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. | 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) | 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. 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%. | Comment!
Jul. 10, 2013, 10:48 AMThe yen (FXY +0.7%) is nicely higher vs. the dollar as investors pare bets the BOJ will ease further amid the beginning of a 2-day policy meeting last night. A majority of economist surveyed by Bloomberg expect no additional action from the BOJ, a reversal of what was believed 2 months ago. "The economy is proving (BOJ Gov.) Kuroda right," says one economist. "This is the first time in awhile that the BOJ doesn't have to boost stimulus." Japanse stocks: EWJ -0.3%, DXJ -0.8%. | Comment!
Jul. 2, 2013, 8:38 AM
Jun. 24, 2013, 8:25 AMBOJ Deputy Governor Kikuo Iwata - a forceful proponent of monetary ease - says the bank has no plans to step in over temporary market turbulence and would only consider additional easing were there a long-term decline in price expectations. Remember the central bank drill: Talk tough, talk tough, cave. EWJ -3.4, DXJ -3.6% premarket. The yen (FXY) is weaker by 0.4%, dollar/yen at ¥98.22. | Comment!
Jun. 21, 2013, 4:05 AM
Jun. 20, 2013, 3:09 AMThe dollar strengthens across the board following the Ben Bernanke Show yesterday. "Bernanke was more explicit than markets had expected. Rising U.S. yields will spur broad dollar buying. The dollar's direction is now set," says Credit Agricole's Yuji Saito. USD-JPY (FXY) +1.1%, USD-EUR +0.3%, USD-GBP (GBB) +0.3%, USD-AUD +0.6%. | 2 Comments
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