Sony Steals the Spotlight as Japan Heats Up Inflation

It's been a slower week than normal across the Pacific -- at least, compared to the action-packed drama that "normal" has become in 2013 -- but there's still  plenty that you need to know about. Japan's Nikkei (NIKKEIINDICES: ^NI225  ) rose just 0.4% this week, a sluggish five days after the fast start to the year that's kicked up the index 5.8% since 2013 began. As long as the yen keeps weakening against other currencies, Japanese companies and stocks will be happy; but with a new chief of Japan's central bank soon to be nominated, change is in the air.

Shinzo Abe battles the BoJ
Japanese Prime Minister Shinzo Abe is keeping up the heat  on the Bank of Japan. Abe told the country's parliament this week that a failure to hit his 2% inflation target would warrant changes in the laws overseeing the central bank -- the latest shot he's fired at the BoJ in his efforts to fight deflation. Abe will also have to nominate a new governor for the BoJ soon, but his plans for a more aggressive leader may be fading.

Momentum is gaining behind former  deputy BoJ governor Toshiro Muto, a man with experience guiding monetary policy, and ties to numerous ruling party leaders. But while Muto has stated that Japan's central bank has room for more bond purchases, he has also cautioned of the risks of rising bond yields. This suggests a more cautious approach, as compared to Abe's charging-ahead style. Whether or not Abe will nominate Muto, or go with a candidate molded in his liking, remains to be seen.

However, it's not just the loose monetary policy of the BoJ that's affecting Japanese stocks. Sony (NYSE: SNE  ) hogged the spotlight this week with the announcement  of its PlayStation 4 entertainment console arriving later this year. The move didn't help Sony's shares much, which sank 1.4% this week, partially due to Sony's inexplicable choice of not even showing its game console at the announcement event. The company also failed to release a price, although Sony did announce  numerous social features and apps for the console, along with new games for the PS4's launch.

It'll have to perform well, as the video game market hasn't exactly been surging. Competitor Microsoft (NASDAQ: MSFT  ) hasn't released much information on its much-speculated successor to the Xbox 360 game console yet, although rumors  are flying that the company is preparing an announcement of the product with Sony's release in the rearview mirror. With the previous game consoles having been around for years, Sony and Microsoft need to make a splash to spice up lagging industry sales.

New consoles don't guarantee success, however, as Sony's fellow Japanese gaming company Nintendo (NASDAQOTH: NTDOY  ) has found. The company slashed its sales forecasts  for its new Wii U console back in January following a lackluster release, a serious disappointment, despite the company's raising of its profit forecast for the fiscal year through March. However, the Sony announcement surprisingly sent Nintendo's shares racing higher, and the stock managed to rise 5.6% this week.

Around the electronics stocks in Japan, Canon (NYSE: CAJ  ) managed to have a decent week, despite the hammering of its stock since the start of the year. Shares rose 1.1% this week, but the stock has fallen more than 12.2% through the beginning of 2013. The company released its Mixed Reality  headset this week, a bulky, virtual reality product that's a far cry from Google's (NASDAQ: GOOGL  ) Glass. Canon's Mixed Reality is aimed at businesses looking to render 3D environments or products in real virtual space, making it an (expensive) candidate for businesses. It isn't revolutionary, but Canon's virtual reality product is a cool device that should appeal to players in specific industries.

Is the opportunity there?

Sony's PS4 release opens the door for Microsoft to counter with the successor to the Xbox 360. However, with the release of its Surface tablet, along with the widely anticipated Windows 8 operating system, the company is also looking to make a splash in the booming mobile market. In this brand-new premium report on Microsoft, our analyst explains that, while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.


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  • Report this Comment On March 05, 2013, at 8:49 AM, jefferysikes wrote:

    At this particular point in time, there is a struggle going on over who will control the future of technology. For decades now it has been Microsoft, however their refusal to move to Unix based software, has placed them in the back of the pack. Windows 8 is simply a half baked, slammed together piece of software that everyone who uses it outside the Microsoft cronies, slides away from them like a platter full of cold, day old vegetables. Even a fire sale for $39, and commercials of people break dancing on a table, in synchronized choreography, have done little to boost Windows 8 sales. Microsoft is failing and has been since its introduction of Windows 7 (Repaired and Repackaged Vista). The folks at Redmond are out of ideas and out of touch with the needs of its proposed customers. Add to this the fact that the folks in Linux world have caught up and even surpassed Microsoft and you can understand the troubles of Microsoft. Android took over the market by storm and is the number one portable software for smart phones and tablets at this point in the game. Google was king of the heap for a while but will not remain there very long.

    The new direction seems to be migrating toward an OS on chip, based upon the Unix platform. Both Apple and the folks over at Linux are moving in this direction. This is leaving gaming platform folks such as Sony, Microsoft, and Nintendo in a head scratching quandary. What is the direction of game consoles in the future? Further, how does that integrate with smart phones, tablets and PC,s which allow the user to purchase only one device to achieve all three, without paying huge fees and spanning multiple platforms?

    Sony would like to release a playstation 4, but in todays tricky technical world, it could potentially invest millions in nothing more than a brick if they don’t get things right coming out of the gate. Everyone does not need a game console but everyone needs to access the internet and their e-mail and work on specific computer files. The gamers of the 1980s are quickly approaching their 30s, with families and little time to invest in gaming which extends past their home computers or smart phone. Sony needs to consider this very carefully. The playstaion 4 needs to become a multi role device, or it will not survive. Believe me when I say that Sony watched very carefully when Nintendo released its latest game platform which is selling very poorly.

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8/29/2014 2:30 AM
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