The Wall Street Journal - 19.08.2019

** MONDAY, AUGUST 19, 2019 ~ VOL. CCLXXIV NO. 42 WSJ.com HHHH $4.**

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Dollar’s

Strength

Pressures

Markets

Broadly

Commodities, earnings

and emerging nations

all have been dented

by U.S. currency’s rally

Jerome Powell is entering the most peril-

ous stage yet of his tenure as Federal Re-

serve chairman, fighting to keep the U.S.

from recession while taking the blame from

President Trump for skittish markets and a

slowing economy.

Mr. Trump’s unyielding criticism of the

Fed has led people inside the central bank to

feel like they are fighting to both buoy the

U.S. economy and preserve the Fed’s inde-

pendence from political interference.

After cutting short-term interest rates in

July, Mr. Powell is navigating the Fed toward

more rate reductions, though conditions

BYNICKTIMIRAOS

Japan’s Hello Kitty Shunned in

South Korea’s Boycott

iii

A trade dispute between the two nations

takes a toll on toys, chocolate, cat food

The company, CJ Cheilje-

dang Corp., swiftly apologized

this month and promised to

swap in a Korean alternative.

It was seeking to avoid a Japa-

nese boycott that’s

swept across the na-

tion, triggered by a

weekslong trade dis-

pute between the

two countries.

The campaign,

fueled more by emo-

tion than econom-

ics, initially targeted

travel and marquee

Japanese brands but

has evolved into an

effort to avoid any kind of Jap-

anese influence.

Please turn to page A

SEOUL—Not a speck of mi-

crowavable rice is off limits in

South Korea’s anti-

Japan fervor.

A hometown

brand of instant rice

sold by South Ko-

rea’s largest food

company had its na-

tional loyalty ques-

tioned recently after

social-media users

identified a Japa-

nese ingredient

among the local

grains. The culprit: the 0.1% in-

clusion of a Japanese rice-bran

extract.

BYNA-YOUNGKIM

ANDDASLYOON

Hello boycott.

Two Russian monitoring

stations designed to detect

nuclear radiation went silent

soon after the explosion at a

missile test site this month,

spurring concerns among ob-

servers that the Russian gov-

ernment is trying to restrict

evidence of the accident.

Two days after the explo-

sion of a suspected nuclear-

powered cruise missile un-

dergoing testing on Aug. 8,

two monitoring stations

nearest the site of the acci-

dent stopped transmitting

data, Lassina Zerbo, who

heads the Comprehensive

Nuclear Test Ban Treaty Or-

ganization, told The Wall

Street Journal.

The Russian monitoring

clear-powered cruise missile,

which has been dubbed Sky-

fall by the North Atlantic

Treaty Organization, and

which Russia calls Burevest-

nik.

The manned monitoring

stations are part of an inter-

national network of hun-

dreds of such stations set up

to verify compliance with the

Comprehensive Nuclear Test

Ban Treaty, which prohibits

nuclear weapons tests glob-

ally. Participating nations are

responsible for running the

stations.

The treaty has yet to for-

mally go into effect since the

required number of nations

haveyettoratifyit.

Russia has said it is

strictly observing the accord.

Please turn to page A

stations, called Dubna and

Kirov after the places where

they are located, were con-

tacted immediately about the

data disruption, Mr. Zerbo

wrote in an email on Sunday

to the Journal, and Russian

officials responded that they

were experiencing “commu-

nication & network issues.”

“We are pending further

reports on when the stations

or the communication system

will be restored to full func-

tionality,” Mr. Zerbo added.

He declined to speculate on

what caused the outage.

The missile test, on a plat-

form in Dvinsk Bay on the

White Sea in northwest Rus-

sia, has been the subject of

considerable speculation.

President Trump has said it

involved an advanced nu-

BYMICHAELR.GORDON

Hong Kong’s Peaceful Rally Adds Impetus to Resolve Crisis

ANTHONY KWAN/GETTY IMAGES

HEAD COUNT: The procession contrasted with recent weekends ofclashes between protesters and police that closed the city’s airport. On

Sunday, hundreds of thousands of mainly black-clad protesters filled streets, above, near Victoria Park, the rally’s starting point. A

A prolonged dollar rally is

pressuring U.S. corporate earn-

ings, hitting commodity prices

and threatening to deepen a

selloff in emerging markets.

The U.S. currency has con-

tinued to grind higher this year

despite an escalating trade

fight with China and broad-

sides from President Trump,

who has complained that the

dollar’s strength is curbing

growth. In July, the greenback

rose even after the Federal Re-

serve cut interest rates for the

first time in a decade, defying

expectations that lower rates

would cut the appeal of U.S. as-

sets to yield-seeking investors.

The ICE Dollar Index, which

tracks the dollar against a bas-

ket of six major currencies,

stands near its highest level in

more than two years and is up

nearly 11% from its 2018 lows.

One key driver of the dol-

lar’s gains has been the relative

strength of the U.S. economy,

which since 2015 until recently

has allowed the Fed to raise

rates far above the levels of

Please turn to page A

BYIRAIOSEBASHVILI

in its second giant venture-

capital fund, people familiar

with the matter said. Mr. Son

may account for as much as

$15 billion of that amount,

some of the people said.

It is an unusual setup that

would doubly expose SoftBank

to a startup economy that is

starting to show cracks.

The window for initial pub-

lic offerings, which appeared

wide open early this year, may

be closing as markets tumble

and public investors grow

weary of unprofitable start-

ups.

At $20 billion, the employee

pool would represent nearly a

fifth of the money that Soft-

Bank said in July it had lined

up for its second Vision Fund,

a successor to a $100 billion

fund that launched in 2017 and

is nearly spent.

Adding in its own contribu-

tion to the second fund of

$38 billion, SoftBank could

make up more than half of

the money raised, far more

than is typical for a fund

sponsor.

A Vision Fund spokesman

declined to comment.

SoftBank controls Sprint

Corp. and other telecommuni-

cations companies. It launched

its first fund with $60 billion

Please turn to page A

SoftBank Group is leaning

on its employees, including

Chief Executive Masayoshi

Son, for cash as the firm

rushes to raise an ambitious

technology fund amid volatile

markets.

The Japanese company

plans to lend up to $20 billion

to its employees to buy stakes

BYLIZHOFFMAN

ANDBRADLEYHOPE

SoftBank Bets on Loans for Fund

Fed Caught Between Slowing

Economy, Angry President

Chairman Powell faces scrutiny from markets, White House

Iranian Tanker Leaves Gibraltar

The ship, seen earlier Sunday, is at the center of a dispute between

Tehran and the West on enforcement of Syrian sanctions. It left

Gibraltar despite a U.S. effort to block its release. A

JOHNNY BUGEJA/AGENCE FRANCE-PRESSE/GETTY IMAGES

could change. The debate among his Fed col-

leagues is how much to move rates and

when, as well as how to best frame the deci-

sion, which will be scrutinized by markets

and the White House.

Mr. Powell is scheduled to speak Friday at

the annual central bank conference in Jack-

son Hole, Wyo., a gathering that many hope

will surface clues to the Fed’s next move.

Mr. Trump says the economy is slowing

because the central bank pushed interest

rates too high last year, while many in busi-

Please turn to page A

Russian Monitoring Stations

Went Silent After Missile Blast

 Outlook: Tariff fight masks deeper woes..........A

 Administration looks to new round of talks....A

We’ve got the secret to more confident trading.

Find out how our trade desk team can help you grow as a trader on page B10.

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CONTENTS

Business & Finance B

Business News...... B

Crossword.............. A

Heard on Street... B

Life & Arts...... A13-

Markets...................... B

Opinion.............. A17-

Outlook....................... A

Sports........................ A

Technology............... B

U.S. News............. A2-

Weather................... A

World News......... A8-

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What’s

News

 Two Russian monitor-

ing stations designed to

detect nuclear radiation

went silent soon after the

explosion at a missile test

site this month. A

 Trump warned China’s Xi

against reacting violently to

protests in Hong Kong, saying

that could threaten a trade

deal. U.S. officials confirmed

a new round of talks. A

 Hong Kong protesters

held a peaceful march in

support of the movement

that opposes China’s tight-

ening grip on the city. A

 About half of Americans

disapprove of Trump’s re-

sponse to the mass shoot-

ings in Texas and Ohio, ac-

cording to a new Wall Street

Journal/NBC News poll. A

 Prosecutors in Manhat-

tan labeled Epstein a low-

level sex offender nearly a

decade ago, against the

recommendation of a

panel of experts. A

 The Iranian tanker im-

pounded by Gibraltar

sailed out of the British

overseas territory over the

objections of the U.S. A

 The death toll from a

suicide attack on a wedding

in Kabul rose to at least 63,

Afghan authorities said. A

 Sudan’s pro-democracy

movement and ruling mili-

tary council signed a power-

sharing agreement. A

A

prolonged dollar rally

is pressuring U.S. corpo-

rate earnings, hitting com-

modity prices and threat-

ening to deepen a selloff in

emerging markets. A

 SoftBank is leaning on

its employees, including

CEO Son, for cash as the

firm rushes to raise an

ambitious technology fund

amid volatile markets. A

 Pimco investment chief

Daniel Ivascyn is in a

slump, hurt by a bet on

housing bonds and inves-

tors’ flight to safety. B

 Authorities are at odds

over what, if anything, they

can do to stop billions of il-

legal robocalls transmitted

over the internet. B

 Debt reduction at AT&T

and other companies is

helping the lowest group

of investment-grade bonds

to outpace other tiers. B

 A few industries are be-

hind rising leverage. B

 Nordstrom is suffering

the same fate as department

stores that innovated less

than the retailer did in areas

such as e-commerce. B

 Electronic Arts kicked

off the videogame industry’s

sports season with a strong

start for Madden NFL. B

 Chinese police are investi-

gating the presence of a gun

in a package shipped from the

U.S. to China via FedEx. B

Business&Finance

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