Aug. 27, 2013, 7:49 AM
- Moving along with the precious metals over Syrian tension is crude oil, with both WTI crude (USO) and Brent (BNO) up more than 1.6%. WTI at $107.50 per barrel is threatening to take out levels last seen in the Spring of 2011.
- The greenback is also catching a bid, moderately higher against the euro (FXE), cable (FXB), and the loonie (FXC), but sharply higher vs. the aussie (FXA). The dollar is losing a good bit of ground against the yen (FXY), and off just a bit vs. the Swiss franc (FXF).
- Dollar ETFs: UUP, UUPT, UDN, UDNT.
- Related currency ETFs: FXE, ERO, ULE, URR, EUO, DRR, EUFX, GBB, YCL, YCS, JYN.
- Oil ETFs: OIL, USO, DBO, OLO, USL, CRUD, UCO, DTO, SCO, SZO, DNO, UWTI, DWTI, BNO, UOIL, DOIL.
Aug. 27, 2013, 5:03 AM
- Japan's Ministry of Finance reportedly wants to allocate a record ¥25.3T ($257B) just to service the country's mammoth debt of ¥1,000T ($10T) - which is double the size of its economy - for the next fiscal year.
- The expected provision is 13.7% higher than for this FY, indicating how the ministry wants to guard against a possible rise in long-term interest rates.
- The speculation comes as Japan debates whether to increase sales tax, a move seen as important for dealing with the country's debt but also as possibly hurting its nascent growth.
- ETFs - Stocks: EWJ, NKY, EWV, EZJ, ITF, JSC, JPP, DXJ, SCJ, DFJ, FJP, JPNL, JPNS, DXJS. Bonds: JGBT, JGBL, JGBS, JGBD. Currency: FXY, JYN, YCL, YCS
Aug. 27, 2013, 4:18 AM
- Asian shares are mostly lower after John Kerry signaled that the U.S. could take military action against Syria due to strong suspicions that the latter used chemical weapons against its citizens.
- The Turkish lira hits a record low of 2.0163 to the dollar, although the yen is up, with the USD-JPY -0.7% at 97.85.
- "It's a risk-off story because of Syria and also if you see broad repatriation from emerging-markets currencies, the yen will benefit," says Michael Turner, a strategist at RBC.
- However, Chinese shares are higher following positive data for industrial profits.
- Japan -0.7%, Hong Kong -0.5%, China +0.3%, India -2.8%, Turkey (TUR) -2.9%.
- Japanese ETFs - Stocks: EWJ, NKY, EWV, EZJ, ITF, JSC, JPP, DXJ, SCJ, DFJ, FJP, JPNL, JPNS, DXJS. Bonds: JGBT, JGBL, JGBS, JGBD. Currency: FXY, JYN, YCL, YCS
Aug. 19, 2013, 4:56 AM
- The 12.2% rise in exports was the fastest since December 2010, with the weak yen helping to boost sales of cars and electronics. Sales to the U.S. +18.4%, to China +9.5%, to the EU +16.6%.
- "The details are encouraging because you can see that exports to Japan's main markets are bouncing back," says economist Hiroaki Muto.
- The 19.6% jump in imports was the largest gain in three years, due to the weak yen and increasing oil prices.
- The trade deficit of ¥1.02T was the third-largest ever. "This is a pretty big deficit and a negative for Japanese companies that will suffer from rising costs," says Yoshiki Shinke of Dai-ichi Life Research.
- ETFs - Stocks: EWJ, NKY, EWV, EZJ, ITF, JSC, JPP, DXJ, SCJ, DFJ, FJP, JPNL, JPNS, DXJS. Bonds: JGBT, JGBL, JGBS, JGBD. Currency: FXY, JYN, YCL, YCS.
Aug. 15, 2013, 4:38 PM
- Rising rates, the decline in stocks, and escalating violence in Egypt provided no bid for the greenback which fell across the board today.
- The dollar (UUP -0.7%) lost more than 1% against the Swiss franc (FXF +1%) and nearly 1% vs. the yen (FXY +0.8%) and cable (FXB +0.9%). The euro (FXE +0.7%) gained nearly three quarters of one percent.
- Typically the first to sell off when markets get a bit panicky, even the loonie (FXC +0.2%) and the aussie (FXA) picked up ground against the U.S. unit.
- A reason? Maybe the commodity sector (DBC +1%) - it was notably strong with metals, energy, and the grains all higher.
- Related dollar ETFs: UUPT, UDN, UDNT.
- Broad commodity ETFs: DJP, GSP, LSC, RJI, GSC, GCC, GSG, DBC, DPU, DJCI, UCI, USCI, DYY, UCD, DEE, CMD, DDP, RGRC, CTF, CFD CSCR, CSCB.
Aug. 15, 2013, 4:03 AM
- Reducing Japan's corporate tax rate wouldn't have an immediate impact on the economy, Finance Minister Taro Aso says, as only around 30% of firms pay such taxes.
- Rather, the government should consider tax breaks to promote capex and business investment. Economics Minister Akira Amari echoed those remarks.
- In addition, Chief Cabinet Secretary Yoshihide Suga denied that Prime Minister Shinzo Abe has told ministers to consider reducing the corporate tax rate.
- There has speculation that the government is considering the cut in order to offset a planned two-step rise in sales tax amid fears that such an increase would harm the economy as it begins to recover from deflation.
- The Nikkei falls 2.1% while the dollar drops 0.2% vs the yen following the remarks. A lack of clarity about when the Fed might start tapering is also hurting the dollar.
- Japan ETFs - Stocks: EWJ, NKY, EWV, EZJ, ITF, JSC, JPP, DXJ, SCJ, DFJ, FJP, JPNL, JPNS, DXJS. Bonds: JGBT, JGBL, JGBS, JGBD. Currency: FXY, JYN, YCL, YCS
Aug. 13, 2013, 7:29 AM
- The yen falls sharply vs. the greenback with dollar/yen +1.1% to ¥98.00 following a report Shinzo Abe's government is considering a corporate tax cut.
- The idea to cut the corporate tax comes as the government increasingly looks to be moving forward with a big hike in the national sales tax - a momentum-killer for the Japanese economy on more than one occasion throughout these two lost decades. A note from JPMorgan this morning has that desk believing the boost will go through as expected, with a final decision coming in October.
- FXY -0.6% premarket. Other yen ETFs: YCL, YCS, JYN.
- The news also boosted stocks, with the Topix climbing 2%. Even after struggling for the last quarter, the Topix is 35% higher on the year. It trades at 1.2x book value compared to 2.5% for the S&P 500 and 1.7% for the Stoxx Europe 600.
- DXJ +0.4%, EWJ +0.7% premarket. Other equity ETFs: EWJ, NKY, EWV, EZJ, ITF, JSC, JPP, DXJ, SCJ, DFJ, FJP, JPNL, JPNS, DXJS.
- JGB ETFs: JGBT, JGBL, JGBS, JGBD.
Aug. 12, 2013, 2:58 AM
- Capital expenditure unexpectedly fell for the sixth consecutive quarter, dropping 0.1% on quarter vs consensus of +0.7.
- Private consumption +0.8% vs forecasts of +0.5%, boosted by spending on food, travel and consumer electronics.
- External demand contributed 0.2 percentage point to growth and domestic demand 0.5 point.
- The worse-than-expected GDP has intensified the debate about a proposed increase in sales tax. "There is no need to raise the sales tax in a hurry," says Koichi Hamada, a key adviser to Prime Minister Shinzo Abe. Doing so "as scheduled might hurt the economy."
- ETFs - Stocks EWJ, NKY, EWV, EZJ, ITF, JSC, JPP, DXJ, SCJ, DFJ, FJP, JPNL, DXJS, JPNS. Bonds: JGBT, JGBL, JGBS, JGBD. Forex: FXY, JYN, YCL, YCS
Aug. 7, 2013, 12:47 PM
- Morgan Stanley returns to the bullish dollar camp only a few months after turning bearish on the greenback ahead of its early-summer tumble.
- "The trend in the dollar is clearly to the upside," says the bank's head of FX strategy, Hans Redeker, who sees the dollar strengthening to $1.26 per euro (FXE) and 107 yen (FXY) by year's end.
- Redeker says the reasoning for his previous bearish stance was the need for a "pause" in the rampant dollar bullishness of late spring.
- Dollar ETFs: UUP, UDN. Leveraged dollar ETFs: UUPT, UDNT.
- Other euro ETFs: ULE, ERO, URR, DRR, EUO.
- Other yen ETFs: YCL, YCS, JYN.
Aug. 7, 2013, 5:03 AM
- Japanese shares (DXJ) drop 4% and lead Asian stocks lower after two Fed policy makers, including the dovish Charles Evans, said the U.S. central bank could start tapering as early as next month.
- The remarks sent the dollar lower against the yen, which in turn helped drag down the Nikkei. The USD-JPY (FXY) is now -0.8% at ¥96.98.
- Other Asian bourses were also hit, with Hong Kong -1.5%, China -0.7% and India -0.1%.
Aug. 5, 2013, 4:35 AM
- Japanese shares (DXJ) drop 1.4% as the yen continues to weaken against the dollar following Friday's U.S. jobs report, which appears to have supported those who believe the Fed will delay its tapering.
- The USD/JPY (FXY) is -0.5% at ¥98.47.
- Stocks rise elsewhere in Asia, with equities in China (FXI) supported by a report that the country may relax its one-child policy.
- Hong Kong +0.1%, China +1%, India +0.35%.
Jul. 29, 2013, 4:11 AM
- Japanese shares (DXJ) lead Asian stocks lower as the yen (FXY) increases against the dollar ahead of the Fed's monetary policy meetings this week, when it's expected to keep its QE program in place for some time to come.
- The yen is also stronger on fears about China's (FXI) slowing growth and rising credit, factors that are weighing on sentiment in Shanghai as well.
- The Nikkei is also being pulled down by a possible delay or watering down a proposed increase in sales tax, which is seen as vital to help reduce Japan's debt load.
- Japan -3.3%, Hong Kong -0.5%, China -1.7%, India -0.6%.
Jul. 26, 2013, 7:43 AMThe yen (FXY) gains 0.7% - dollar yen falling to ¥98.59 - after Japanese inflation rose 0.4% in June, the sharpest rise since June 2008, fueling ideas the BOJ's stimulus "may be working," says Credit Agricole FX chief Yuji Salito. If it is working now, that means less of it in the future, and the Nikkei tumbles 3%. EWJ -1.6%, DXJ -1.8% premarket. | Jul. 26, 2013, 7:43 AM | 1 Comment
Jul. 24, 2013, 2:47 AMJapanese exports increased for a fourth consecutive month in June, rising 7.4% on year vs +10.1% in May and consensus of +10.3%; imports +11.8% vs +10.1% and +13.6%; trade deficit ¥180.8B vs ¥996.4B and ¥160.6B. Exports to U.S. +14.6%, to China +4.8%, to the EU +8.6%, the first gain in 21 months. "The effect of the yen's weakness on exports is becoming very clear," says RBS economist Junko Nishioka. "We can be optimistic about the Japanese economy's outlook as long as the U.S. stays in a good shape." USD-JPY (FXY) +0.4% to ¥99.87. (PR) | Jul. 24, 2013, 2:47 AM | Comment!
Jul. 22, 2013, 3:33 PMThe yen's (FXY +0.8%) surge is a clear case of buy the rumor, sell the fact, says Deutshce following the LDP's big victory in upper house elections overnight. The results give the party of PM Shinzo Abe control of both chambers of the Diet, paving the way to push through his reform agenda. There are several implications, but the bottom line is it "removes another hurdle to investors being long Dollar/yen." FXY is the most popular yen ETF, but leverage fans might have a look at YCL (leveraged long yen) and YCS (leveraged short yen). If the yen does head lower, it could give a charge to the formerly red-hot but recently stalled Hedged Japan Equity ETF (DXJ -0.5%) and its sponsor WisdomTree (WETF +3.7%).
| Jul. 22, 2013, 3:33 PM | Comment!
Jul. 18, 2013, 4:21 AMAsian shares are mixed, with Japanese stocks (DXJ) rising 1.3% as the yen (FXY) falls 0.7% against the dollar following Ben Bernanke's comments yesterday that QE is still set to end by mid-2014. However, Chinese (FXI) and Hong Kong (EWH) shares drop after a rise in Chinese house prices sparked renewed fears about an overheating property market. Hong Kong -0.1%, China -1.1%, India +0.3%. | Jul. 18, 2013, 4:21 AM | Comment!
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