Tag Archives: Japan

Just A Minute!

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the markets:

Main Trading Event Of The Day: USD JOLTS Job Openings @ 14.00 GMT

WHAT WE’RE WATCHING TODAY

Signs Of A Global Recovery But Economy Going Nowhere Says Top Forecaster

Companies across the globe are increasingly confident about the economic recovery and their own finances for the coming quarter, which shows more countries are planning to increase their staffing in almost six years, according to a survey. The quarterly employment outlook survey by Manpower Group showed that companies in 38 out 42 countries indicated plans to hire more workers in the second quarter, the largest number since the third quarter of 2008. The mildly positive tone of the quarterly survey suggests the global economic recovery will continue with higher rates of employment helping to boost business output and consumer spending. The second-quarter survey results don’t exactly point to a turnaround in Europe, but there are several indications that employer optimism is gradually improving.

While the Federal Reserve, the White House and many private-sector economists support these predictions for stronger growth in 2014, one of the most accurate forecasters in the business, Stephen Stanley, chief economist for Pierpont Securities, disagrees saying that he doesn’t see the impetus for 3% growth. He believes the economy will be satisfactory, with growth in the 2% to 2.5% range, but below the 2.7% to 3.3% expected by the Fed, the White House, the Congressional Budget Office and private forecasters. The recent spate of unseasonably cold and snowy weather has upset the usual tools for forecasting the near-term trajectory of the economy. There’s no doubt that many of the economic indicators of job growth, factory production, retail sales and housing have been massively distorted by the effects of the weather but we are unlikely to really know what the underlying strength of the economy is until the April and May data come in. Stanley is also skeptical that the relaxation in fiscal policy this year will have any meaningful impact on growth or give any support to the economy.

Oil Prices Drop After Data From China & Japan Show Weak Trade

The price of oil fell below $102 on Monday after an unexpected drop in China’s exports and weaker economic growth in Japan showed demand for crude could weaken. Benchmark U.S. crude for April delivery was down $1.18 to $101.40 per barrel. On Friday, the contract rose $1.02 to close at $102.58 after strong U.S. employment figures for February. Brent crude was down 90 cents to $108.11. China’s customs data showed over the weekend that exports plunged by an unexpectedly large 18 per cent last month. Robust trade is crucial in helping China achieve its official economic growth target of 7.5 per cent for this year. However, exports in February last year might have been overstated by exporters inflating sales figures as an excuse to evade currency controls and bring extra money into China. Japan revised down its growth estimate for the final three months of last year after announcing a record current account deficit for January. Oil prices surged last week due to severe winter in the U.S. that raised demand for oil and tensions over Russia/Ukraine political situation.

Stocks Update: Facebook, Rio Tinto

Facebook shares have jumped 32 percent so far this year, compared with a 1.6 percent gain for the Standard & Poor’s 500 Index. The surge has left the 49 analysts who cover Facebook divided. 38 of them recommend the company with the equivalent of a buy rating but 21 of the total now have share-price targets below where Facebook is trading. That translates to an average 12-month price target of $72.46 for Facebook, less than 1 percent above the company’s closing price of $72.03 yesterday. With the stock advancing more rapidly than anticipated, the price targets suggest that analysts on average see little upside to the stock which may force some of the bulls to adjust their projections. Facebook’s rally to $72.03 a share has already left it trading at 122 times trailing 12-month earnings, making it more expensive than 98 percent of all companies in the S&P 500.

Meanwhile, Rio Tinto Group, the world’s second-biggest iron ore shipper, said short-term price fluctuations will continue after a credit squeeze in China and high stockpiles plunged the commodity into a bear market. Proof of short-term volatility is being seen this week whilst the market is continuing to see an attractive longer term demand for iron ore, driven particularly by China. Iron ore this week extended its decline, slumping by the most since August 2009, amid concern that demand in China is slowing just as rising output signals a global glut. The Chinese government’s credit squeeze and high stockpiles are driving the rapid change of sentiment.

That sums up today’s highlights! Keep in touch with all the latest market events via our Facebook, Google+, Twitter & LinkedIn pages. We hope you have a profitable day on the markets.

Can Japanese Electronic Giants Adapt To The Software Era?

Remember the days when the Japanese electronic giants were huge household names? Just 10 years ago, Sony, Panasonic and Sharp built their global empires on making appliances such as televisions, radios, refrigerators and washing machines. But has it become a case of “Where are they now?” as they have been overtaken by the digital revolution and are now struggling to profit? These days, commuters are more likely to spend their journeys on an Apple or Samsung device rather than a Sony Walkman but they could still be in a position to survive and compete in the market. Not every firm needs to be Apple to generate revenue so investors should not write these firms off. Oren Laurent’s latest article examines the current situation and possible investment opportunities. Read more…

Japanese Indices Stagger Upon Record Stimulus

The Japanese Nikkei 225 Stock Average risks a precipitous drop of about 20 percent to 12,000 unless the government can convince investors of the success of its economic stimulus plans, according to the leader of Japan equities, Nomura Holdings Inc. (8604).

The Nikkei index increased 2.1 percent to 14,876.41 as the trading day closed in Tokyo today, having fallen 4.8 percent from the 5 1/2-year high it reached on 22nd May. Investors worry that the government’s plan to increase sales tax will cripple momentum as the economy is already kept afloat by an unprecedented stimulus.

Japan’s equities, however, still outperform other developed markets for the year, as the Nikkei 225 and the broader Topix indices rose 40 percent through yesterday. Japanese stocks have attracted $108.5 billion this year from overseas institutional investors.

Topix Trims Gains Ahead of U.S. Data

After yesterday’s gains, Japan’s Topix index dropped, as profit forecasts disappointed investors before U.S. growth and data that are expected to provide clues about when the Federal Reserve will start reducing stimulus.

Toyota Motor Corp. (7203), the world’s biggest car manufacturer, fell 1.3 percent as its net-income projection did not correspond to estimates. Casio Computer Co., the watch and calculator maker, lost 2.9 percent after increasing its profit outlook less than analysts anticipated. Toray Industries Inc., the producer of carbon fibre used in Boeing Co.’s 787 Dreamliner, gained 5.7 percent after profit surged.

The Topix slid 0.6 percent to 1,184.73 at the close in Tokyo. All but four of the 33 industry groups fell, with volume 11 percent below the 30-day average. The Nikkei 225 Stock Average dropped 0.8 percent to 14,228.44. The U.S. releases gross domestic product data today and employment figures tomorrow.

Nissan Shares Fall Along With Quality

Nissan Motor Co Ltd (7201.T)’s shares dropped by 11.6 percent reaching a seven-month low at 850 yen on Tuesday morning with the carmaker reducing its annual net profit outlook as it deals with a slowdown in emerging markets and quality issues.

The stock was the third-most traded on the main board by turnover.

The carmaker decreased its net profit projection for the year ending March 2014 to 355 billion yen ($3.6 billion) from 420 billion yen after the market close on Friday.

Japanese markets were closed for a public holiday on Monday.

Asian Indices Slide before Fed Cuts Stimulus

Asian stocks decline after the president of the Federal Reserve Bank of Dallas, Richard Fisher, said the U.S. central bank should curb its record stimulus as soon as possible.

Financial companies in South Korea including Shinhan Financial Group Co., Mirae Asset Securities Co. and Hana Financial Group Inc. fell more than 3 percent. Coca-Cola Amatil Ltd. (CCL), Australia’s largest listed drinks company, declined 4.7 percent after predicting 2013 earnings to drop. MStar Semiconductor Inc., an electronics component maker, advanced 7 percent to close at a record in Taipei.
The MSCI Asia Pacific excluding Japan Index dropped 0.3 percent to 478.22 after rising as much as 0.2 percent. Nearly twice as many stocks fell as rose on the index.

The Fed began changing its rhetoric after its last meeting last month mentioning signs of “underlying strength” in American economy that have people talking about the cost of quantitative easing and the possibility of its curbing sooner than previously anticipated.

Yen Gains Against All Major Currencies

With retail sales growing much quicker than economists expected and a falling unemployment, rate the yen climbed against all 16 major currencies before the Central Bank of Japan later this week.

The International Monetary Fund’s mission chief for Japan, Jerry Schiff, stated in an interview in Tokyo that “the consensus is that the yes is somewhat undervalued. Right now we don’t think the BOJ needs to do anything different to what they are doing. They announced a quite enormous monetary accommodation, and although it may not be moving very fast, both inflation and inflation expectations are moving in the right direction.”

The yen rose 0.2 percent to 134.39 per euro at 1:49 p.m. in Tokyo since yesterday. It gained 0.1 percent to 97.57 to the dollar. Moreover, the Japanese currency is forecast to rise 0.7 percent per USD but to decline 1.1 percent against the euro this month.

Dollar falls after lower-than-expected NFP report

Following yesterday’s release of U.S. Non-Farm Payrolls which showed slow growth and suggested that the Fed will not be easing its stimulus plan, the dollar fell to a two-year low against the euro. The much-awaited report by the Labor Department which had been delayed by the U.S. government shutdown showed yesterday that employers had added fewer jobs in the American than economists expected.

The yen also saw a rise against all major counterparts as investors seek for alternative refuge assets. The yen can be seen strengthening in periods of global economic turmoil because Japan does not rely on foreign capital to fund its deficit.

Topix Climbs to Three-Week High

The Japanese Index Topix climbed to a three-week high with investors speculating corporate earning to surpass predictions and a weaker yen boosting the country’s exporters.

As Markets closed in Tokyo, the Topix rose 0.6 percent to 12,212.36, its highest level since late September, as all but three of its industry groups advanced. The Nikkei Stock Average also gained today to 14,693.57, adding 0.9 percent. With the yen falling 0.4 percent against the dollar, optimism has risen regarding corporate earnings as the companies you haven’t fully priced in a weaker yen can increase their profit projections.

Yen Makes Headway Against the Dollar

The yen went up for a second day in a row on Wednesday against the dollar which glided to 95.56 yen from 96.05 yen in New York late Tuesday evening. Later this week the Japanese parliament will likely confirm the nomination of Haruhiko Kuroda, an advocate of quantitative easing, as Bank of Japan’s next governor. Kuroda has promised to implement sweeping measures to push Japan’s inflation to two per cent, a rarely seen figure in Japanese fiscal history. Investors are pondering rumors that Japan’s largest opposition party will vote against one of the government’s nominees for deputy governor of the Bank of Japan.

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