Spotlight on Japan and APEC Meetings
November 11, 2014
Dollar/yen hit a new high for the move of 116.12 and shows a net overnight advance of 0.9%. The yen also touched a low of 144.02 per euro.
The Japanese Nikkei gained 2.1%, supplanting 17K to 17,124. The ten-year Japanese JGB yield rose four basis points to 0.48%. Greater optimism toward Japan’s outlook has followed the augmenting of monetary stimulus announced at end-October and has been fanned by a spate of Japanese data released today. Japanese 3Q GDP, due next week, will be a critically important event.
- Japan’s seasonally adjusted current account surplus of JPY 414 billion in September was the best result since June 2013 and is more than three times greater in September than August’s JPY 131 billion. The unadjusted surplus of JPY 963 billion compares to JPY 595 billion a year earlier. Merchandise exports grew 11.6% on year, accelerating from a 1.0% on-year rise in August. Imports rose 10.4% year-over-year.
- Stock and bond transactions generated a JPY 616 billion net capital inflow last month.
- The customs trade deficit in the first 20 days of October amounted to JPY 456 billion, but on-year export growth of 4.5% outpaced the 3.9% rise of imports.
- Japanese bank lending growth accelerated from 2.2% on-year in 2Q and 3Q to 2.4% in October, a nearly five-year peak.
- Bankruptcies fell 16.6% on year in October after a 0.9% uptick posted in September.
- Not all the data were encouraging. Consumer confidence fell for a third straight month and, with a reading of 38.9, was lower than forecast and a full point beneath September’s level. The economy watchers index worsened 3.4 points to a 7-month low, and the forward-looking economy watchers outlook component dropped to 46.6 from 48.7 in September and 50.4 in August. Machine tool orders posted a smaller 31.2% on-year advance in October than the 34.7% rise in the year to September.
The leaders summit in Beijing of Asia-Pacific Economic Cooperation members produced a number of intriguing but brief face-to-face discussions among people on tense terms such as between Presidents Obama of the U.S. and Putin of Russia. No breakthroughs were reported.
The dollar is unchanged against the euro and Swiss franc, down 0.2% versus the Australian and New Zealand dollars, off 0.1% vis-a-vis sterling, but up 0.1% relative to the yuan and loonie.
Banks will be shut for Veterans Day in the U.S. and Canada. U.S. stock markets, which have set new record highs in the last four sessions largely in reaction to reassuring corporate earnings, are open today.
Share prices in Asia rose 1.4% in Indonesia, 0.3% in Hong Kong and 0.4% in New Zealand but slipped 0.3% in China and Singapore, 0.2% in Taiwan and 0.1% in Australia. In European markets, stocks have risen 1.0% in Spain, 0.5% in Italy, 0.4% in France, 0.2% in Germany, and 0.1% in the U.K. and Switzerland.
Comex gold fell 0.4% to $1,155.70 per ounce, and WTI oil is 0.3% lower at $77.16 per barrel.
The 10-year British gilt yield is three basis points higher, while German bunds are unchanged.
The National Australia Bank’s index of Aussie business conditions jumped a dozen points to a 6-year high of +13 but was accompanied by a one-point dip in business confidence. Home prices in Australia posted a slightly smaller on-year rise of 9.1% in 3Q after a gain of 10.1% in 2Q.
Same-store sales in the U.K. were unchanged from a year earlier in October, according to the British Retail Consortium.
Swedish consumer prices registered another negative on-year change last month, albeit of just 0.1%. Riksbank officials recently eased monetary policy to prevent deflation from becoming entrenched.
The latest CPI inflation rates in Romania and Hungary are respectively 1.4% and negative 0.4%.
On-year growth in Malaysian industrial output slowed to 5.4% last month from 6.5% in September.
The National Federation of Independent Business releases its index of U.S. small business sentiment later today.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Japanese current account, Nikkei-225, Yen