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HONG KONG — Asian markets were mixed in early trade on Thursday after minutes showed some Federal Reserve officials contemplating a wind-down of its vast monetary easing measures, while optimism remained buoyed by the outlook for the economic recovery.

Bitcoin stabilised after Wednesday's wild gyrations that saw it collapse almost a third in one day before recovering most of its losses.

Global equities have soared after hitting their pandemic nadir in March last year, thanks to central bank largesse and mind-boggling government spending measures, with recent gains also helped by the rollout of vaccines and easing of lockdown measures.

But investors have for months grown increasingly concerned that the blockbuster bounceback expected in the world economy will fan inflation as the stimulus mixes with cashed-up consumers who have been unable to spend finally being let loose.

Data suggests those fears are coming true as recent inflation readings in several countries beat forecasts, with supply shortages and a low base effect from last year compounded by companies hiking wages to attract workers.

The Fed has repeatedly insisted that it sees the upward pressures as transitory and that prices will stabilise next year, adding that it will maintain its ultra-easy policies and record low interest rates until unemployment has been tamed and inflation is running consistently hot.

However, with the economy well on the recovery track, minutes from the Fed's April meeting released Wednesday indicated some board members consider the time may soon come to at least begin discussing the bank's position.

"A number of participants suggested that if the economy continued to make rapid progress toward the committee's goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases," the minutes said.

 'Surprise' 

Analysts pointed out that the meeting came before figures showed US inflation rocketed more than estimated in April, meaning the worries of those hawkish board members may have since been heightened.

"First they taper, then everyone starts the countdown until the rise with interest rates," said OANDA's Edward Moya. "Treasury yields climbed higher as the Fed's minutes show hawks are starting to emerge as the outlook for asset purchases is no longer unanimous.

"Now it is various participants that think it will be some time before further progress is made with their goals."

Still, US markets ended lower but well off their earlier lows as investors took comfort that the change in policy would not likely be immediate.

Asia fluctuated. Tokyo ended slightly higher, and Sydney and Wellington added more than one per cent, while Singapore, Bangkok and Jakarta also rose.

Hong Kong dropped as it reopened after a midweek holiday to play catch-up with Wednesday's global losses, as Shanghai, Seoul, Taipei, Manila and Mumbai also retreated.

London, Paris and Frankfurt all rose at the open.

"It was a surprise to hear the talk about Fed tapering," Joyce Chang, of JP Morgan Global Research, told Bloomberg TV.

"The market had been thinking there might be a couple of months before you really saw this particular issue come into focus." Still, she said the outlook remained upbeat for the global economy as it emerges from last year's crisis.

Bitcoin edged up in Asian trade to sit back above $40,000, having endured a rollercoaster Wednesday after China signalled a new crackdown on the cryptocurrency before Elon Musk gave his crucial support on Twitter.

The digital unit was sent crashing from $45,000 to almost $30,000 at one point -- less than half its record high reached last month -- in reaction to Beijing's warning that it would not be allowed for transactions. But Tesla tycoon Musk later tweeted a diamond and open hands emoji many took as a sign his car giant would not sell.

BEIJING — Bitcoin plunged below $39,000 for the first time in more than three months on Wednesday after China said cryptocurrencies would not be allowed in transactions and warned investors against speculative trading in them, despite the country powering most of the world's mining.

The comments sent the unit diving more than 10 per cent and dealt it another blow soon after being battered by comments from tycoon Elon Musk and his Tesla car company.

Trading in cryptocurrencies has been banned in China since 2019 to prevent money laundering as leaders try to stop people from shifting cash overseas. The country had been home to around 90 per cent of the global trade in the sector.

In a statement, three state-backed industry associations said "cryptocurrency prices have skyrocketed and plummeted, and cryptocurrency trading speculation activities have rebounded".

The price fluctuations "seriously violate people's asset safety and disrupt normal economic and financial order", said the statement, which was posted to social media by the People's Bank of China.

The notice warned consumers against wild speculation, adding that the "losses caused by investment transactions are borne by the consumers themselves", since Chinese law offers no protection to them. 

It reiterated that providing cryptocurrency services to customers and crypto-based financial products was illegal for Chinese financial institutions and payment providers.

Linghao Bao, analyst at Trivium China, said despite the ban Chinese investors can still find ways to buy cryptocurrencies through illegal vendors.

"There will always be a way to circumvent regulations," he said. "The point of this order is to tell financial institutions to up their game to detect these crypto-related transactions."

Bitcoin tumbled on Wednesday from $45,600 to $38,570, its lowest since early February, and well off the record high of $64,870 seen last month. It later edged back above $40,000 but analysts have warned it could test as low as $30,000.

"This is the latest chapter of China tightening the noose around crypto," Antoni Trenchev, managing partner and co-founder of London-based crypto lender Nexo, said.

'Here to stay' 

Adam Reynolds, of Saxo Markets, added that avoiding use of cryptocurrency, which can be transferred out of the country, is "essential to maintaining capital controls" in China. 

Bitcoin has had a torrid few days. It took a heavy hit at the start of the week after Musk appeared to suggest Tesla was planning to sell its huge holdings of the unit. And that came days after the electric car giant said it would halt using it in transactions because of environmental concerns.

"Elon Musk started the ball rolling," Germany-based crypto analyst Timo Emden said.

 "It will take some time for them to recover from this shock."

Mining cryptocurrency is a hugely energy-intensive process requiring large amounts of electricity in giant data centres.

China, which powers nearly 80 per cent of the global cryptocurrency trade, relies on a particularly polluting type of coal, lignite, to power some of its mining.

"If bitcoin was a country, it would use around the same amount of electricity a year to mine as Switzerland does in total," Deutsche Bank analysts said in a note.

However, some Chinese enthusiasts remained unfazed.

"This has happened before and it happens every year... Crypto is here to stay," said trader and ex-tech industry worker Zeng Jiajun. 

The Hong Kong Bitcoin Association tweeted: "It is customary for the People's Bank of China to ban bitcoin at least once in a bull cycle."

China is in the midst of a wide-ranging regulatory crackdown on its fintech sector, whose biggest players — including Alibaba and Tencent — have been hit with big fines after being found guilty of monopolistic practices.

The central bank has also sought to promote its own heavily regulated digital yuan, which it is testing across the country in pilot schemes.

BERLIN — Germany's competition authority said on Tuesday it had opened an inquiry into online retail giant Amazon over potential "anti-competitive practices", using a new law giving regulators more power to rein in big tech companies.

Federal Cartel Office head Andreas Mundt said his office is examining whether Amazon has "an almost unchallengeable position of economic power" and whether it "operates across various markets".

If so, it could be deemed of "paramount significance", said Mundt, adding that the regulator could "take early action against and prohibit possible anti-competitive practices by Amazon".

"This could apply to Amazon with its online marketplaces and many other, above all digital offers," he added.

In a statement to AFP, an Amazon spokesperson said the company "cannot comment on ongoing proceedings and will fully cooperate with the FCO".

Under the amendment to Germany's competition law passed in January, the watchdog said it now has more power to "intervene earlier and more effectively" against big tech companies, rather than simply punishing them for abuses of their dominant market position.

The German reform coincided with new EU draft legislation unveiled in December aimed at curbing the power of the internet behemoths that could shake up the way Silicon Valley can operate in the 27-nation bloc.

The push to tighten legislation comes as big tech companies are facing increasing scrutiny around the globe, including in the United States, where Google and Facebook are facing antitrust suits. 

The Amazon probe is only the second time that Germany's Federal Cartel Office has made use of its new powers, after first employing them to widen the scope of an investigation into Facebook over its integration of virtual reality headsets.

The watchdog already has two traditional abuse control proceedings open against Amazon.

One involves the company's use of algorithms to influence the pricing of third-party sellers on Amazon Marketplace, while another is probing the extent to which Amazon and major producers such as Apple exclude third parties from selling brand products.

Legal battles 

Amazon says it employs 23,000 people in Germany and has invested 28 billion euros ($34.2 billion) in the country since 2010.

"We continue to focus on innovating for both our customers and the businesses in Germany that sell in our store," a company spokesperson noted.

Yet amid fears that its monopoly of online retail is strangling smaller businesses and pushing bricks-and-mortar stores to extinction, the company has faced a raft of legal challenges in recent years.

In February, a German court ruled that Amazon must list the country or place of origin of fruit and vegetables it sells online, in a landmark victory for consumer rights groups.

Yet, the retail giant has also scored crucial legal victories of its own, most notably in a battle with the EU over tax. 

Last week, an EU court annulled an order from the bloc's powerful antitrust authority that Luxembourg recoup 250 million euros ($295 million) in back taxes.

Germany and France have also joined calls from the United States to impose a global minimum corporate tax of 21 per cent, a move which targets huge multinationals like Amazon and Google.

Critics have repeatedly warned that many of the world's biggest companies use tax havens or used loopholes little to no tax, far less than some individuals. 

"People are fed up with big companies for not paying their fair share of taxes," French Finance Minister Bruno Le Maire told Die Zeit weekly in April.

LONDON — Fears about inflation and rising infections in several countries dimmed the mood on global markets on Monday and drove the dollar down, although there was good news on trade as Brussels and Washington called a truce on metals tariffs.

The Dow Jones Industrial Average was close to flat and the tech-heavy Nasdaq fell 0.76 per cent at open, while European markets mostly fell in afternoon trading.

"US stocks are edging lower following mixed Chinese economic data, concerns that Taiwan and Singapore success in fighting COVID is in jeopardy, and after the Empire State manufacturing survey solidified the inflationary theme that is running wild on Wall Street," Oanda analyst Edward Moya commented.

Chinese retail sales fell short of expectations, cooling hopes that consumption there would help power a global post-coronavirus recovery, while mounting price pressures in the US are raising fears the Federal Reserve (Fed) could call time on its easy-money policy.

The Fed has said it will ride out volatility in inflation data caused by comparisons with the early months of the pandemic last year.

But National Australia Bank's Rodrigo Catril warned of "rising concerns that inflation is becoming unanchored, with a decline in consumer sentiment a reflection of the negative impact inflation is having on disposable income".

Focus this week is on the release of minutes from the Fed's latest policy meeting at the end of last month, which will be pored over for an idea about members' views on inflation in light of surging commodity prices, supply bottlenecks and economic reopenings.

In trade, the US and EU called a truce on Trump-era tariff battles over steel and aluminium, announcing "discussions to address global steel and aluminium excess capacity" that will see Brussels temporarily suspend a plan to increase tariffs on high-profile American goods.

Musk hits bitcoin 

Also on the plus side, "optimism of robust economic and earnings growth this year persists as COVID-19 restrictions ease amid ramped-up vaccine rollouts on both sides of the pond", Charles Schwab analysts wrote.

In company news, AT&T said it plans to merge its WarnerMedia division with Discovery, creating a new standalone media giant to compete with rivals like Netflix and Disney+.

Meanwhile, trading in Hong Kong's largest pro-democracy media group was suspended on Monday, days after authorities froze the assets of its jailed owner Jimmy Lai under a new national security law.

Next Digital Limited — which publishes the Apple Daily newspaper — said it would halt trading "pending the release of an announcement" about Lai's frozen assets, in a statement to the city's stock exchange.

Elsewhere, bitcoin fell to $42,185 briefly, its lowest since February, after Elon Musk on Sunday appeared to suggest his Tesla carmaker may sell — or already had sold — its holdings in the cryptocurrency.

The unit later pared the losses to sit at $44,811.

Tesla had already hammered the digital currency last week when it said it will halt bitcoin transactions because of environmental concerns.

TOKYO — Investment giant Softbank Group on Wednesday reported the best ever annual net profit for a Japanese company, reaping the rewards of tech share rallies to recover from last year's record loss.

The telecoms firm turned investment behemoth has poured money into some of Silicon Valley's biggest names and hottest new ventures from AI to biotech through its $100 billion Vision Fund.

People moving their lives online during pandemic lockdowns boosted the tech sector and helped the firm score a net profit of 4.99 trillion yen ($45.8 billion) for the year to March, SoftBank said.

The yearly figure tops Japan's previous record held by Toyota and places SoftBank among the world's most profitable companies.

But the firm warned that virus uncertainties meant there was "no guarantee that the current positive impact will be sustained", while analysts said a recent rout in tech shares could spell trouble for the firm.

In 2019-20, SoftBank reported a net loss of 961.6 billion yen — its worst ever — as the start of the pandemic compounded woes caused by its investment in troubled office-sharing start-up WeWork.

But it quickly returned to profit as the impact of COVID-19 lockdowns worked largely in its favour.

As people flocked to shop online, South Korean e-commerce giant Coupang, backed by SoftBank, raised more than $4 billion in its initial public offering (IPO) in March.

The value of the Vision Fund's stake in US food delivery app DoorDash also rose massively following its December IPO.

SoftBank founder Masayoshi Son took a typically defensive tone over the huge annual profit, saying it did not mean investors were "throwing their arms up in the air and giving all the praise".

"We must continue to make profit consistently to prove that all this is not out of luck... in the future, the stock market will go up and down," he said.

Son admitted he harboured "regrets" over several past decisions.

"There were investment failures. There was WeWork. There was Greensill. There was Katerra. There were many investing mistakes," he said.

"But what I regret more is that there were wonderful companies and I missed them. If I were playing baseball, it was like missed strikeouts."

Soaring tech shares on Wall Street led to consolidated gains of 7.53 trillion yen on its investments, particularly Vision Fund shares, Softbank said.

Masahiko Ishino, an analyst at Tokai Tokyo Research Institute, said the conglomerate should make hay while the sun shines.

"I don't know if 'it's time to harvest' is the correct phrase — but it's true that now is a good time to see results after the company's investments three or four years ago," he said ahead of the earnings report.

"A big factor behind [SoftBank's strong results] is the soaring US and global markets. It's a powerful driver, as many of the companies SoftBank has invested in are listed in the United States," he explained.

Kirk Boodry, an analyst at Redex Holdings, said a rout in tech shares seen in recent days could threaten SoftBank's plans to list more portfolio companies.

"For Softbank Group, tech weakness hits on multiple levels," he said, noting that Vision Fund public investments were down nearly $3 billion in the past two days.

SoftBank has invested heavily in ride-hailing platforms worldwide in recent years, from California-based Uber to Didi Chuxing in China, Singapore's Grab and India's Ola.

In January, SoftBank announced the sale of $2 billion worth of stocks in Uber following a surge in the US ride-hailing giant's value, though it still remains the firm's main shareholder.

Last month the Japanese group said it will buy a 40 per cent stake in Norwegian robotics company AutoStore, which develops warehouse automation technology, in a deal worth $2.8 billion.

By Ali Bekhtaoui
Agence France-Presse

NEW YORK — Cryptocurrency fans have counted Tesla boss Elon Musk as among their champions, but this week he rocked their world by questioning the future of the digital assets and singlling out carbon emissions from bitcoin mining for particular criticism.

"Energy usage trend over past few months is insane," Musk tweeted on Thursday, sharing a chart from the Cambridge Bitcoin Electricity Consumption Index (CBECI), his latest missive in a salvo that's caused bitcoin's price to drop.

Obtaining Bitcoin is an energy intensive endeavor, and the chart showed the evolution of its power usage, rising constantly from 2016 and accelerating sharply in 2020 on an annualized basis to hit its current level of 149 terawatt-hours (TWh), an all-time high.

That's compared to Google's entire energy usage of 12.2TWh, and the approximately 200TWh used by all data centres in the world except those that mine Bitcoin, according to George Kamiya, an analyst at the International Energy Agency (IEA).

"If Bitcoin was a country, it would use around the same amount of electricity a year to mine as Switzerland does in total," Deutsche Bank analysts said in a note.

Indeed, the IEA predicts the situation could worsen: If miners used the most energy intensive equipment, their consumption could rise to 500TWh.

Citing its energy consumption particularly by miners who use coal, Musk on Wednesday said Tesla would no longer accept Bitcoin as a means of payment for its electric cars.

The announcement sent the cyrptocurrency's value down 15 per cent to a two-and-a-half month low, a reversal from late March, when Tesla announced it would accept the digital currency as payment after announcing a $1.5 billion investment in bitcoin.

Big reward 

The promise of a juicy reward has fueled the rise in giant data centres dedicated to bitcoin, which reached a $1 trillion market capitalisation earlier this year, before falling back.

The cryptocurrency is earned by participants in the network called "miners", who solve deliberately complicated equations using brute force processing power under the so-called "proof of work" protocol.

"Proof of work" was one of the founding principles of the best-known cryptocurrency, created in 2008 by an anonymous person or group that wanted a decentralised digital currency.

The system is designed so that around every 10 minutes, the network awards some Bitcoin to those who have successfully cracked the puzzle. 

But as the price of bitcoin has risen, interest in obtaining it has followed, along with electricity consumption.

Last month, scientific journal Nature published a study saying that emissions from mining in China, which powers nearly 80 per cent of the global cryptocurrency trade, could compromise the country's climate goals.

That country relies on a particularly polluting type of coal, lignite, to power some of its mining.

Bloomberg predicts that it will take until 2060 before China can meet its cryptocurrency industry's needs through renewable energy.

'Wake-up call' 

One way to reduce energy consumption would be to move away from the processor-intensive "proof of work" model, similar to changes being considered for the Ethereum cryptocurrency.

But it is hard to imagine Bitcoin making such a change, which could make its network less secure and de-centralised.

"Tesla's move might serve as a wake-up call to businesses and consumers using Bitcoin, who hadn't hitherto considered its carbon footprint," said Laith Khalaf, a financial analyst at AJ Bell.

"This highlights that the long-term adoption of cryptocurrencies by businesses, consumers and investors is still highly uncertain."