Thanksgiving 2016 Gives Japan Reason to Be Grateful

November 24, 2016

The yen, which had been as strong as 101.20 per dollar on November 9, extended its post-U.S. election slide to a low today of 113.54. EUR/YEN strengthened past 119.1.

Japanese share prices have rallied on the more competitive yen, rising another 0.9% overnight. While U.S. and other sovereign debt yields have climbed, the 10-year Japanese JGB is only 0.02%.

In other news,

Revised German GDP data confirmed growth last quarter of 0.2% from the second quarter and 1.7% from a year earlier. Domestic demand provided a half percentage point lift, while net exports exerted a drag on GDP growth.

Spanish GDP expanded 0.7% in the third quarter and 3.2% from a year earlier.

Germany’s business climate index, compiled by the IFO Institute, was unchanged in November, as improved current circumstances balanced a slight worsening of expectations.

Business sentiment

  • Also held the same in France and Belgium during November.
  • Improved in the Czech Republic to the best level since May 2008.
  • Rose in Sweden to a 10-month high.

Turkey’s central bank raised its 1-week repo rate by 50 basis points to 8.0% and its overnight funding rate by 25 basis points to 8.5%. Tightening was needed because the U.S. election had made the global environment for emerging markets even more “challenging and volatile,” depressing the lira. The overnight deposit rate was left unchanged at 7.25%.

The South African Reserve Bank changed its assessment of forecast risks from “balanced” to moderately tilted to the upside in the wake of the U.S. election, but SARB officials left their repo rate unchanged at 7.0%. Officials pledged to be vigilant is watching the outlook for inflation.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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