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☆ 'Big money never buys cheap': Why investors are waiting on Japan
▼ + stars: | 2023-05-18 | by ( Summer Zhen | ) www.reuters.com time to read: +5 min

Yet for many, the lofty milestones are a reminder that Japan's stocks have gone sideways for years, making many foreign asset allocators reluctant to venture into the market. "A very significant inflow from global investors (followed)," Powell said, "but then unfortunately, a lot of the enthusiasm has dissipated." Swiss wealth manager Union Bancaire Privée is also underweight Japan, with the policy outlook presenting currency risks. BIG MONEY WAITINGThe policy and communication challenge for new BOJ governor Kazuo Ueda is a tricky one. "Big money never buys cheap, it buys momentum."

☆ Analysis: 'Big money never buys cheap': Why investors are waiting on Japan
▼ + stars: | 2023-05-18 | by ( Summer Zhen | ) www.reuters.com time to read: +5 min

"A longer timeframe shows that foreign investors have been net sellers of Japanese equities by a considerable margin. We think long-term investors remain lightly positioned," they wrote last week in a note "Upside risks in Japanese equities". Non-residents sold nearly $4 billion of Chinese stocks in April, according to the Institute of International Finance, the first outflow in six months. Bank of America's monthly fund manager surveys show that "long" Chinese equities was the most crowded global trade in January. That has been scaled back significantly and investors have reduced their net overweight position in Chinese stocks, but they are still comfortably net overweight.

Japan takes center stage on Friday, with the April consumer price inflation report grabbing the data spotlight and the Group of Seven leaders summit in Hiroshima stealing the global political and economic limelight. The broad Topix index hit that milestone this week, and the Nikkei 225 index came within 0.5% of reaching it on Thursday. As Phil Suttle, a former World Bank economist, wrote on Thursday: "Japan is back!" G7 leaders begin a three-day summit in Hiroshima on Friday, with world market attention focused most on what they say about China. Here are three key developments that could provide more direction to markets on Friday:- Japan CPI inflation (April)- G7 leaders summit (Japan)- Fed Chair Jerome Powell speaksBy Jamie McGeever; editing by Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.

Services inflation accelerated to 1.7% in April from 1.5% in March, the data showed, suggesting that rising labour costs may be starting to feed into broader consumer inflation. "Given stubborn food price pressures, we now expect underlying inflation to peak at 4.5% by mid-year," said Darren Tay, Japan economist at Capital Economics. "But the inflationary cycle is probably at its tail end - producer price inflation has fallen significantly over the past three months. Ueda has stressed the need to keep monetary policy ultra-loose until inflation is sustainably around 2% and accompanied by wage hikes. He has also said Japan's core consumer inflation will slow back below 2% toward the latter half of the current fiscal year ending in March 2024.

☆ U.S. debt drama and data hoist dollar
▼ + stars: | 2023-05-17 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

The dollar hit a two-week peak of 136.69 yen overnight and hovered just below that at 136.54 in the Asia day. Expectations for U.S. interest rate cuts any time soon were dampened by the solid increase in April consumer spending, and by hawkish comments from Federal Reserve officials. "We expect some modest further increases in the dollar as markets continue to take out pricing for rate cuts," said Commonwealth Bank of Australia strategist Joe Capurso. "A rate hike is possible this year, though the hurdle is high." The New Zealand dollar was broadly steady at $0.6244, with investors looking ahead to a 25 bp interest rate hike next week and perhaps one more after that.

☆ Data and debt ceiling hoist dollar
▼ + stars: | 2023-05-17 | by ( Tom Westbrook | ) www.reuters.com time to read: +3 min

Data showed U.S. consumer spending appeared to have increased solidly in April, which together with hawkish remarks from Federal Reserve officials weighed on bonds and against expectations that interest rate cuts are coming soon. Interest rate futures pricing implies no chance of a rate cut in June, down from about a 17% chance seen a month ago. "Market participants continue to lower pricing for near term rate cuts by the FOMC," said Commonwealth Bank of Australia strategist Joe Capurso. "We expect some modest further increases in the dollar as markets continue to take out pricing for rate cuts. The New Zealand dollar was broadly steady at $0.6239, with investors looking ahead to a 25 bp interest rate next week and perhaps one more after that.

☆ 'Foreign investors are back': Japan stocks surge to their highest since 1990
▼ + stars: | 2023-05-17 | by ( Jihye Lee | ) www.cnbc.com time to read: +4 min

The firm noted that foreign investors bought a net 2.1 trillion yen ($15.4 billion) worth of Japanese stocks in April – adding that Japan's corporate sector remains the largest net buyer of Japanese stocks, with a volume of 1.1 trillion yen year-to-date. Central bank focusSociete Generale strategists added that their overweight position on Japanese equities remains unchanged. The Japanese yen traded at slightly weaker levels to 136.43 against the greenback on Wednesday. "Keep an overweight position on Japan equities, unhedged, and biased to banks, financials, and value," they wrote. "Specifically, we note the solid fundamentals compared with stocks on overseas markets, and we also think that expectations for structural changes/reforms could push Japanese equities up even further," wrote Japan equity strategist Kazunori Tatebe.

☆ Japan's wholesale inflation slows, may ease pressure on BOJ
▼ + stars: | 2023-05-15 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

The data may diminish market expectations that broadening inflationary pressure will prod the Bank of Japan to seek an early exit from ultra-low interest rates. "Having said that, we'll likely see price growth slow as import-driven inflationary pressure is already subsiding." Analysts are closely watching moves in wholesale prices, considered a leading indicator of consumer price trends, for clues on whether consumer inflation will heighten enough for the BOJ to phase out its massive stimulus. Japan's core consumer inflation hit 3.1% in March and an index excluding fuel costs rose at the fastest annual pace in four decades in a sign of broadening price pressure. BOJ Governor Kazuo Ueda has said the central bank will keep monetary policy ultra-loose unless the recent rise in consumer inflation is driven more by robust domestic demand, and accompanied by higher wage growth.

☆ Japan April wholesale prices rise 5.8%, but pace slows for 4th straight month
▼ + stars: | 2023-05-15 | by ( Leika Kihara | ) www.reuters.com time to read: +1 min

TOKYO, May 15 (Reuters) - Japan's wholesale prices rose 5.8% in April from a year earlier, but the pace slowed for the fourth straight month, data showed on Monday, suggesting that consumer inflation will begin to moderate as cost-push pressures ease. The rise in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, followed a 7.4% annual increase in March. The yen-denominated import price index fell 2.9% in April from a year earlier after a revised 9.6% gain in March, the Bank of Japan (BOJ) data showed, a sign the cost of importing fuel and raw material was peaking. The data underscores the BOJ's view that core consumer inflation will likely begin to slow later this year as the effect of past spikes in raw material costs begins to dissipate. Reporting by Leika Kihara; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

TOKYO, May 15 (Reuters) - A meeting of the government's top economic council on Monday focused on whether recent rises in inflation and wage growth suggest Japan is approaching a sustained exit from deflation. The fresh round of discussions between the government and central bank are looking at the role each should play in achieving sustained wage hikes, which would help reduce the risk of the country returning to deflation. Bank of Japan (BOJ) Governor Kazuo Ueda spoke about the bank's resolve to patiently maintain ultra-loose monetary policy, according to presentation material released after the meeting. Prime Minister Fumio Kishida said the government and BOJ need to coordinate closely given rising uncertainty over the economic outlook. "We're aiming to pull Japan out of deflation and achieve sustained, private demand-driven economic growth" by creating public perceptions that growth and inflation will keep rising, he said.

Major economic data from China and Japan, and a central bank rate decision from the Philippines could be the main regional drivers for Asian markets this week, with investors growing increasingly nervous about the U.S. and global macro outlook. These were some of the issues discussed at the three-day meeting of G7 finance leaders that concluded on Saturday. The MSCI World index fell 0.5% - not a big deal, perhaps, but the second weekly decline in a row and the steepest since the U.S. banking crisis blow-up two months ago. Japan's first-quarter GDP figures will be released on Wednesday, and perhaps more importantly, the latest inflation numbers are out on Friday. Core inflation is far higher than the Bank of Japan would like and is expected to have re-accelerated to 3.4% in April.

☆ Japan's Kishida to order assessment on wage outlook by govt, BOJ- Nikkei
▼ + stars: | 2023-05-14 | by ( ) www.reuters.com time to read: +1 min

TOKYO, May 14 (Reuters) - Japanese Prime Minister Fumio Kishida will issue an order on Monday for the government and the central bank to conduct an assessment on whether recent wage hikes would be sustainable, the Nikkei newspaper reported on Sunday. The assessment will focus on whether wealth is distributed in a way that allows households to weather the rising cost of living, and help sustainably achieve the Bank of Japan's 2% inflation target, the paper said without citing sources. Kishida will issue the order at a meeting of the government's key economic council on Monday, and will consider having the council conduct a regular assessment on the wage outlook, the Nikkei said. The assessment will seek to clarify the role the government and the BOJ must play in achieving 2% inflation, and how they should respond when inflation accelerates, the paper said. Japan's core consumer inflation hit 3.1% in March, well above the BOJ's 2% target, as companies pass on rising raw material costs to households.

While the communique made no mention of the U.S. debt ceiling stalemate, it figured constantly in discussions. "We need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook," they added in the communique after the meeting. G7 central bank chiefs vowed to combat "elevated" inflation and ensure expectations on future price moves remained well-anchored, a sign many of them will not let their guard down against stubbornly high inflation. CHINA AND SUPPLY CHAINSSeeking to reassure investors after recent U.S. bank failures, the G7 finance chiefs retained an April assessment that the global financial system was "resilient". In the communique, the finance leaders set a year-end deadline for launching a new scheme to diversify global supply chains.

☆ G7 central banks see need to weigh effects of past rate hikes -BOJ's Ueda
▼ + stars: | 2023-05-13 | by ( Leika Kihara | ) www.reuters.com time to read: +1 min

NIIGATA, Japan, May 13 (Reuters) - Many central bank governors from the Group of Seven (G7) rich nations appeared to feel the impact of past interest rate hikes has yet to show fully as they look to guide future monetary policy, Bank of Japan Governor Kazuo Ueda said on Saturday. "Participants seemed to share the understanding that the effect of past interest rate hikes has yet to fully show on their economies and inflation, and could begin to appear more ahead," Ueda told a news conference after the gathering. "Many said they wanted to guide monetary policy, taking that point in mind," he added. "I told the G7 meeting that Japan is maintaining ultra-loose monetary policy to sustainably and stably achieve the BOJ's 2% inflation target," he said. Ueda and Finance Minister Shunichi Suzuki spoke at the news conference as Japan is the chair of this year's G7 finance leaders' gathering in Niigata, which concluded on Saturday.

☆ G-7 central banks see need to weigh effects of past rate hikes, BOJ's Ueda says
▼ + stars: | 2023-05-13 | by ( ) www.cnbc.com time to read: +1 min

Governor of the Bank of Japan Kazuo Ueda speaks during the presidency press conference at the G7 Finance Ministers and Central Bank Governors' Meeting in Niigata on May 13, 2023. Many central bank governors from the Group of Seven (G-7) rich nations appeared to feel the impact of past interest rate hikes has yet to show fully as they look to guide future monetary policy, Bank of Japan Governor Kazuo Ueda said on Saturday. "Many said they wanted to guide monetary policy, taking that point in mind," he added. "I told the G7 meeting that Japan is maintaining ultra-loose monetary policy to sustainably and stably achieve the BOJ's 2% inflation target," he said. Ueda and Finance Minister Shunichi Suzuki spoke at the news conference as Japan is the chair of this year's G7 finance leaders' gathering in Niigata, which concluded on Saturday.

☆ G7 to vow diversifying of supply chains, filling bank regulatory gaps -draft
▼ + stars: | 2023-05-12 | by ( ) www.reuters.com time to read: +4 min

In the draft communique, the G7 central banks said they remained "strongly committed" to achieving price stability and ensuring inflation expectations stayed well-anchored. "Diversification of supply chains can contribute to safeguarding energy security and help us to maintain macroeconomic stability," the draft communique said. But it said G7 countries will work to ensure foreign investment in critical infrastructure "does not undermine the economic sovereignty of host countries." On banking-system woes, the draft communique said the financial system was resilient due to regulatory reforms implemented after the 2008 global financial crisis. "We will address data, supervisory, and regulatory gaps in the banking system," the draft communique said.

☆ BOJ debated progress in hitting price goal at Ueda's debut meeting
▼ + stars: | 2023-05-11 | by ( Leika Kihara | ) www.reuters.com time to read: +1 min

TOKYO, May 11 (Reuters) - Some Bank of Japan (BOJ) policymakers saw the country making progress towards sustainably hitting the bank's 2% inflation target, a summary of opinions at its April meeting - the first one to be chaired by governor Kazuo Ueda - showed on Thursday. "Japan's economy is showing signs of achieving a positive cycle of (rising) wages and inflation. The BOJ needs to judge the trend accurately, so its policy response doesn't end up being behind the curve," one opinion showed. The members agreed on the need to keep monetary policy ultra-loose for the time being due to uncertainty over the overseas economic outlook and whether recent wage hikes will be sustained beyond next year, the summary showed. Reporting by Leika Kihara; Editing by Sandra MalerOur Standards: The Thomson Reuters Trust Principles.

☆ Dollar awaits inflation data, rattled by debt ceiling impasse
▼ + stars: | 2023-05-10 | by ( Amanda Cooper | ) www.reuters.com time to read: +3 min

SINGAPORE, May 10 (Reuters) - The dollar seesawed on Wednesday after U.S. President Joe Biden and top lawmakers made no headway in the debt ceiling crisis, although volatility was minimal ahead of inflation data that could be instrumental in determining where interest rates head. The dollar held onto most of Tuesday's gains, thanks to another sharp rise in short-dated Treasury yields and to the nervousness that prevailed over Wednesday's U.S. inflation data. The euro was last down 0.1% at $1.0947, as was sterling , which eased 0.1% to $1.2605. Against a basket of currencies, the dollar index edged up 0.14% to 101.76, having earlier fallen by as much as 0.11%. The Japanese yen was steady against the dollar at 135.25 and fell 0.1% against the euro to 148.075, while the Australian dollar fell 0.2% to $0.675.

☆ Dollar braces for inflation, rattled by debt ceiling impasse
▼ + stars: | 2023-05-10 | by ( Amanda Cooper | ) www.reuters.com time to read: +3 min

SINGAPORE, May 10 (Reuters) - The dollar seesawed on Wednesday after U.S. President Joe Biden and top lawmakers made no headway in the debt ceiling crisis, although volatility was minimal ahead of inflation data that could be instrumental in determining where interest rates head. Biden, McCarthy and the three other top congressional leaders are set to meet again on Friday. The dollar held onto most of Tuesday's gains, thanks to another sharp rise in short-dated Treasury yields and to the nervousness that prevailed over Wednesday's U.S. inflation data. Against a basket of currencies, the U.S. dollar index steadied at 101.64. Elsewhere, the Japanese yen was steady against the dollar at 135.25 and against the euro at 148.155, while the Australian dollar eased 0.1% to $0.6755.

☆ Dollar softer as US debt ceiling crisis unresolved, inflation data eyed
▼ + stars: | 2023-05-10 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, May 10 (Reuters) - The dollar weakened broadly on Wednesday after U.S. President Joe Biden and top lawmakers failed to break a deadlock on the debt ceiling crisis, though currency moves were marginal amid caution ahead of U.S. inflation data later in the day. The two, however, agreed to further talks and committed their aides to daily discussions about areas of possible agreement. "There has been a lot of attention lately on the debt ceiling issues," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA). Also preoccupying investors was U.S. inflation data, with economists polled by Reuters expecting a 5.5% year-on-year increase in core consumer prices for April. "I think markets are already expecting the Bank of Japan to make some moves."

☆ Dollar softer as U.S. debt ceiling crisis unresolved, inflation data eyed
▼ + stars: | 2023-05-10 | by ( ) www.cnbc.com time to read: +3 min

An employee deals with U.S. one-hundred dollar banknotes at a bank on June 16, 2022 in Hai an, Nantong City, Jiangsu Province of China. The dollar weakened broadly on Wednesday after U.S. President Joe Biden and top lawmakers failed to break a deadlock on the debt ceiling crisis, though currency moves were marginal amid caution ahead of U.S. inflation data later in the day. "There has been a lot of attention lately on the debt ceiling issues," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. Also preoccupying investors was U.S. inflation data, with economists polled by Reuters expecting a 5.5% year-on-year increase in core consumer prices for April. "I think markets are already expecting the Bank of Japan to make some moves."

SINGAPORE, May 9 (Reuters) - The dollar clung to modest gains against major currencies on Tuesday but remained rangebound as traders awaited U.S. debt ceiling talks and tried to digest how a host of conflicting economic data will influence monetary policy and global growth. Closely-watched U.S. inflation data due on Wednesday is likely to set the tone for markets, after stronger-than-expected jobs data last week. Against a basket of currencies, the U.S. dollar index edged up 0.25% to 101.68, but remained near recent lows as traders eye a peak in U.S. rates. Sterling was broadly flat and bought $1.2599, ahead of Thursday's central bank policy meeting. ========================================================Currency bid prices at 10:18AM (1418 GMT)Reporting by Rae Wee Editing by Shri NavaratnamOur Standards: The Thomson Reuters Trust Principles.

☆ Dollar edges up as market looks to U.S. debt ceiling talks, inflation data
▼ + stars: | 2023-05-09 | by ( Iain Withers | ) www.reuters.com time to read: +2 min

SINGAPORE, May 9 (Reuters) - The dollar edged up against major currencies on Tuesday as traders awaited clarity on U.S. debt ceiling talks and new inflation data for a clearer picture of the economic outlook and the Federal Reserve's likely rate-hiking path. Closely-watched U.S. inflation data due on Wednesday is likely to help set the tone for markets, after stronger-than-expected jobs data last week as the Fed considers how quickly to tighten rates as prices rise. Any Fed policy tweaks will have to be weighed against a backdrop of recent turmoil in the U.S. banking sector and a political impasse in Washington over resolving the country's debt ceiling and avoiding a default, analysts said. Elsewhere, sterling last bought $1.25975, down 0.1%, ahead of Thursday's central bank policy meeting. The Bank of England looks set to raise interest rates to 4.5%, as it tries to fight the highest inflation rate in Western Europe.

☆ Dollar rises slightly, sterling hovers near one-year high
▼ + stars: | 2023-05-09 | by ( Rae Wee | ) www.reuters.com time to read: +4 min

The offshore yuan last traded 0.1% lower at 6.9287 per U.S. dollar. The benchmark 10-year yield was last at 3.4995%, after rising more than five basis points in the previous session. There's still a tightening in credit conditions that is coming ... but overall, at this stage, the survey is not depicting a credit crunch ahead. The Aussie was last 0.05% lower at $0.67775, after having risen to a roughly three-week top of $0.6804 on Monday. The kiwi fell 0.2% to $0.6332, having similarly scaled a one-month high of $0.63585 the day earlier.

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