Post Tagged with: "Japan"
Why The Yen Rally May Not Last
The Japanese yen was hands down the best performing G10 currency in April, gaining about 3.3% against the dollar and 4.2% against the euro. It appeared to start the new month on a strong note, with the dollar falling to 2 month lows in early Asia. However, in a holiday-thin European session and then in the North American session, the yen was sold off. There are several considerations that we briefly sketch here
Australian House Prices down 10% from Peak
Australian house prices peaked in June 2010. The motive force behind Australia’s bubble was the same as in the USA and Japan: accelerating debt drove rising house prices during the boom. Now in both those countries, decelerating debt is driving house prices down. The same pattern applies in Australia
Japan’s fuel imports driving trade deficit to record
As predicted earlier this year, Japan continues to struggle with its energy needs. The chart below shows the recent trend in Japan’s imports of residual fuel oil. These fuel imports are quickly translating into a rising trade deficit
Lots of Recent Policy Missteps: What are They Thinking?
In recent days, policy makers have been most noticeable by their absence. This absence has weakened their credibility and encouraging speculative attention. This is true for Switzerland, Europe and Japan
Dollar and Yen Bounce Back as Periphery Concerns Mount
As full liquidity returns to the markets for the first time in nearly a week, the US dollar and Japanese yen have rallied. First though weak short euros and long yen cross positions were squeezed in early Asia, but by the time Europe entered the fray, the moves were well under way, with the euro and sterling coming off and the yen rallying
Seven Observations about the Yen
The yen was the weakest of the major currencies in Q1, losing about 7.2% against the dollar. There was a clear shift in both speculative and portfolio flows. This is just one of seven observations about the Yen via Marc Chandler
On Lord Wolfson’s Economic Prize for Leaving Euro Area
At around 9:00am London time this morning Lord Wolfson held a press conference to announce the five finalists in his economics prize contest. Naturally Lord Wolfson is not looking for just any solutions, as the initial question makes clear, he is looking for a solution in which at least one member country leaves the Euro and a procedure (or template) whereby other countries who find themselves in a similar situation might leave. Unfortunately this questions begs many other questions, some of which have no easy answer
Faber: Japanese stocks will outperform as US margins deteriorate
Here’s the latest from Bloomberg Television, Marc Faber, the publisher of the Gloom, Boom and Doom Report, thinks that Japanese equities are going to outperform this year. Why? For the same reasons I have been saying that a more defensive posture is warranted: “earnings may begin to disappoint” and “corporate profit margins could deteriorate.”
Several policy implications from the recent data reports
The US dollar is marginally softer as North American players return to their posts. The better-than-expected official Chinese manufacturing PMI (53.1 from 51.0 in Feb and consensus for 50.5) saw steeper losses in the greenback, but the disappointing euro zone manufacturing PMI (47.7 same as the flash but weak details) helped cap the euro in front of last week’s highs, ahead of 1.34, and weighed on European equities. There are several policy implications from the recent data reports. We enumerate them here
Economic Weakness Boosts Demand for Dollar and Yen; Chinese PMI Down
The theme of the day is one of economic weakness. New Zealand GDP (0.3% q/q vs. 0.7% prev), HSBC China PMI (48.1 vs. 49.6 prev), euro zone PMI composite (48.7 vs. 49.3 prev), and UK retail sales (-0.8% m/m vs. 0.6% prev ex-auto fuel) all came in weaker than expected. While some of these numbers can be volatile, the timing of the reports couldn’t be worse given rising concerns in recent days about a China hard landing along with softer global growth
Japan to Report Another Trade Deficit
Exports are still falling on a year-over-year basis, but at a slower pace. Imports are still rising, but here too the pace is slowing. The swing into trade deficit for Japan happened from both sides. Exports were squeezed by the strengthening of the yen and weaker foreign demand. Imports were bolstered by energy imports as its reliance has dramatically risen since last year’s tragedy. The key driver for the current account is not the trade balance, but the investment income. This consists of items like dividends, coupon payments received, licensing fees, and royalties. It is fairly stable. Over the past six months, Japan has received an average of JPY1.11 trillion a month. The monthly average over the past year is JPY1.17 trillion
The Japan debt disaster and China’s (non)rebalancing
In this issue of the newsletter I want to sketch out a scenario in which rather than analyze policy announcements or make predictions I try to lay out what are the various possible paths open to China. The scenario concerns trade. China’s current account surplus has declined sharply from its peak of roughly 10% of GDP in the 2007-2008 period to probably just under 4% of GDP last year. Over the next two years the forecast is, depending on who you talk to, either that it will rise significantly, or that it will decline to zero and perhaps even run into deficit. The Ministry of Commerce has argued the latter and the World Bank the former