prices have fallen back some over the last month amid skepticism about Abe's plans to enact structural reforms in the economy and a belief that prices rose too far too fast.
By Terhi Kinnunen
HELSINKI (Reuters) - Nokia will pay $2.2 billion to buy out partner Siemens AG in their network equipment joint venture, a deal that is likely to bring some stability to the company after it stumbled in smartphones.
Loss-making Nokia also gained full control of the profitable venture, Nokia Siemens Networks (NSN), at a cheaper than-expected price, analysts said.
"With this transaction, Nokia buys itself a future, whatever happens in smartphones and feature phones," Bernstein analyst Pierre Ferragu wrote in a note to clients.
But he noted that the acquisition could put pressure on Nokia's balance sheet.
Nokia fell behind rivals Apple Inc and Samsung Electronics Co Ltd in the smartphone race, making the controversial decision to switch to Microsoft's untried Windows software in 2011.
In contrast to Nokia's phone business, NSN turned profitable in the second quarter of 2012 after slashing costs and as its focus on fourth-generation Long Term Evolution (LTE) networks began to pay off.
NSN's adjusted earnings before interest and taxes (EBIT) amounted to 196 million euros in the first quarter of this year.
Nokia will pay 1.2 billion euros in cash and the other 0.5 billion euros will take the form of a secured loan from Siemens that will be repaid later.
"Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity," Nokia Chief Executive Stephen Elop said in a statement.
Nokia and Siemens formed the 50-50 joint venture in April 2007 and the agreement lapsed in April this year. Nokia had said it had wanted NSN to be sold or listed and many analysts had believed it might be sold.
Nokia said it expected to close the transaction, subject to regulatory approval, during the third quarter of this year.
Nokia said it estimated its net cash position was 3.7-4.2 billion euros, adding that if the NSN deal had closed in the second quarter, its net cash position would have been 2.0-2.5 billion euros. ($1 = 0.7693 euros)
(Editing by Miral Fahmy, Jeremy Laurence and Edwina Gibbs)
(Reuters) - A union pension adviser opposes the re-election of drug wholesaler McKesson Corp.'s chief executive, citing excessive pay and the failure to heed a shareholder advisory vote to split the chairman and chief executive roles, the Wall Street Journal reported.
In a letter expected to be sent on Monday, CtW Investment Group urged McKesson's shareholders to vote against the re-election of CEO John Hammergren and directors Alton Irby III and Jane Shaw, the business daily said.
Irby and Shaw head the board's compensation and governance committees, respectively.
This is not the first time that CtW, which advises union pension funds, has targeted Hammergren. It successfully campaigned to force Hammergren to resign his board seat at Hewlett-Packard Co earlier this year.
HP's then chairman, Ray Lane, and another director also quit their posts in the shakeup at the No.1 personal computer maker's board in the aftermath of a failed $11 billion deal for Autonomy.
CtW says the funds it advises own a total of 1.4 million McKesson shares out of 228.5 million outstanding, according the Wall Street Journal.
In its letter, CtW opposed the re-election of Irby, the longtime chairman of McKesson's compensation committee, over what it said was "one of the most exorbitant CEO pay practices in the S&P 500", the daily reported.
Hammergren would have been paid $159 million had he voluntarily left the company in March, in what is said to be the largest ever pension benefit for an executive of a public company.
CtW and McKesson could not be immediately reached for comment outside regular business hours.
(Reporting by Chris Peters in Bangalore; editing by Jane Baird)