Focus on Japan, Not Europe

May 20, 2013

European trading was dampened by the observance in countries such as France, Austria, Norway, Denmark and Germany of Whit Monday, a Christian holiday.  Its been a very light day from the standpoint of released European data.  Canada will be observing Victoria Day.

Remarks from Japanese Economics Minister Amari caught investors’ attention.  He suggested the bulk of the yen’s correction had occurred and that further depreciation might even be harmful.  The Japanese government unveiled a new monthly economic assessment, revising the appraisal slightly upward to “picking up slowly” and deleting the caveat in the April assessment that weakness can be seen in some areas.  The assessment of exports improved.  Officials look for gradual recovery based on macroeconomic support, improved confidence and better export demand.

Over the weekend, North Korea fired several short-range missiles into the Sea of Japan, but this hasn’t really hurt the mood in Asian equity trading.  Japan’s Nikkei advanced 1.5%.  Stocks also rose 1.8% in Hong Kong, 1.4% in India, 1.0% in Thailand, 0.7% in China and 0.6% in Australia.  South Korea’s Kospi index slid just 0.2%.  Stocks in Europe are up 0.5% in Germany, 0.3% in France, 0.2% in Spain but unchanged in Britain.

Gold sank 1.3% to $1347.40 per ounce, and silver took a huge hit, losing over 8% at its daily low.  Oil is off 0.6% at $95.43 per ounce.

Ten-year sovereign debt yields have risen four basis points in Japan and three basis points in Germany and Britain.

The dollar retreated 0.8% against the kiwi, 0.6% versus the yen, 0.5% relative to the Swiss franc and 0.4% against the Aussie dollar.  The U.S. currency edged down 0.1% against the euro and sterling and 0.1% higher versus the loonie, and it’s unchanged relative to the Chinese yuan.

Chinese house prices rose in 67 of 70 cities last month.

Japanese department store sales posted an on-year drop of 0.5% in April, swinging adversely from a 3.9% 12-month rise in March.  The on-year decline in machine tool orders in April was revised to 23.6% from a 24.1% preliminary estimate and a fall of 26.1% in the year to March.

Thailand reported disappointing GDP figures for the first quarter, showing a 2.2% quarterly decline and a steep drop in on-year growth to 5.3% from 19.1% in 4Q12.  The data compelled officials to revised down projected 2013 growth to a range between 4.2% and 5.2%.

Taiwan’s current account surplus narrowed 30.6% to $11.1 billion last quarter.  Export orders in April were 1.1% softer than a year before.  Hong Kong’s jobless rate held steady at 3.5% last month.

New Zealand’s service-sector purchasing managers index rose 0.5 points to a respectable reading of 56.1 in April.

Italian industrial orders were 10.0% lower in March than a year before despite a 1.6% monthly increase.  Italy’s current account recorded a surplus of EUR 1.9 billion in March versus deficits of EUR 1.6 billion in February and March 2012.  Portuguese producer prices firmed 0.5% on month but slid 0.4% on year in April.

The Chicago Fed National Activity Index arrives today, and Chicago Fed President Evans, an outspoken dove, speaks publicly.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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