Apr. 11, 2014, 4:53 AM
- Japan's Cabinet has approved an unpopular plan to reinstate nuclear energy as an important source of electricity, although there are doubts about how big a role atomic power will be able to play.
- Japan may have to leave up to two-thirds of its 48 idled nuclear reactors closed, a Reuters analysis shows, due to the high cost of upgrades, local opposition or seismic risks.
- The country's nuclear plants were shut following the Fukushima disaster over three years ago, which has caused the country to significantly increase its energy imports. That has acted as a drag on GDP and prompted fears that Japan could suffer from a permanent current-account surplus which could undermine confidence in its massive debt.
- Relevant tickers: DNN, CCJ, USU, URRE, UEC, URG
- Japan ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, JYN, NKY, DBJP, EZJ, EWV, YCL, ITF, JPNL, JGBL, JPP, JGBT, JPNS, HEWJ, JGBB, FJP, URA
- Nuclear ETFs: URA, NLR, NUCL
Apr. 9, 2014, 2:21 PM
- The greenback hits session lows across the board following the dovish tilt to the FOMC minutes, with the takeaway being members seemed in less of a hurry to hike rates than the spin following the policy statement and Yellen press conference that day in mid-March.
- Higher on the session are the euro (FXE +0.4%), pound (FXB +0.1%), swissie (FXF +0.1%), aussie (FXA +0.2%), and loonie (FXC +0.4%). Flat on the session after being down earlier is the yen (FXY -0.2%).
- UUP -0.3%
- Dollar ETFs: UUP, UDN, DBV, FORX, UDNT, UUPT, USDU
- Related currency ETFs: FXE, FXY, FXA, EUO, YCS, FXB, ERO, JYN, GBB, DRR, CROC, YCL, EUFX, ULE, URR, GDAY
Apr. 8, 2014, 2:42 AM
- As expected, the Bank of Japan has left its key interest rate at 0.1% and maintained its program of expanding the monetary base by ¥60-70T ($580-680B) a year.
- The BOJ refrained from further easing and maintained its optimism about the economy despite concerns about the impact of a rise in sales tax that took effect last week.
- The "economy is continuing to recover moderately...albeit with some fluctuations due to the consumption tax hike," the bank said.
- Japan's current account swung back to a surplus for the first time in five months in February, with the number coming in at ¥612.7B from a record deficit of ¥1.59T in January, although the surplus was lower than consensus of ¥628B. There have been fears that the deficit could become permanent, which could weaken confidence in Japan's massive debt.
- The Nikkei closes -1.4%, while the USD-JPY is -0.3% at ¥102.80. (PR)
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JSC, ITF, JGBL, JPP, JPNL, JGBT, JPNS, FJP, JGBB
Apr. 1, 2014, 3:29 AM
- The Bank of Japan's Tankan survey of large-manufacturing sentiment increased for the fifth consecutive time, edging up to a seven-year high of 17 in Q1 from 16 in Q4 but slightly missing consensus of 18.
- The non-manufacturing index rose to 24 from 20, as expected.
- However, with sales tax increasing to 8% today from 5%, the manufacturing outlook print slumped to 8 from 14 and the non-manufacturing outlook dropped to 13 from 17. Both figures were worse than expected.
- In addition, big companies expect to increase capital spending by just 0.1% this fiscal year, which starts today, way below a previous reading of 3.9%.
- "There isn't much reason for companies to be optimistic," says economist Shinichiro Kobayashi. "The sales-tax hike is going to drag on the economy, and exports have been weaker than expected on the back of a slow global recovery." (PR)
- Meanwhile, Japanese shoppers went on a spending binge to stock up ahead of the tax hike.
- The Nikkei closed -0.2%, while the USD-JPY is +0.1% at ¥103.29.
- ETFs: DXJ, EWJ, FXY, YCS, EPP, JGBS, JGBD, AAXJ, NKY, JYN, DBJP, EZJ, EWV, GMF, YCL, AXJL, JPNL, ITF, JGBL, EEMA, JPP, JGBT, JPNS, PAF, JGBB, JPX, HEWJ, FPA, FJP, UXJ, DBAP
Mar. 19, 2014, 3:39 PM
- The FOMC does the ECB a favor with its hawkish tilt, taking the euro (FXE) down 0.8% to $1.3827. A check of other currencies finds them lower across the board vs. the greenback: Cable (FXB) -0.4%, yen (FXY) -1.1%, Swiss franc (FXF) -0.9%, loonie (FXC) -1%, aussie (FXA) -1%.
- ETFs: FXE, FXY, FXA, EUO, YCS, FXC, FXB, ERO, JYN, GBB, DRR, CROC, YCL, EUFX, ULE, URR, GDAY
Mar. 14, 2014, 3:10 AM
- The Nikkei leads Asian stocks lower following more weak Chinese economic data yesterday and amid increased tension in Ukraine, with the Japanese index slumping 3.3%. A sharp rise in the yen overnight didn't help matters.
- "Japan stocks often take the first hit on bad Asian news, then when the U.S. markets fall later, they react to that as well, resulting in a 'double whammy' effect," says hedge-fund manager Ed Rogers.
- Hong Kong shares are also suffering as the Hang Seng drops 0.9% and heads for its worst week since May 2012.
- Elsewhere in Asia, China -0.8% and Indian -0.9%.
- Meanwhile, Japanese industrial production rose 3.8% on month vs a prior estimate of +4%.
- On year, output +10.3% vs +10.6%.
- Capacity utilization +5.9% vs +2.2%.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, JYN, NKY, DBJP, EZJ, EWV, YCL, JPNL, ITF, JGBL, JPP, JGBT, JPNS, JGBB, HEWJ, FJP, EWH, EWHS, FCHI, FHK
Mar. 12, 2014, 2:59 AM
- Toyota (TM) has agreed to raise base salaries for its Japanese workers for the first time in six years amid soaring profits at the company, with staff set to receive an average increase of 2.9%.
- Other firms are also increasing wages, including Honda (HMC), Nissan (NSANF), Nippon Steel & Sumitomo Metal (NISTF), retailer Lawson and Daiwa Securities Group (DSEEY).
- The pay increases signal how major companies are paying heed to the government's exhortations to lift wages as part of the battle against deflation.
- Separately, Toyota has issued $1.75B of "green" bonds linked to auto loans that will be used to help finance vehicles that are powered by hybrid or alternative fuel.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, JYN, NKY, DBJP, EZJ, EWV, YCL, JPNL, ITF, JGBL, JPP, JGBT, JPNS, JGBB, HEWJ, FJP
Mar. 11, 2014, 2:44 AM
- As expected, the Bank of Japan has left its key interest rate at 0.1% and maintained its program of expanding the monetary base by ¥60-70T a year.
- The BOJ upgraded its assessment of industrial output and investment but cut its analysis for exports.
- In a related development, Japanese machine tool orders, a leading indicator of capex, climbed 26% on year in February, although that was down from +40.3% in January.
- The bank's latest policy decision comes ahead of a rise in sales tax next month that is expected to drag on the economy.
- The Nikkei is +0.7%, while the USD-JPY is flat at ¥103.31. (BOJ Statement)
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, YCL, SCJ, JGBL, JSC, JPP, ITF, DXJS, JGBT, JPNL, JPNS, FJP
Mar. 10, 2014, 2:36 AM
- Japan has revised down its Q4 GDP growth calculation to 0.2% from an initial 0.3%, with the economy held back by weaker-than-estimated capex and consumer spending.
- Annualized GDP was +0.7% vs +1%. (PR)
- The current-account deficit increased to a record ¥1.59T ($15.4B) in January from ¥638.6B in December. (PR)
- "Capital spending remains weak and exports are not coming back to strengthen the recovery, and without support in these areas, Japan's economy is going to contract significantly in the second quarter," says economist Yoshimasa Maruyama. "The negative effect from the (upcoming) sales tax rise could be worse than the BOJ and government expect."
- The Nikkei is -0.9%, while the USJ-JPY is -0.1% to ¥103.12.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JPNL, ITF, JSC, JGBL, JPP, JGBT, JPNS, HEWJ, JGBB, FJP
Mar. 7, 2014, 4:35 PM
Mar. 4, 2014, 3:58 AM
- Japanese wages have risen for the first time in almost two years, with base pay inching up 0.1% on year in January, although overall pay dropped 0.2%.
- Still, the increase in base pay should be encouraging for a government that has been exhorting companies to increase wages as part of the battle against deflation.
- The figures come as business and union leaders negotiate salaries for the next fiscal year.
- The Nikkei closes +0.4%, while the USD-JPY is +0.4% at ¥101.82.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JPNL, JSC, ITF, JGBL, JPP, JGBT, JPNS, HEWJ, JGBB, FJP
Mar. 3, 2014, 7:12 AM
- A check of currencies amid the Ukraine military tension finds money flowing, but not flooding, into the greenback. The dollar is +0.2% vs. the euro (FXE), +0.1% vs. cable, +0.5% vs. the yen (FXY), flat against the swissie (FXF), and up 0.3% vs. the loonie (FXC). The reactions in stocks, commodities, and fixed-income are far greater.
- Dollar ETFs: UUP, UDN, DBV, FORX, UDNT, UUPT, USDU
Feb. 28, 2014, 3:00 AM
- Japanese industrial production grew at the fastest pace since June 2011 in January, jumping 4% on month after a drop of 0.9% in December and surpassing consensus of +3%. Soaring production of transport equipment and machinery helped to boost output
- Construction orders surged 15.2% on year vs +4.9% previously.
- Retail sales leapt 4.4% vs +2.5% in December and expectations of +3.8%. On month, sales +1.4% vs -1.2% previously.
- Overall household spending +1.1% vs +0.7% prior and forecasts of +0.2%.
- The strong figures are not a total surprise, as a bump in economic activity has been expected ahead of a rise in sales tax in April, which is forecast to then drag on the economy.
- Meanwhile, core inflation, which excludes food prices, held steady at 1.3% on year in January, above consensus of 1.2%.
- Core core CPI, which excludes food and energy, stayed at a 16-year peak of 0.7%.
- Overall inflation slipped to 1.4% from 1.6% in December.
- The unemployment rate stayed at 3.7%, as expected, although the number of open positions increased to 1.04 for every person seeking work, the most since August 2007.
- The Nikkei falls 0.55%, while the USD-JPY is -0.4% at ¥101.70.
- ETFs: DXJ, EWJ, FXY, YCS, DFJ, JYN, DBJP, NKY, EZJ, EWV, YCL, SCJ, DXJS, JSC, ITF, JPP, JPNL, JPNS, FJP
Feb. 25, 2014, 3:57 AM
- Despite widespread opposition, Japan intends to revive nuclear energy as a major source of electricity, the government disclosed today in a draft document about its long-term energy strategy.
- Japan's nuclear plants were idled following the Fukushima disaster almost three years ago, which has caused the country to significantly increase its energy imports. That, in turn, has acted as a drag on GDP.
- The Nikkei is +1.4% and the yen is -0.2% at 102.34.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, JYN, NKY, DBJP, EZJ, EWV, YCL, ITF, JPNL, JGBL, JPP, JGBT, JPNS, HEWJ, JGBB, FJP, URA
Feb. 21, 2014, 7:36 AM
- Up 2.3% overnight, Japan's Topix reversed a 3% drop the night before, and capped its biggest weekly rally since November, up 3.3%.
- The Nikkei gained 2.9% last night. DXJ +1.1% premarket
- ¥2.6T in QE later, William Pesak notes one year of aggressive monetary ease has failed to lift living standards, nor has it convinced companies to boost paychecks. The only inflation Japan is feeling is the kind no one likes: Higher energy prices.
- BOJ Governor Kuroda's main achievement this year, argues Pesak, is to settle once and for al that the country's problem isn't the amount of yen sloshing around, but how it's used. Unless people borrow and banks lend, the economy won't revive. And don't forget the secular deflationary forces of an aging population and the rise of China.
- ETFs: DXJ, EWJ, FXY, YCS, DFJ, JYN, NKY, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JSC, ITF, JPNL, JPP, JPNS, HEWJ, FJP
Feb. 20, 2014, 2:42 AM
- Japan's trade deficit more than doubled to a record ¥2.79T ($27.3B) in January from ¥1.3T in December and exceeded consensus of ¥2.49T.
- Export growth slowed to 9.5% on year from 15.3% and sharply missed expectations of 12.6%.
- Imports, though, soared 25% vs 24.7% and 21.8%, driven up by the weak yen and significant energy needs because of the closure of the nuclear-power industry.
- The large trade deficit contributed to GDP expanding at a lower-than-expected 1% in Q4.
- "If the economy weakens further after a sales tax hike (in April), policymakers could resort to fiscal stimulus as early as summer," says economist Yasuo Yamamoto.
- However, the trade figures may have been affected by a rush to purchase foreign-made goods before the tax increase and by the Chinese New Year.
- The Nikkei is -2.15% while the USD-JPY is -0.5% at ¥101.80. (PR)
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JSC, ITF, JPNL, JGBL, JPP, JGBT, JPNS, HEWJ, FJP, JGBB
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