Japan interest rates kept on hold

Japan's central bank has kept its key interest rate unchanged at just above zero and underlined its determination to overcome deflation. As widely expected, the board of the Bank of Japan unanimously opted to keep interest rates at 0.1 %. It said the world's second largest economy was improving, but further government support was needed to maintain the recovery. The board also said overcoming deflation was a "critical challenge". Falling prices "Japan's economy is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand," it said. The board added it expected Japan's economy to shrink by 2.5 % in the current financial year, an improvement on its previous estimate of a 3.2 % contraction. It also forecast growth of 1.3 % for the 2010-2011 financial year, up from its previous estimate of 1.2 %. The bank was less optimistic about deflation, saying that prices were likely to continue falling for three years. "The bank recognises that it is a critical challenge for Japan's economy to overcome deflation and return to a sustainable growth path with price stability," it said. Revised outlook Some analysts expressed disappointment at the government's attempts to stop prices falling. "I think deflation will be deeper than they think. I find it very disappointing that the central bank has decided not to change its policy," said Darius Kowalczyk, chief investment strategist at SJS Markets in Hong Kong. "They should expand their quantitative easing policies and be more aggressive, like Western banks were during the crisis." Standard & Poor's credit rating agency also expressed concern about both deflation and the high levels of Japanese government debt. It affirmed the economy's AA rating, but revised its outlook down from "stable" to " negative".

UK economy out of recession

The UK economy has come out of recession, after figures showed it had grown by a weaker-than- expected 0.1 % in the last three months of 2009. The economy had previously contracted for six consecutive quarters - the longest period since quarterly figures were first recorded in 1955. There have been recent recovery signs - last week, UK unemployment fell for the first time in 18 months. The UK's had been the last major economy still in recession. Europe's two biggest economies - Germany and France - came out of recession last summer. Japan and the US also emerged from recession last year. The weak level of growth took its toll on the value of the pound, which fell against both the dollar and the euro on the money markets. 'Below expectations' "We can say that Britain has just crossed the line in coming out of recession," said BBC chief economics correspondent Hugh Pym. "It [the growth figure] was below analysts' expectations. The figure could be moved down, or indeed upwards."

General Motors will invest in electric car

General Motors (GM) has announced plans to invest $246 m (£152 m) in the production of electric motors to power electric and hybrid vehicles. GM is currently getting its electric motors from third-party suppliers. "In the future, electric motors might become as important to GM as engines are now," said the carmaker' s vice-president, Tom Stephens. GM said the motors would be built in the US, although it did not say where, and would be ready for use in 2013. "By designing and manufacturing electric motors in-house, we can more efficiently use energy from batteries as they evolve, potentially reducing cost and weight - two significant challenges facing batteries today, " Mr Stephens said. GM plans to launch the Chevrolet Volt hybrid car later this year. It will be a direct competitor to Toyota's Prius, which is the current market-leading hybrid. GM sees electric vehicles as important to reviving its long-term fortunes following its emergence from bankruptcy protection last summer.

Siemens profit up

German engineering group Siemens has reported a big jump in profits for the final three months of last year, largely as a result of cutting costs. Net income for the quarter came in at 1.53 bn euros ($2.16 bn; £1.33 bn), a rise of 24 % on the 1.23 bn euros recorded for the same period a year earlier. However, overall revenue fell by 12 %, from 19.6 bn euros to 17.4 bn euros. This was largely due to disappointing performance in the industrial sector, where revenue fell by 13 %. Revenue from energy products fell by 10 Challenging year "Earnings for the first quarter provide a gratifying snap-shot of the current situation, " said chief executive Peter Loescher. "The actions we took at a very early stage are now cushioning us from the ongoing repercussions of the global recession." However, the company was cautious in its outlook for the coming year. "Siemens anticipates that conditions in the manufacturing sector and world financial markets will remain challenging in fiscal 2010 " it said. "Following a double-digit decline in orders in fiscal 2009 , we expect only a mid-single-digit percentage decline in revenue in fiscal 2010.

Apple's profit increase

Apple has announced a 50 % increase in profits after seeing a bumper Christmas period, in which sales of iPhones doubled from a year ago. Net income rose to $3.38 bn (£2.08 bn) in the three months to 26 December, from the $2. 26 bn it made the previous year. Apple said it sold 8.7 million iPhones in the quarter. Sales of Macs also rose 33 %, although iPod sales fell by 8 %. But the results were boosted by a new accounting standard that records revenue at the point of sale. Previously, revenue was deferred over the life of products. On Wednesday, the firm will announce a new product, widely expected to be a touch- screen "tablet" computer. The company has previously used January launches to unveil products including the iPhone and the MacBook Air. Apple shares rose $5.33 , or 2.7 %, to close at $ 203.08 in New York before the results came out. In extended trading the shares rose a further $1.28 to $ 204.36. 'Phenomenal sales' Sales in the first quarter rose to $15.7 bn from $11.9 bn in the same period a year ago. " The new products we are planning to release this year are very strong, starting this week with a major new product that we're really excited about " Steve Jobs, Apple chief executive Sales of the iPhone were boosted by its roll- out in China, the world's biggest mobile phone market. Mac sales rose to 3.36 million during the quarter while sales of iPods fell to 21 million. Analysts were impressed with the results. "It was a very good quarter, as expected. It's a continued sign that Apple has great products that consumers want despite this recession," commented Daniel Ernst from Hudson Square Research. "Mac sales were phenomenal as well... Macs continue to gain share and what's interesting is that it only has 3.6 % share globally so there's a lot of headroom." Apple forecast sales for the current quarter of between $11 bn and $11.4 bn.