Japan issues fresh warnings after yen hits 38-year low; Elon Musk’s SpaceX ‘valued at $210bn’ – business live | Business

Profits have almost halved at motoring and cycling retailer Halfords.

Halfords blamed continuing declines in the markets for car tyres and for cycling equipment, as consumer demand for big ticket purchases wanes.

It made pre-tax profits of £19.9m in the last year, a 45% drop on the £36.2m the previous 12 months.

Halfords reports that the cycling market contracted faster than expected, leading to more promotional activity to shift stock.

Elevated cost inflation continued to be a significant headwind, it adds.

It’s also a busy morning for UK retailers, with several companies updating the stock market on their performance.

Electricals seller Currys has reported a 10% rise in adjusted profit before tax, to £118m.

Currys is hoping for a further boost from artificial intelligence, telling shareholders that the coming wave of AI led technology could be the most exciting tech cycle since the Apple iPad in 2010.

Alex Baldock, Currys CEO, says:

Encouraged as we are by our progress, we know we can go further. For one thing, we expect AI-powered technology to be the most exciting new product cycle since the tablet in 2010. With our partnerships, scale and expert colleagues to demystify AI, we’re best-placed to benefit.

Elon Musk’s SpaceX has been valued at about $210bn based on the value of insider shares being sold in a tender offer, Bloomberg reports today.

SpaceX will sell insider shares at $112 apiece in a tender offer, a higher-than-expected price, that boosts the value of Elon Musk’s space and satellite company above its previous valuation of $180bn.

SpaceX is considered one of the most profitable start-ups in the world, Bloomberg says, adding:

The firm, which was founded in 2002 by Tesla Inc CEO Elon Musk, is one of the most prominent private manufacturers of spacecraft and satellites. It also offers satellite-based internet services through its Starlink subsidiary.

The firm also holds a slew of contracts from NASA to provide spacecraft and crew equipment for orbital missions and support for the International Space Station.

Earlier this month, SpaceX recorded the first fully successful test flight of its mighty space rocket Starship, when it splashed down successfully in the Indian Ocean.

Japanese finance minister, Shunichi Suzuki, pledged today that authorities would take necessary actions on currencies after the yen slid to a 38-year low against the dollar.

Japanese authorities are “deeply concerned” about the effect of the yen’s drop on the economy and are watching foreign-exchange moves with a high sense of urgency, Suzuki told reporters.

He said:

“It’s desirable for exchange rates to move stably. Rapid, one-sided moves are undesirable. In particular, we’re deeply concerned about the effect on the economy.

We are watching moves with a high sense of urgency, analysing the factors behind the moves, and will take necessary actions.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Pressure is piling on Japan’s authorities to intervene in the foreign exchange markets, after the yen weakened to a 38-year low against the US dollar.

The yen, which has been ailing for some months, has weakened to as low as 160.8 to the dollar, for the first time since 1986.

That takes the yen below its low in April, when Tokyo was forced to intervene in the foreign exchange markets, burning through ¥9.8tn (£48bn) to prop up their currency.

The yen’s weakness is due to the interest rate differential between Japan and the rest of the world. While most central banks hiked rates aggressively over the last coule of years, the Bank of Japan (BoJ) only ended its negative interest rate policy this spring, and has pegged borrowing costs to a range of 0%-0.1%.

Yesterday, Japan’s top currency official, Masato Kanda, told reporters that the government was “seriously concerned and on high alert” about the yen’s decline and would respond to any “excessive” moves.

This week’s weakness has prompted speculation that fresh intervention may be required.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, says:

The only thing that prevents the yen from a further fall is the direct intervention risk. But other than that, the yen deserves to lose more blood. One-year risk reversals, which show how traders feel about the yen over a longer time, hint that they’re still kind of excited about the yen compared to the dollar.

But that excitement is fading fast as the Bank of Japan (BoJ) keeps delaying its intervention plans meanwhile the Federal Reserve delays its rate cutting plans

Another option would be for the BoJ to raise interest rates, of course, and try to strengthen the yen organically that way.

This may not be too controversial, since the weak yen is hitting Japanese households hard, explains Kathleen Brooks, research director at XTB, adding:

They must deal with rising inflation, as import prices surge, which is also weighing on consumption. Wage growth is also below inflation, which is adding pressure to the Japanese authorities to act.

Some argue that the BOJ need to adjust monetary policy and narrow the interest differential with the US and the rest of the world, as that is the most effective way to boost the yen. However, it would also require a shift in priorities at the BOJ, moving away from keeping yields low and stable, to a normalization of monetary policy like that in the US and across Europe.

The agenda

• 8.30am BST: Swedish Riksbank interest rate decision 8.30am

• 10.30am BST: Bank of England Financial Stability Report

• 10am BST: Eurozone consumer and economic confidence statistics for June

• 1.30pm BST: US GDP Q1 (final estimate)