Tag Archives: Nikkei. Japanese stock market

Will The Fed Jolt The Markets This Week?

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

Main Trading Event Of The Day: US Industrial Production @ 13.15 GMT

WHAT WE’RE WATCHING TODAY

Will The Fed Jolt The Markets This Week?

The Federal Reserve is expected to announce another $10 billion monthly reduction in quantitative easing in this week’s FOMC statement with the focus being on the Fed’s economic assessment, which could end up realigning investor expectations about when the Fed is likely to hike rates. In its last statement, the FOMC noted that growth in economic activity had picked up after having slowed sharply during the winter, but added that the labour market indicators were mixed and the unemployment rate remained elevated. However, the outlook has improved with the last two employment reports showing monthly non-farm payrolls growth of 282,000 and 217,000. And after a severely weak first quarter, several economists are looking forward to Q2 GDP growth around 4 percent. While the Fed is unlikely to alter its tapering plans or tweak its forward guidance, its new economic projections could still prompt speculation that the first interest rate hike may come earlier than mid-2015. Analysts are concerned that these new Fed jitters could crop up just as the market is running into geopolitical concerns surrounding the situation in Iraq and its impact on crude oil.

Asia Stocks Lower As Yen Gains On Iraq Conflict

Japanese stocks fell today as concerns over Iraq resulted in a stronger yen. The escalating conflict in Iraq continued to pressure market sentiment, pushing the cost of oil higher and sending investors toward the yen, Asia’s safe-haven currency. The yen edged a touch higher in Asian trade, with the U.S. dollar last at ¥101.84, compared with ¥102.04 on Friday. The stronger yen translated into falls for the Nikkei Average which was last down 0.7%. Australia’s S&P/ASX 200 lost 0.2%, as mining stocks dropped amid declining prices for spot iron ore, which fell 0.7% on Friday to a 21-month low. Concerns over the use of iron to finance deals and allegations of fraud involving commodities stored in China continue to rattle the market. In China, markets were mixed with Hong Kong’s Hang Seng Index down 0.2% and the Shanghai Composite was flat. Trading got off to a quiet start today, ahead of the U.S. Federal Reserve’s upcoming policy meeting. Scheduled to conclude on Wednesday, the meeting will provide a monetary-policy update for the world’s largest economy.

Russia/Ukraine Gas Deadline Passes As Talks Fail

A deadline for Ukraine to pay Russia its gas bill passed today after talks between the two sides failed to reach agreement. Russia will now switch to an advance payment system for supplying its eastern European neighbor, meaning that gas resources which also supply parts of wider Europe could potentially be shut off at any point. Russia has previously said that Kiev owes $1.95 billion for gas that has already been delivered. Under previous President Viktor Yanukovych, Ukraine had been paying a reduced price for the amount of gas that it was buying from Russia. However, after fierce street battles, a change of government in Kiev and the annexation of Crimea by Russia, Moscow ramped up the prices it charged to Ukraine. After several rounds of talks, with a representative from the European Union trying to help both sides reach a compromise, no clear solution has been found.

That sums up today’s highlights! Stay in touch throughout the day via our social media channels for all the latest market updates. We hope you have a profitable day on the markets.

ECB Set To Cut Rates Driving Banks Into Lending

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

WHAT WE’RE WATCHING TODAY

ECB Set To Cut Rates Driving Banks Into Lending

The European Central Bank is set to impose negative interest rates on its overnight depositors, seeking to push banks into lending and to prevent the euro zone falling into deflation as experienced in Japan. At today’s meeting, ECB policymakers are also expected to launch a loan program for banks with strings attached to make sure the money actually gets out into the euro zone economy. Even though the risks are limited of the euro zone entering a spiral of falling prices, slowing growth and consumption, the ECB is increasingly concerned that continuously low inflation and weak bank lending could upset the recovery. The economy grew just 0.2 percent in the first quarter, and euro zone annual inflation unexpectedly slowed to 0.5 percent in May, putting additional pressure on the central bank to step in. A broad stimulus package may be in the making that is likely to consist of a cut in interest rates which would push the deposit rate for the first time into negative territory and the offer of longer-term loans linked to further lending. Large-scale asset purchases remain a distant prospect. Cutting the deposit rate below zero would see the ECB charge banks for parking their excess money at the central bank, a step it hopes will prompt them to lend out the money instead. The euro has fallen about 4 U.S. cents against the dollar since the ECB’s May meeting, hitting $1.3586 last Thursday. Before taking any decision, the Governing Council will look at the June update of its quarterly staff projections. In March, they showed it would take 2-1/2 years for inflation to get near the ECB’s target of below but close to 2 percent. A deteriorating outlook will be seen as triggering action although a move to deploy so-called quantitative easing remains some way off.

Nikkei Touches Two-Month High. Is it Just The Start?

The Nikkei touched a two-month high this week, a sign of lessening concerns about Japan’s economy, according to analysts who remain bullish on Japanese stocks. Stocks powered higher on Thursday, to reach 15,141 soon after open, its highest level since April 3. Last year, plans to boost Japan’s economy through aggressive easing, fiscal stimulus and structural reform saw the Nikkei rise 55 percent, while the yen depreciated 21 percent against the U.S. dollar boosting exporter stocks. However, the Nikkei fell 8.2 percent during the first quarter of 2014 amid concerns about the impact of a consumption tax hike to 8 percent from 5 percent in April. Companies were afraid that Japan’s economy would lurch back into the dangerous deflationary spiral that the last tax hike prompted in the 1990s but the economy has proved resilient, and Japan’s core consumer prices jumped 3.2 per cent in April from a year earlier, the fastest gain since February 1991. Meanwhile, investors have also turned more positive on progress on structural reforms. This week Japan’s corporate tax rate was cut, one of the structural reforms investors were worried might not come to fruition. Japan’s corporate tax rate currently sits at around 35.6 percent, among the highest in industrialised nations. The release this week of a draft of the government’s growth strategy has also powered stocks higher.

WTI Falls for Second Day Amid Record U.S. Supply

West Texas Intermediate fell for a second day as crude stockpiles remained near record-high levels amid declining fuel demand in the U.S., the world’s biggest oil consumer. Futures dropped as much as 0.4 percent in New York. Crude supplies shrank by 3.43 million barrels to 389.5 million last week. They were at 399.4 million through April 25, the most since the Energy Department’s statistical arm started publishing weekly data in 1982. There is still concern that the market is oversupplied. WTI for July delivery declined as much as 45 cents to $102.19 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.34. Brent for July settlement decreased as much as 40 cents, or 0.4 percent, to $108 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.98 to WTI.

That sums up today’s highlights! Keep checking in regularly via our social media channels for all the latest trading updates and news. We hope you have a profitable day on the markets.

Japanese Index Drops As Investors Try to Gauge the Fed’s Next Move

The yen rose against the dollar yesterday as investors continued their hunt for clues on when policy makers may taper the economic stimulus sending Japan’s Topix index spiralling down to its biggest two-day drop in nearly four months.

The carmaker Nissan Motor Co., which gets over a third of its revenue from North America, fell 3.5 percent. A gauge that tracks warehousing and harbour transportation shares experienced a losses among the 33 Topix industry groups, leading Yusen Logistics Co. into a 4.8 percent loss. The package deliverer Yamato Holdings Co. experienced the greatest decline on the Nikkei 225 Stock Average.

The Topic lost 0.9 percent, closing its two-day fall to 2.6 percent, the most since 8th August, while the Nikkei 225 dropped 1.5 percent. The Japanese currency, however, rose 0.3 percent, gaining for a third consecutive day. Investors are now eagerly looking forward to the release of the official NFP report tomorrow as the ADP NFP yesterday showed the most new job on the American market in a year. Other reports, such as the ISM Non-Manufacturing PMI, however, came in at lower levels than forecast.

Although Japanese shares are seen dropping just as fast as they rose, investors are not moving in on the pockets created by the market appearing unwilling to risk that the Fed may actually start tapering soon. The Topix (TPX) had reached a six-month high just on 3rd December before it started dropping again. The measure climbed 43 percent this year, recording the greatest advance among the major developed markets. Today, the index traded at 1.24 times its book value, in comparison with 2.59 for the Standard and Poor’s 500 Index and 1.76 for the Stoxx Europe 600 Index yesterday.

You Might Also Like...

Sign Up to Open an Account at Banc De Binary