Asia – Business News Updates https://newsdaily.business Wed, 25 Jan 2023 11:32:39 +0000 en hourly 1 https://wordpress.org/?v=6.4.3 https://newsdaily.business/wp-content/uploads/2021/02/cropped-handshake-hand-gesture-dollar-money-finance-coin_96px-32x32.png Asia - Business News Updates https://newsdaily.business 32 32 Pakistani rupee falls after market maker group removes currency cap https://newsdaily.business/2023/01/25/pakistani-rupee-falls-after-market-maker-group-removes-currency-cap/ https://newsdaily.business/2023/01/25/pakistani-rupee-falls-after-market-maker-group-removes-currency-cap/#respond Wed, 25 Jan 2023 11:32:39 +0000 https://newsdaily.business/2023/01/25/pakistani-rupee-falls-after-market-maker-group-removes-currency-cap/ IMF wants Pakistan to adopt market based exchange rate Pakistan desperately needs IMF funding Banks to be told to supply dollars to exchange companies Artificial cap at Pakistani rupee encouraged black market FinMin Ishaq Dar’s bids to defend rupee counter to IMF advice KARACHI, Pakistan, Jan 25 (Reuters) – The Pakistani rupee weakened by 1.2% […]]]>


  • IMF wants Pakistan to adopt market based exchange rate
  • Pakistan desperately needs IMF funding
  • Banks to be told to supply dollars to exchange companies
  • Artificial cap at Pakistani rupee encouraged black market
  • FinMin Ishaq Dar’s bids to defend rupee counter to IMF advice

KARACHI, Pakistan, Jan 25 (Reuters) – The Pakistani rupee weakened by 1.2% on Wednesday after foreign exchange companies removed a cap on the currency, saying it caused “artificial” distortions for an economy in desperate need of International Monetary Fund help.

The move towards a market-based exchange rate should please the IMF, as that is one of the conditions that the multilateral lender has set before it agrees to unlock a stalled bail-out programme for Pakistan.

Finance Minister Ishaq Dar’s attempts to defend the rupee, including currency market intervention, had run counter to the IMF’s advice.

Battling the highest inflation in decades, the central bank has raised interest rates sharply, but the country has barely enough foreign exchange reserves to cover three weeks of imports and is struggling to meet its external financing obligations.

The Exchange Companies Association of Pakistan (ECAP) said late on Tuesday it was lifting the cap on the currency in the interest of the country.

“We have decided that we bring the exchange rate at par (with) what we are supplying to the banks against credit cards,” ECAP Secretary General Zafar Paracha said in a statement, adding that level is 255/256 rupees to the dollar.

The rupee was bid at 240.60 to the U.S. dollar and offered at 243 in early open market trade on Wednesday, ECAP said in a statement, compared with a range of 237.75/240 at the close on Tuesday.

So far, the rupee has depreciated 11.23% against the dollar during the 2022-23 fiscal year, which ends on June 30.

Before the cap on the rupee was removed, markets eyed three different rates to assess its value — the state bank’s official rate, the one assessed by the foreign exchange companies and the black market rate.

“Though the bank rate for today is not been disclosed yet, we think the dollar rate in banks may fall by up to 5% in few days,” said Mohammed Sohail, chief executive officer at brokerage Topline Securities.

ECAP President Malik Bostan told Reuters that the central bank had given an assurance at a meeting that commercial banks would be instructed to supply exchange companies with dollars within a week.

“We’re facing a shortage. We do not have physical dollars,” Bostan said. “People aren’t selling dollars. They’re only buying.”

He said the removal of the cap would curb black market trade, though it would take time to bridge the gap.

“The black market rate is still sticky in the range of 260-270. The decision of exchange companies has not had any impact as such,” said Fahad Rauf, head of research at Ismail Iqbal Securities.

Stock market investors responded positively to the decision to remove the currency cap, with the Pakistan Stock Exchange’s (PSX) benchmark index (.KSE) rising 1.77%. Topline’s Sohail said investors hoped the removal of the cap would help to persuade the IMF to resume disbursements.

The IMF is yet to approve its ninth review to release $1.1 billion, which was originally due to be disbursed in November last year. The Fund wants Pakistan to cut subsidies, slash energy sector debt and levy more taxes to reduce the budget deficit, and make the transition to a market-based exchange rate.

Prime Minister Shehbaz Sharif said on Tuesday that his country was willing to discuss all of the IMF’s demands.

Writing and reporting by Asif Shahzad in Islamabad; Editing by Kim Coghill & Simon Cameron-Moore

Our Standards: The Thomson Reuters Trust Principles.



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2023-01-25 10:46:00

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Morning Bid: It’s all about the weather https://newsdaily.business/2023/01/24/morning-bid-its-all-about-the-weather/ https://newsdaily.business/2023/01/24/morning-bid-its-all-about-the-weather/#respond Tue, 24 Jan 2023 05:43:10 +0000 https://newsdaily.business/2023/01/24/morning-bid-its-all-about-the-weather/ A look at the day ahead in European and global markets from Wayne Cole. It’s been another quiet session in Asia with many markets still on holiday. Japan was open and the BOJ’s dogged defence of Yield Curve Control seems to be working with 10-year yields holding around 0.39% and away from the 0.5% ceiling. […]]]>


A look at the day ahead in European and global markets from Wayne Cole.

It’s been another quiet session in Asia with many markets still on holiday. Japan was open and the BOJ’s dogged defence of Yield Curve Control seems to be working with 10-year yields holding around 0.39% and away from the 0.5% ceiling.

Notably, the BOJ’s new 1 trillion yen ($7.7 billion) offer of five-year funds on Monday drew bids for three times as much, suggesting this could prove a useful method of injecting added liquidity into the market. Essentially banks could borrow at an average 0.145% fixed for five years to invest in JGBs – what could go wrong?

With spreads widening against the yen, the USD has gained 1.7% in the past two sessions and stands around 130.30, while the AUD is up over 3% as an old favourite of the carry trade.

The euro hasn’t been able to regain its $1.0927 top but did find support at $1.0850. Bulls are hoping the flash S&P global surveys on Tuesday will confirm the EU economy is currently faring better than the United States, in a reversal of fortunes.

The EU manufacturing PMI is seen edging up to 48.5 in early January from 47.8, and services to 50.2 from 49.8, reflecting in part sharply lower gas prices and the relatively warm winter so far.

JPMorgan is forecasting NWE gas storage will be 56% full at the end of winter, nearly 30%-points higher than the five-year average and a drag on prices.

The U.S. manufacturing PMI is forecast to dip to 46.0 from 46.2, with services at 45.0 from 44.7. Ironically, the weather in the States in recent weeks has been a lot worse than in Europe, which was not how this story was supposed to pan out.

Elsewhere, U.S. stock futures have been becalmed in Asia after rallying overnight. Nasdaq futures gained 2% led by semiconductor and other tech stocks, with some suggesting the recent run of job layoffs in the sector represents a new focus on cutting costs and lifting profits.

Microsoft reports after the bell with the focus on how its cloud and enterprise units are doing, though its reported $10 billion investment in OpenAI is likely to get more column inches in the media. Others reporting include Johnson & Johnson, Verizon and Texas Instruments.

Key developments that could influence markets on Tuesday:

– ECB head Lagarde speaks, but a video message at a roundtable on “The euro as a guarantee of resilience” doesn’t sound exactly market moving.

($1 = 130.2100 yen)

Reporting by Wayne Cole; Editing by Jacqueline Wong

Our Standards: The Thomson Reuters Trust Principles.



Read More:Morning Bid: It’s all about the weather

2023-01-24 05:32:00

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Iranian currency falls to record low amid isolation and sanctions https://newsdaily.business/2023/01/21/iranian-currency-falls-to-record-low-amid-isolation-and-sanctions/ https://newsdaily.business/2023/01/21/iranian-currency-falls-to-record-low-amid-isolation-and-sanctions/#respond Sat, 21 Jan 2023 17:15:30 +0000 https://newsdaily.business/2023/01/21/iranian-currency-falls-to-record-low-amid-isolation-and-sanctions/ DUBAI, Jan 21 (Reuters) – Iran’s troubled currency fell to a record low against the U.S. dollar on Saturday amid the country’s increasing isolation and possible Europe Union sanctions against Tehran’s Revolutionary Guards or some of its members. Ties between the EU and Tehran have deteriorated in recent months as efforts to revive nuclear talks […]]]>


DUBAI, Jan 21 (Reuters) – Iran’s troubled currency fell to a record low against the U.S. dollar on Saturday amid the country’s increasing isolation and possible Europe Union sanctions against Tehran’s Revolutionary Guards or some of its members.

Ties between the EU and Tehran have deteriorated in recent months as efforts to revive nuclear talks have stalled. Iran has detained several European nationals and the bloc has become increasingly critical of the violent treatment of protesters and the use of executions.

The EU is discussing a fourth round of sanctions against Iran and diplomatic sources have said members of the Revolutionary Guards will be added to the bloc’s sanctions list next week. But some EU member states want to go further and classify the Guards as a whole as a terrorist organisation.

The dollar was selling for as much as 447,000 rials on Iran’s unofficial market on Saturday, compared with 430,500 the previous day, according to the foreign exchange site Bonbast.com.

The rial has lost 29% of its value since nationwide protests following the death in police custody of a 22-year-old Kurdish Iranian woman, Mahsa Amini, on Sept. 16.

The unrest has posed one of the biggest challenges to theocratic rule in Iran since the 1979 Islamic Revolution.

The economic Ecoiran website blamed the continued fall of the rial on an apparent “global consensus” against Iran.

“Increasing political pressures, such as placing the Revolutionary Guards on a list of terrorist organisations, and imposing restrictions on Iran-linked ships and oil tankers… are factors pointing to a global consensus against Iran, (which may affect) the dollar’s rate in Tehran,” Ecoiran said.

The European Parliament called on Wednesday for the EU to list Iran’s Guards as a terrorist group, blaming the powerful force for the repression of protesters and the supply of drones to Russia. The assembly cannot compel the EU to add the force to its list, but the text was a clear political message to Tehran.

Panama’s vessel registry, the world’s largest, has withdrawn its flag from 136 ships linked to Iran’s state oil company in the last four years, the country’s maritime authority said this week. read more

Iran’s central bank governor Mohammad Reza Farzin on Saturday blamed the fall of the rial on “psychological operations” which Tehran says its enemies are organising to destabilise the Islamic Republic.

“Today, the central bank faces no restrictions in terms of foreign currency and gold resources and reserves, and media deceit and psychological operations are the main factors behind the fluctuation in the free exchange rate,” state broadcaster IRIB cited Farzin as saying.

Facing an inflation rate of about 50%, Iranians seeking safe havens for their savings have been trying to buy dollars, other hard currencies or gold.

Reporting by Dubai newsroom

Our Standards: The Thomson Reuters Trust Principles.



Read More:Iranian currency falls to record low amid isolation and sanctions

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China reopening spurs record inflows into emerging market funds -BofA https://newsdaily.business/2023/01/20/china-reopening-spurs-record-inflows-into-emerging-market-funds-bofa/ https://newsdaily.business/2023/01/20/china-reopening-spurs-record-inflows-into-emerging-market-funds-bofa/#respond Fri, 20 Jan 2023 23:29:16 +0000 https://newsdaily.business/2023/01/20/china-reopening-spurs-record-inflows-into-emerging-market-funds-bofa/ LONDON, Jan 20 (Reuters) – Investors poured a record $12.7 billion into emerging-market debt and equity funds in the week to Wednesday, in response to China’s easing of its COVID-19 restrictions on activity, data on Friday from BofA Global Research showed. The sudden shift in Chinese policy has boosted many different asset classes, from commodities […]]]>


LONDON, Jan 20 (Reuters) – Investors poured a record $12.7 billion into emerging-market debt and equity funds in the week to Wednesday, in response to China’s easing of its COVID-19 restrictions on activity, data on Friday from BofA Global Research showed.

The sudden shift in Chinese policy has boosted many different asset classes, from commodities and mining stocks to currencies and equity markets in popular tourist destinations.

Hong Kong’s share benchmark, the Hang Seng Index (.HSI) closed on Friday at an over six-month high ahead of the Lunar New Year Holiday. Chinese onshore blue chips (.CSI300) went into the break at a five-month peak.

The BofA data also showed weekly flows of $14.4 billion into bond funds, $7.5 billion into equities, $0.6 billion into cash and $0.6 billion from gold.

European equities witnessed their first weekly inflow in almost a year. BofA said there were $0.2 billion of inflows to European stock funds, the first inflows in 49 weeks.

Europe has benefited both from China’s reopening as well as recent declines in gas prices.

BofA’s “Bull & Bear indicator” is at 3.5, a 10-month high driven by the inflows into emerging markets.

Nonetheless, the note also says that markets are still facing several major uncertainties despite the recent optimism, as central banks near the end of their aggressive interest rate hikes, as well as the possibility of an economic “hard landing” and political tension in the United States around its debt ceiling.

“We are in the trickiest part of the investment cycle: tightening ending but easing far from beginning, inflation over but recession not yet begun, China reopen vs US recession…little wonder Wall St narratives (are) changing quicker than a TikTok video,” it said.

Reporting by Alun John, editing by Amanda Cooper and Emelia Sithole-Matarise

Our Standards: The Thomson Reuters Trust Principles.



Read More:China reopening spurs record inflows into emerging market funds -BofA

2023-01-20 22:24:00

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Crypto lending unit of Genesis files for U.S. bankruptcy https://newsdaily.business/2023/01/20/crypto-lending-unit-of-genesis-files-for-u-s-bankruptcy/ https://newsdaily.business/2023/01/20/crypto-lending-unit-of-genesis-files-for-u-s-bankruptcy/#respond Fri, 20 Jan 2023 17:50:19 +0000 https://newsdaily.business/2023/01/20/crypto-lending-unit-of-genesis-files-for-u-s-bankruptcy/ Jan 20 (Reuters) – The lending unit of crypto firm Genesis filed for U.S. bankruptcy protection on Thursday, owing creditors at least $3.4 billion, after being toppled by a market rout along with the likes of exchange FTX and lender BlockFi. Genesis Global Capital, one of the largest crypto lenders, froze customer redemptions on Nov. […]]]>


Jan 20 (Reuters) – The lending unit of crypto firm Genesis filed for U.S. bankruptcy protection on Thursday, owing creditors at least $3.4 billion, after being toppled by a market rout along with the likes of exchange FTX and lender BlockFi.

Genesis Global Capital, one of the largest crypto lenders, froze customer redemptions on Nov. 16 after the collapse of major exchange FTX sent shockwaves through the crypto asset industry, fuelling concern that other companies could implode.

Genesis is owned by venture capital firm Digital Currency Group (DCG).

Its bankruptcy filing is the latest in a string of crypto failures triggered by a market collapse that wiped about $1.3 trillion off the value of crypto tokens last year. While bitcoin has rallied so far in 2023, the impact of the market collapse has continued to hit companies in the highly interconnected sector.

The bankruptcy “doesn’t come as a shock to the markets,” said Ivan Kachkovski, currency and crypto strategist at UBS. “It remains to be seen if the chain effect would go on.”

“However, given that the funds have already been frozen for over two months and no other large crypto company reported an associated weakness, it’s likely that the contagion would be limited.”

Genesis’ lending unit said it had both assets and liabilities in the range of $1 billion to $10 billion, and estimated it had more than 100,000 creditors in its filing with the U.S. Bankruptcy Court for the Southern District of New York.

Genesis Global Holdco, the parent group of Genesis Global Capital, also filed for bankruptcy protection, along with another lending unit Genesis Asia Pacific.

Genesis Global Holdco said in a statement that it would contemplate a potential sale, or a stock-related transaction, to pay creditors, and that it had $150 million in cash to support the restructuring.

It added that Genesis’ derivatives and spot trading, broker dealer and custody businesses were not part of the bankruptcy process, and would continue their client trading operations.

CREDITORS’ CLAIMS

Genesis owes its 50 biggest creditors $3.4 billion, according to Reuters’ calculations from the bankruptcy filing. Its largest creditor is crypto exchange Gemini, which it owes $765.9 million. Gemini was founded by the identical twin cryptocurrency pioneers Cameron and Tyler Winklevoss.

Genesis was already locked in a dispute with Gemini over a crypto lending product called Earn that the two firms jointly offered to Gemini customers.

The Winklevoss twins have said Genesis owed more than $900 million to some 340,000 Earn investors. On Jan. 10, Cameron Winklevoss called for the removal of Barry Silbert as the chief executive of Digital Currency Group.

Representations of cryptocurrencies are seen in front of displayed decreasing stock graph in this illustration taken November 10, 2022. REUTERS/Dado Ruvic/Illustration

About an hour after the bankruptcy filing, Cameron Winklevoss tweeted that Silbert and Digital Currency Group continued to deny creditors a fair deal.

“Unless Barry (Silbert) and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently,” Winklevoss said in his tweet thread.

DCG did not immediately respond to a Reuters request for comment on the tweets.

Amsterdam-based crypto exchange Bitvavo, said in December it was trying to recover 280 million euros ($302.93 million) which it had lent to Genesis.

Bitvavo said in a blog post on Friday that talks on the repayment “have not yet led to an overall agreement that works for all parties concerned” and that it would continue to negotiate.

The bankruptcy filing “brings the process of negotiations to calmer waters,” Bitvavo said.

LENDING BUSINESS

Genesis brokered digital assets for financial institutions such as hedge funds and asset managers and had almost $3 billion in total active loans at the end of the third quarter, down from $11.1 billion a year earlier, according to its website.

Last year, Genesis extended $130.6 billion in crypto loans and traded $116.5 billion in assets, according to its website.

Its two biggest borrowers were Three Arrows Capital, a Singapore-based crypto hedge fund, and Alameda Research, a trading company closely affiliated with FTX, a source told Reuters. Both are in bankruptcy proceedings.

Three Arrows debt to Genesis was assumed by its parent company Digital Currency Group (DCG), which then filed a claim against Three Arrows. DCG’s portfolio companies also include crypto asset manager Grayscale and news service CoinDesk.

Crypto lenders, which acted as the de facto banks, boomed during the pandemic. But unlike traditional banks, they are not required to hold capital cushions. Earlier this year, a shortfall of collateral forced some lenders – and their customers – to shoulder large losses.

($1 = 0.9243 euros)

Reporting by Tom Hals in Wilmington, Delaware, Akanksha Khushi, and Elizabeth Howcroft in London; Editing by Lananh Nguyen, Clarence Fernandez, Kim Coghill, Ira Iosebashvili and Sharon Singleton

Our Standards: The Thomson Reuters Trust Principles.



Read More:Crypto lending unit of Genesis files for U.S. bankruptcy

2023-01-20 17:28:00

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Davos 2023: Big oil comes in from the cold on energy transition https://newsdaily.business/2023/01/20/davos-2023-big-oil-comes-in-from-the-cold-on-energy-transition/ https://newsdaily.business/2023/01/20/davos-2023-big-oil-comes-in-from-the-cold-on-energy-transition/#respond Fri, 20 Jan 2023 16:11:15 +0000 https://newsdaily.business/2023/01/20/davos-2023-big-oil-comes-in-from-the-cold-on-energy-transition/ Energy transition front and centre at Davos meeting Europe energy crisis forces moment of reckoning Climate activists sceptical of oil industry inclusion DAVOS, Switzerland, Jan 20 (Reuters) – A different type of energy transition has taken place at this year’s World Economic Forum (WEF) meeting. Unlike 2021’s COP26 climate conference in Glasgow, where oil and […]]]>


  • Energy transition front and centre at Davos meeting
  • Europe energy crisis forces moment of reckoning
  • Climate activists sceptical of oil industry inclusion

DAVOS, Switzerland, Jan 20 (Reuters) – A different type of energy transition has taken place at this year’s World Economic Forum (WEF) meeting.

Unlike 2021’s COP26 climate conference in Glasgow, where oil and gas executives were personae non gratae, fossil fuel chiefs and renewable energy bosses sat cheek by jowl in Davos.

Activists like Greta Thunberg don’t like it. But some in the solar, wind and hydro industry are warming to the carbon crowd.

Tejpreet Chopra, who heads one of India’s clean energy firms Bharat Light and Power, was surprised to be invited to a side-event with more than 60 top oil and gas executives.

“The course of this transition will have to take a more inclusive approach until we all get to the finish line of where we all want to be,” he told Reuters.

This shift, partly triggered by the energy crunch after Russia’s invasion of Ukraine, has been front and centre in Davos, where United Nations Secretary-General Antonio Guterres dedicated his speech to it.

As soaring prices drove up inflation, forced industries to shut production and hiked energy bills, European leaders reversed plans to cut down on investments in new fossil fuels.

OPEC Secretary General Haitham Al Ghais, who was in Davos this week, has warned that the sheer magnitude of economic growth means energy demand cannot be met by renewables alone.

That message, echoed by many in the industry, be it traditional fossil fuel producers or renewable energy throughout the past year, found a bullhorn at this year’s WEF.

“Certainly the war (in Ukraine) added a premium but the root cause is structural,” Joseph McMonigle, Secretary General of the International Energy Forum, told Reuters.

“We’ve tried to limit supply, whereas demand is not decreasing,” he added.

The Organization of Petroleum Exporting Countries (OPEC), in its 2022 World Oil Outlook, estimated $12.1 trillion would be needed to be invested to meet oil demand to 2045 to avert energy crises.

Thunberg’s was not the only voice at Davos with strong objections to the industry’s new mantra that the energy crisis justifies new oil investments.

International Energy Agency (IEA) chief Fatih Birol, in a meeting with Thunberg on the sidelines of WEF, said that new investments in oil fields would take years to become operational. They would be too late to allay the energy crunch, but would contribute to the climate crisis.

Like Birol, British opposition leader Keir Starmer said the oil and gas sector has a role to play in the energy transition.

“But not new investment, not new fields up in the North Sea, because we need to go towards net zero, we need to ensure that renewable energy is where we go next,” Starmer said.

‘LOTS OF ENGINEERS’

A consensus appears to be building within the energy industry that demands to immediately drop oil and gas investments and leave it in the ground are counterproductive.

“Energy companies have to be part of the solution here,” McMonigle said, adding: “These are big integrated companies that are really good at doing things, lots of engineers right?”

New technologies need the weight of big oil to be able to scale up solutions, McMonigle said.

Apart from expertise, oil firms are also awash with cash after a year of record high prices, giving them the means to fund more solar, wind and hydrogen projects.

But that does not assuage the fears of climate activists.

Some protesting in Davos expressed disappointment over the United Arab Emirates appointing the head of its oil company ADNOC and its climate envoy, as president of the COP28 summit that the Gulf OPEC producer is hosting this year.

The role involves overseeing negotiations among the nearly 200 countries that typically attend the annual talks, which at COP28 will be the first Global Stocktake since the landmark Paris Agreement of 2015.

“The climate crisis does threaten to destroy everything we know and we care about, and the only solution state leaders are finding is giving more power to those who brought us this crisis from the beginning,” said Nicola Siegrist president of the Young Socialist Party in Switzerland, who organised a protest that attracted a few hundred in Davos this week.

Jaber, who is the founding CEO of Abu Dhabi’s renewable energy firm Masdar and has overseen the UAE’s mandate to adopt renewables is not without green credentials.

His advocates say his appointment is a healthy change and that a more inclusive approach can help achieve climate targets the world is increasingly failing to reach.

“COP28 should be about what’s different this time. Otherwise its just a waste of money in a beautiful place,” Siemens Energy Chairman Joe Kaeser told the Reuters Global Markets Forum.

For daily Davos updates in your inbox sign up for the Reuters Daily Briefing here.

Reporting by Maha El Dahan; Additional reporting by Divya Chowdhury; Editing by Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.



Read More:Davos 2023: Big oil comes in from the cold on energy transition

2023-01-20 13:13:00

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Japan’s Dec consumer inflation hits fresh 41-year high https://newsdaily.business/2023/01/20/japans-dec-consumer-inflation-hits-fresh-41-year-high/ https://newsdaily.business/2023/01/20/japans-dec-consumer-inflation-hits-fresh-41-year-high/#respond Fri, 20 Jan 2023 11:22:04 +0000 https://newsdaily.business/2023/01/20/japans-dec-consumer-inflation-hits-fresh-41-year-high/ Tokyo Reuters  —  Japan’s core consumer prices in December rose 4.0% from a year earlier, double the central bank’s 2% target and hitting a fresh 41-year high, data showed on Friday, adding to recent growing signs of mounting inflationary pressure. The data will likely keep alive market expectations that the Bank of Japan (BOJ) will […]]]>



Tokyo
Reuters
 — 

Japan’s core consumer prices in December rose 4.0% from a year earlier, double the central bank’s 2% target and hitting a fresh 41-year high, data showed on Friday, adding to recent growing signs of mounting inflationary pressure.

The data will likely keep alive market expectations that the Bank of Japan (BOJ) will soon end its yield control policy and allow interest rates to rise more, analysts say.

The increase in the core consumer price index (CPI), which excludes volatile fresh food but includes oil costs, matched a median market forecast and followed a 3.7% annual gain seen in November.

The annual rise in core CPI thus exceeded the BOJ’s 2% target for a ninth straight month.

“Inflationary pressure is heightening quite a bit, with price hikes broadening beyond those for food and fuel,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

“Companies aren’t that cautious about raising prices any more. We might see inflation stay above the BOJ’s 2% target well into autumn this year,” he said.

Core-core CPI, which strips away both fresh food and energy costs, was 3.0% higher in December than a year earlier, accelerating from a 2.8% gain seen in November.

The BOJ kept monetary policy ultra-loose on Wednesday but raised its inflation forecasts in fresh quarterly projections, as companies continued to pass on higher raw material costs to households.

Many market players expect the central bank to phase out the yield curve control, a policy under which it caps long-term interest rates around zero, when dovish governor Haruhiko Kuroda’s second, five-year term ends in April.



Read More:Japan’s Dec consumer inflation hits fresh 41-year high

2023-01-20 01:40:00

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Stocks fall, yields up; economic slowdown worries mount https://newsdaily.business/2023/01/19/stocks-fall-yields-up-economic-slowdown-worries-mount/ https://newsdaily.business/2023/01/19/stocks-fall-yields-up-economic-slowdown-worries-mount/#respond Thu, 19 Jan 2023 23:22:59 +0000 https://newsdaily.business/2023/01/19/stocks-fall-yields-up-economic-slowdown-worries-mount/ Wall Street stocks end down Dollar down vs yen Oil prices up NEW YORK, Jan 19 (Reuters) – World stocks fell on Thursday and U.S. benchmark 10-year Treasury yields bounced up off of four-month lows, as worries mounted that an aggressive stance by central banks could push the global economy into a slowdown. Wall Street […]]]>


  • Wall Street stocks end down
  • Dollar down vs yen
  • Oil prices up

NEW YORK, Jan 19 (Reuters) – World stocks fell on Thursday and U.S. benchmark 10-year Treasury yields bounced up off of four-month lows, as worries mounted that an aggressive stance by central banks could push the global economy into a slowdown.

Wall Street stocks ended lower on recession worries, while European shares recorded their biggest daily selloff of the year and a global stock index posted a third straight day of declines.

Investors are worried the U.S. Federal Reserve may “overhike into a slowing environment,” said Ross Mayfield, investment strategy analyst at Baird.

“This week, sentiment has become a little bit more risk off,” he said. “Recession fears have started to become front and center.”

A U.S. report showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to another month of solid job growth and continued labor market tightness.

The Fed will probably need to raise interest rates to “just above” 5% and hold them there for a period, Boston Fed President Susan Collins said. Other Fed officials have also suggested the need for a hawkish stance to fight inflation.

Earlier, European Central Bank president Christine Lagarde pushed up euro zone bond yields slightly by telling the World Economic Forum’s Davos gathering the bank would stay the course with rate hikes.

The Dow Jones Industrial Average (.DJI) fell 252.4 points, or 0.76%, to 33,044.56, the S&P 500 (.SPX) lost 30.01 points, or 0.76%, to 3,898.85 and the Nasdaq Composite (.IXIC) dropped 104.74 points, or 0.96%, to 10,852.27.

The pan-European STOXX 600 index (.STOXX) lost 1.55% and MSCI’s gauge of stocks across the globe (.MIWD00000PUS) shed 0.94%.

Investors digested more quarterly earnings reports. Procter & Gamble (PG.N) raised its full-year sales forecast and said it plans to continue raising prices.

Also, Netflix (NFLX.O) shares rose more than 6% in after-hours trading. Co-founder Reed Hastings announced he will step down as chief executive, while the company also released quarterly results.

Benchmark 10-year U.S. Treasury yields edged off four-month lows as they neared a key technical level and the recent bond rally appeared overdone in the near term.

The 10-year yields were last at 3.397%, after earlier dropping to 3.321%, the lowest since Sept. 13. The 200-day moving average was at 3.292%. The yields have fallen from 3.905% at year-end, and from a 15-year high of 4.338% on Oct. 21.

In the currency markets, the dollar fell 0.4% in afternoon trading against the yen to 128.455 yen , a day after the Bank of Japan’s decision to stand pat on its ultra-loose monetary policy.

In other data, overall U.S. housing starts declined 1.4% to a rate of 1.382 million units last month. Building permits dropped 1.6% to a rate of 1.330 million units.

The U.S. government hit its $31.4 trillion borrowing limit, with the Republican-controlled House of Representatives in a standoff with President Joe Biden’s Democrats on lifting the ceiling. Failure to resolve the issue could lead to a fiscal crisis in a few months.

Treasury Secretary Janet Yellen informed congressional leaders that her department had begun using extraordinary cash management measures that could stave off default until June 5.

World stocks strong start to 2023

In the energy market, oil prices rose 1%, extending a recent rally amid rising Chinese demand.

Brent crude futures gained $1.18, or 1.4%, to settle at $86.16 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 85 cents, or 1.1%, to settle at $80.33 per barrel. Those were the highest closing levels for both contracts since Dec. 1.

Reporting by Caroline Valetkevitch in New York; additional reporting by Gertrude Chavez-Dreyfuss in New York and Marc Jones in London; editing by John Stonestreet, Alex Richardson and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.



Read More:Stocks fall, yields up; economic slowdown worries mount

2023-01-19 22:36:00

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Gold back up above $1,900 level as dollar loses ground https://newsdaily.business/2023/01/18/gold-back-up-above-1900-level-as-dollar-loses-ground/ https://newsdaily.business/2023/01/18/gold-back-up-above-1900-level-as-dollar-loses-ground/#respond Wed, 18 Jan 2023 10:53:03 +0000 https://newsdaily.business/2023/01/18/gold-back-up-above-1900-level-as-dollar-loses-ground/ Jan 18 (Reuters) – Gold reversed course to trade higher on Wednesday as the U.S. dollar pulled back from session highs and expectations of a slower pace of Federal Reserve rate hikes supported prices above the $1,900 threshold. Having dipped in the last two sessions, spot gold rose 0.2% to $1,911.57 per ounce by 0917 […]]]>


Jan 18 (Reuters) – Gold reversed course to trade higher on Wednesday as the U.S. dollar pulled back from session highs and expectations of a slower pace of Federal Reserve rate hikes supported prices above the $1,900 threshold.

Having dipped in the last two sessions, spot gold rose 0.2% to $1,911.57 per ounce by 0917 GMT, after hitting a session low of $1,896.32 earlier. U.S. gold futures ticked up 0.2% to $1,913.60.

Despite the gains on Wednesday, prices have pulled back from their highest level since April 2022, reached on Monday.

“The fact that the recent gold rally started to lose steam does not come unexpectedly as it was lacking the buy-in from investors,” said Carsten Menke, head of Next Generation Research at Julius Baer.

“That said, a (correction) is unlikely to be massive because market consensus still calls for a less aggressive Fed going forward.”

Investors are increasingly expecting the Fed to reduce the size of rate hikes to 25 basis points at its next meeting, after slowing its pace to 50 bps in December, following four consecutive 75 bps increases. FEDWATCH

As gold yields no interest, it tends to become more attractive in a low interest rate environment.

However, due to the lack of investment demand, we see gold prices on a rather soft footing, Menke said. He adds that a pick up in investment demand will be crucial to the future trajectory of gold.

Making gold appealing for overseas buyers, the dollar index fell from its session highs.

Investors are now looking towards the U.S. producer price index and retail sales data due later in the day.

“Recession worries and the Federal Reserve’s policy decision would be the major catalysts for prices in the near future,” said Hareesh V, head of commodity research at Geojit Financial Services.

Spot silver rose 1% to $24.159 per ounce while platinum was little changed at $1,039.88.

Palladium climbed 0.7% to $1,755.32.

Reporting by Arundhati Sarkar and Ashitha Shivaprasad in Bengaluru. Editing by Sharon Singleton

Our Standards: The Thomson Reuters Trust Principles.



Read More:Gold back up above $1,900 level as dollar loses ground

2023-01-18 10:10:00

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BOJ defies market bets for policy tweaks, sending yen tumbling https://newsdaily.business/2023/01/18/boj-defies-market-bets-for-policy-tweaks-sending-yen-tumbling/ https://newsdaily.business/2023/01/18/boj-defies-market-bets-for-policy-tweaks-sending-yen-tumbling/#respond Wed, 18 Jan 2023 05:35:08 +0000 https://newsdaily.business/2023/01/18/boj-defies-market-bets-for-policy-tweaks-sending-yen-tumbling/ BOJ keeps interest rate targets, yield band intact BOJ ramps up market operation tool, signal status quo on YCC Board raises inflation forecasts but cuts growth projections TOKYO, Jan 18 (Reuters) – The Bank of Japan on Wednesday maintained ultra-low interest rates, including a bond yield cap it was struggling to defend, defying market expectations […]]]>


  • BOJ keeps interest rate targets, yield band intact
  • BOJ ramps up market operation tool, signal status quo on YCC
  • Board raises inflation forecasts but cuts growth projections

TOKYO, Jan 18 (Reuters) – The Bank of Japan on Wednesday maintained ultra-low interest rates, including a bond yield cap it was struggling to defend, defying market expectations it would phase out its massive stimulus programme in the wake of rising inflationary pressure.

The surprise decision sent the yen skidding against other currencies as investors unwound bets they made anticipating the central bank would overhaul its yield control policy.

At a two-day policy meeting, the BOJ kept intact its yield curve control (YCC) targets, set at -0.1% for short-term interest rates and around 0% for the 10-year yield, by a unanimous vote.

The central bank also made no change to its guidance that allows the 10-year bond yield to move 50 basis points either side of its 0% target.

In a sign of its resolve to keep defending the cap, the BOJ beefed up a key market operation tool to more effectively curb rises in long-term interest rates.

“Widening the yield band or dismantling YCC now would have made the BOJ even more vulnerable to market attack,” said Izuru Kato, chief economist at Totan Research.

“By showing its resolve to use market tools more flexibly, the BOJ wanted to signal to markets it won’t make big monetary policy changes under Governor Haruhiko Kuroda.”

Kuroda’s second five-year term ends in April.

The decision follows the BOJ’s surprise move last month to double the yield band, a tweak that analysts say has failed to correct market distortions caused by its heavy bond buying.

The dollar rose 2.4% to 131.20 yen <JPY=EBS > on the BOJ’s announcement, marking its biggest one-day jump since March 2020, while the Nikkei stock average jumped by more than 600 yen.

The yield on the 10-year Japanese government bond fell 10.5 basis points to 0.395%.

Reuters Graphics

DIMMING GROWTH PROSPECTS

Since December’s action, the BOJ has faced the biggest test to its YCC policy since its introduction in 2016 as rising inflation and the prospects of higher wages gave traders an excuse to attack the central bank’s yield cap with aggressive bond selling.

Kuroda has repeatedly said the BOJ was in no rush to dial back stimulus, let alone raise interest rates, until wages rise enough to boost household income and consumption, allowing firms to lift prices.

In a quarterly report released on Wednesday, the BOJ raised its core consumer inflation forecast for the current fiscal year ending in March to 3.0%, from 2.9% projected in October.

It also revised up the inflation forecast for the fiscal year ending March 2024 to 1.8%, from 1.6% seen three months ago.

But the inflation forecast for fiscal 2023 was maintained at 1.6%, a sign the board is sticking to the view prices will moderate as the effect of past surges in raw material costs dissipate.

The BOJ also slashed its economic growth projections for fiscal 2023 and 2024, amid worries slowing global growth will weigh on the export-reliant economy.

Japan’s core consumer inflation has exceeded the BOJ’s 2% target for eight straight months, as companies raised prices to pass on higher raw material costs to households.

Data due out on Friday is likely to show inflation hit a fresh 41-year high of 4.0% in December, according to a Reuters poll, although analysts expect price growth to moderate later this year reflecting recent declines in global commodity prices.

Reporting by Leika Kihara and Tetsushi Kajimoto; Additional reporting by Kantaro Komiya and Daniel Leussink; Editing by Bradley Perrett and Sam Holmes

Our Standards: The Thomson Reuters Trust Principles.



Read More:BOJ defies market bets for policy tweaks, sending yen tumbling

2023-01-18 04:26:00

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