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☆ European drug discounts will ruffle U.S. funder
▼ + stars: | 2023-04-28 | by ( ) www.reuters.com time to read: +2 min

LODNON, April 28 (Reuters Breakingviews) - Europe’s plan to slash prices on pharmaceutical drugs could set off tensions with the U.S. The European Union proposed on Wednesday a legislative overhaul of the sector across the 27-nation bloc. This would incentivise drug makers like AstraZeneca (AZN.L) and GSK (GSK.L) to sell to all European countries at once. And although the U.S. is trying to tackle soaring prices with the Inflation Reduction Act, Europe’s falling drug costs will widen the gap once again. This creates a problem for the U.S. government, which funds more drug development than any other country.

☆ Morning Bid: Amazon cools, Intel warms, Japan hesitates
▼ + stars: | 2023-04-28 | by ( ) www.reuters.com time to read: +5 min

[1/2] A smartphone with a displayed Intel logo is placed on a computer motherboard in this illustration taken March 6, 2023. But the dramatic re-acceleration of Big Tech stocks this week - where the NYFANG+TM (.NYFANG) index of the top 10 Big Tech stocks is now up 37% so far this year - is competing with multiple macro narratives that are increasingly hard to read. With the Fed meeting in view, the release of March PCE price inflation data later on Friday tops the diary. Wall St stock futures fell back 0.4% after a wild ride in Amazon.com shares overnight. With much of Europe and Asia closed on Monday for the May Day bank holiday, Asia bourses advanced in Wall St's slipstream but Europe retreated sharply on some jarring corporate updates.

☆ Japanese yen to move sharply higher if BOJ abandons ultra-loose monetary policy, strategist says
▼ + stars: | 2023-04-27 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailJapanese yen to move sharply higher if BOJ abandons ultra-loose monetary policy, strategist saysGiles Keating, director at Bitcoin Suisse, discusses market sentiment, the outlook for the Japanese yen ahead of the Bank of Japan’s policy meeting and the outlook for the banking sector.

That means portfolio managers are having to factor a stronger yen into global stock selection in way they have not for years, with some even anticipating mergers and acquisitions as the Japanese market revs up. "The trigger for the revaluation of the Japanese markets is higher rates and then a stronger yen. Japan's insurers and pension funds alone hold $1.84 trillion in foreign assets, Deutsche Bank calculates, greater than the size of South Korea's economy. "Policy normalisation could turn back the clock for Japanese investors," Deutsche Bank strategists said in a note. Carmignac, like many global investors, has maintained an underweight position towards Japanese stocks but, Leroux said, it was looking to raise this to neutral.

☆ Asia markets lower as new Bank of Japan chief chairs first policy meeting
▼ + stars: | 2023-04-27 | by ( Lim Hui Jie | ) www.cnbc.com time to read: +1 min

A Japanese national flag flies outside the Bank of Japan headquarters in Tokyo, Japan, on Sept. 27, 2021. The Japanese central bank has for years adopted ultra-easy monetary policy in a bid to achieve its ever elusive inflation target. Asia-Pacific market were lower on Thursday as investors focus on the Bank of Japan's first policy meeting led by new BOJ governor Kazuo Ueda. Ueda is expected to maintain the ultra loose monetary policy of predecessor Haruhiko Kuroda for now, but expectations are that he will plot a path out of this policy in the future, according to media reports. Hong Kong's Hang Seng index also seems set for a lower open as futures tied to the index traded at 19,735, compared to the 19,757 close on Wednesday.

Dealers say BOJ efforts to make short selling more expensive have also worked and that investors are simply avoiding the market, rather than crowding into bets on yields rising. Nearly 90% of economists polled by Reuters said they expect no policy change. Ueda's most recent remarks have stressed the need to keep policy settings loose for now, without ruling out the possibility of future changes. On Sunday the Sankei newspaper reported the BOJ is considering a review of the impact of its policy settings, which could foreshadow changes. Nomura strategist Naka Matsuzawa said the path ahead would be a balance between getting a policy change done, and improving communication.

☆ New BOJ chief's first task may be to tweak forward guidance
▼ + stars: | 2023-04-26 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

A shift to a less dovish bias could signal a near-term tweak to YCC, analysts say. GUIDANCE QUESTIONSUeda left few clues on how soon the guidance could change, telling an inaugural news conference on April 10 that the board will "discuss all options at each of our policy meetings." Under current projections made in January, the BOJ expects core consumer inflation to hit 1.6% this year and 1.8% in fiscal 2024. Many analysts expect the BOJ to project inflation to hover near, but stay slightly below, the bank's 2% target for both fiscal 2024 and 2025. Ueda is expected to hold a news conference after the policy meeting on Friday to explain the bank's decision.

☆ BOJ's Ueda sees tough balance in combating cost-push inflation
▼ + stars: | 2023-04-26 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

Summary Striking right balance on growth, inflation difficult - UedaJapan likely to see cost-push inflation subside - UedaUeda to chair first BOJ policy meeting this weekTOKYO, April 26 (Reuters) - Bank of Japan Governor Kazuo Ueda said on Wednesday the central bank's response to cost-push inflation would depend on economic conditions. "In general, dealing with cost-push inflation is very difficult for central banks. On the other hand, you don't want to tighten monetary policy knowing that cost-push inflation will cool the economy," Ueda told parliament. Ueda added that Japan will see cost-push inflation subside as prices of imported raw materials have likely peaked. Ueda's comments compare with those of his predecessor Haruhiko Kuroda, who repeatedly brushed aside the chance of responding to cost-push inflation with monetary policy.

And, as it's global liquidity that matters, the bowl is also kept brimming as the Bank of Japan continues to buy government bonds at pace. But a study looking at the U.S. banking shock that led to the failure of Silicon Valley Bank and Signature Bank last month and deposit runs across many regional banks suggests a different angle - a 'deposit glut' from within the richest countries that is increasingly unstable. "In a context of rising wealth inequality and growing corporate savings, an increasing share of bank deposits is uninsured and held by sophisticated agents," Vuillemey wrote. "This implies that these deposits are increasingly fragile, and that deposit insurance schemes ... are slowly losing bite." As illustrated in Technicolor in the SVB run, big uninsured deposits are volatile - sensitive as they are to any hint on the bank's health and moveable at push of a button.

☆ U.S. dollar gains as risk appetite wanes
▼ + stars: | 2023-04-25 | by ( ) www.cnbc.com time to read: +2 min

The U.S. dollar index climbed 0.48% to 101.84, having dropped more than 4% since March 8. A weak consumer confidence report and a decline in Federal Reserve manufacturing data further added to the dollar's safe-haven appeal. Data showed U.S. consumer confidence fell to a nine-month low in April, a survey showed on Tuesday. The Conference Board said its consumer confidence index fell to 101.3 — the lowest since July 2022 - from a revised 104.0 in March. The yen fell 0.39% to 133.70 per dollar.

☆ Dollar edges lower; on track for second straight monthly loss
▼ + stars: | 2023-04-24 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The U.S. dollar dipped against most major currencies in early Asia trade, with the euro and sterling rising 0.05% to $1.0994 and 0.02% to $1.2447, respectively. "There's nothing, as yet, to hang your hat on rate cuts in the second half of the year." Elsewhere, the kiwi gained 0.07% to $0.6143, while the U.S. dollar index slipped 0.02% to 101.66. The index was eyeing a monthly loss of close to 0.9%, having fallen more than 2% in March. In Asia, the Bank of Japan's policy meeting this week takes centre stage, as it marks the first meeting to be chaired by new BOJ Governor Kazuo Ueda.

☆ Asia-Pacific markets open mixed after Wall Street posts weekly loss
▼ + stars: | 2023-04-24 | by ( Lim Hui Jie | ) www.cnbc.com time to read: 1 min

People picnic on the green roof of Marina Barrage in Singapore on Oct. 10, 2022. Asia-Pacific markets are trading mixed on Monday, ahead of a busy week of key economic releases in the region. Japanese markets were all higher, with the Nikkei 225 and the Topix both higher by 0.2%. In Australia, the S&P/ASX 200 fell 0.26%, while South Korea's Kospi slid 0.37% and the Kosdaq was slightly above the flatline. Some Southeast Asian markets are closed today for a holiday, including Singapore, Malaysia and Indonesia.

☆ Dollar slides as rate cuts priced in; yen falls ahead of BOJ meeting
▼ + stars: | 2023-04-24 | by ( ) www.cnbc.com time to read: +3 min

The dollar fell to a more than one-week low against major currencies on Monday in generally thin trading, as investors continued to price in interest rate cuts this year by the Federal Reserve after a widely expected rate increase at next week's policy meeting. Fed policymakers are widely expected to raise rates by another 25 bps at next week's meeting, but they are seen pausing in June. The rate futures market has also factored in roughly 50 bps of rate cuts by the end of the year. There were likewise hawkish remarks from Belgian central bank chief and ECB policy maker Pierre Wunsch. Beyond the excitement of the euro/yen cross, currency markets were quiet, as traders waited for key central bank meetings, the first of which is the BOJ on Friday, the first Ueda will chair.

☆ BOJ chief wants 'quite strong' inflation before tweaking yield control policy
▼ + stars: | 2023-04-24 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

"At present, trend inflation is below 2% so we must maintain monetary easing," Ueda told parliament. "But when trend inflation is projected to reach 2%, the BOJ must normalise monetary policy," he added. Ueda's comments come ahead of a two-day BOJ policy meeting that kicks off on Thursday, where the board will produce fresh quarterly growth and inflation forecasts. "The BOJ's forecasts of trend inflation for half a year, one year and one-and-a-half years ahead must be quite strong and close to 2%. "The BOJ has already been conducting many estimates on how a normalisation of monetary policy could affect its finances," he said.

☆ Asia stocks off to slow start in earnings-rich week
▼ + stars: | 2023-04-24 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) eased 0.1%, while Japan's Nikkei (.N225) nudged up 0.2%. S&P 500 futures and Nasdaq futures both eased 0.2% ahead of a busy week of earnings. The U.S. House of Representatives could this week vote on a Republican plan to raise the debt ceiling in exchange for spending cuts. Figures on U.S. wages and economic growth due this week will likely reinforce the case for further tightening. Oil prices also lost ground last week, though planned production cuts from OPEC offer some support.

☆ Morning Bid: Tech tally in focus, China alarms Europe
▼ + stars: | 2023-04-24 | by ( ) www.reuters.com time to read: +5 min

Otherwise, a packed earnings season dominates this week's investment radar as more than a third of S&P500 companies report. Including Intel (INTC.O), those five tech stocks have accounted for two-thirds of the S&P500's gains this year - with the Artificial Intelligence craze sparked by the emergence of ChatGPT adding a new non-cyclical attraction to the sector. But before markets get a taste of Q1 tech profits, the reverberations from last month's banking blow-up are still being absorbed. European stocks were slightly negative and U.S. stock futures also marginally in the red ahead of Wall Street's open. The dollar was mixed - up against Asian currencies but off against European currencies amid hawkish European Central Bank soundings on interest rates.

This comes as month-end approaches and investors look ahead to the U.S. central bank's May 2-3 policy meeting. The advance estimate of first-quarter U.S. GDP growth is out this week, and big tech earnings from Alphabet, Microsoft and Amazon are due. Tesla shares fell 13% last week after an earnings miss, the biggest fall in almost a year. Ueda has insisted that the current policy will remain in place for now, damping down prospects of a shift this week. The central bank's revised inflation and growth forecasts might also give a clue as to when it will tweak or abandon YCC.

☆ Dollar snaps five-week losing streak as bets on U.S. rate hike in May firm
▼ + stars: | 2023-04-21 | by ( ) www.cnbc.com time to read: +3 min

Bundles of U.S. 100 dollar banknotes arranged at the Shinhan Bank headquarters, a unit of Shinhan Financial Group Co., in Seoul, South Korea, Sept. 14, 2022. The dollar slipped against the Japanese yen in early Asia trade, though it rose against most major currencies, with the U.S. dollar index edging 0.06% higher to 101.84. Rising expectations that the Fed will raise interest rates by 25 basis points in May have lent some support to the greenback. "The U.S. economy is heading to recession," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia. "I don't think Ueda is going to change policy at his first meeting next week," said CBA's Capurso.

☆ Dollar snaps five-week losing streak as bets on US rate hike in May firm
▼ + stars: | 2023-04-21 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The dollar slipped against the Japanese yen in early Asia trade, though it rose against most major currencies, with the U.S. dollar index edging 0.06% higher to 101.84. Rising expectations that the Fed will raise interest rates by 25 basis points in May have lent some support to the greenback. "I don't think Ueda is going to change policy at his first meeting next week," said CBA's Capurso. In other currencies, the Aussie was last 0.07% lower at $0.6738, while the kiwi fell 0.12% to $0.61705. Data out on Thursday showed that New Zealand's consumer price inflation was lower than expectations in the first quarter, though it remained near historic highs.

☆ Recession fears set stocks on course for weekly drop
▼ + stars: | 2023-04-21 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

Overnight figures showed more Americans filing claims for jobless benefits and manufacturing activity in the mid-Atlantic region slumping to its lowest level in nearly three years. Leading Economic Index, a gauge of future economic activity, also dropped to its lowest level since November 2020 overnight and it is signalling a recession starting mid-2023. Tesla (TSLA.O) shares tumbled 9.7% after the electric vehicle maker posted its lowest quarterly gross margin in two years. The yen hovered at 134.11 to the dollar, though the New Zealand dollar nursed losses at $0.6162 after Thursday's softer-than-expected inflation data. In the oil market, at $80.79 a barrel, Brent is also below its 50-day moving average for the first time since oil producers unexpectedly announced extra production cuts two weeks ago.

☆ BOJ unlikely to move in April, most economists say: Reuters poll
▼ + stars: | 2023-04-21 | by ( Kantaro Komiya | ) www.reuters.com time to read: +3 min

The BOJ will likely keep YCC unchanged at next week's meeting as it awaits more evidence of sustained wage growth, sources have told Reuters. Only three of 27 economists, or 11%, said the BOJ will start to scale-back its monetary stimulus next week, whereas 11 (41%) opted for the June meeting, the April 12-19 poll showed. He added the lowered U.S. and Japanese yields after the financial turmoil also decreased the urgency to tweak YCC, which has previously faced market attacks to break the upper limit. Compared with the March poll, fewer economists expect a sudden abolition of YCC to come without warning. Half of the 24 respondents anticipated another YCC tweak, if not an outright end, in April-June.

☆ Japan's broadening inflationary pressures test Bank of Japan's dovish stance
▼ + stars: | 2023-04-21 | by ( ) www.cnbc.com time to read: +1 min

Japan's consumer inflation held steady above the central bank's target in March and an index excluding fuel costs rose at the fastest annual pace in four decades, data showed, indicating broadening price pressure in the world's third-largest economy. "Inflationary pressure is proving stronger than expected and could last for longer than thought," said Shinke Yoshiki, chief economist at Dai-ichi Life Research Institute. "But there's still a lot of uncertainty on whether wages will rise durably and underpin consumption, which may keep the BOJ in a holding pattern." The core consumer price index, which excludes volatile fresh food, but includes energy costs, rose 3.1% in March from a year earlier, government data showed on Friday, matching a median market forecast. It followed February's increase of 3.1%, which was a sharp slowdown from January's 41-year high of 4.2%, due largely to the effect of government subsidies to soften the cost of utility bills for homes.

The core consumer price index (CPI), which excludes volatile fresh food, but includes energy costs, rose 3.1% in March from a year earlier, government data showed on Friday, matching a median market forecast. The year-on-year rise in the so-called "core core" index was the fastest since December 1981, when Japan was experiencing an asset-inflated bubble economy. Persistent rises in global commodity prices have prodded many Japanese companies, long reluctant to hike prices, to finally pass on their higher costs to consumers, pushing up consumer inflation to well above the BOJ's 2% target. Markets are focusing on the BOJ's quarterly outlook report due after the meeting, which will include inflation forecasts extending through fiscal 2025. Reporting by Leika Kihara and Takahiko Wada; Editing by Clarence FernandezOur Standards: The Thomson Reuters Trust Principles.

☆ BOJ open to tweaking YCC this year if wage momentum holds - sources
▼ + stars: | 2023-04-20 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

"Given looming overseas economic risks, it's appropriate to maintain ultra-loose monetary policy now," said one of the sources, a view echoed by two more sources. Others in the BOJ see scope to debate a tweak possibly in the coming months, emboldened by big pay hikes offered by major firms in annual spring wage talks, the sources say. An intensifying labour shortage will likely keep companies under pressure to hike wages, even if the economy slows, according to those who see room for a near-term policy tweak. Market developments will also be crucial in determining the timing of a policy tweak, they say. Ueda has repeatedly said the BOJ will maintain ultra-loose monetary policy, including YCC, as sustained achievement of 2% inflation has yet to come into sight.

Steep falls in the shares of these companies and regional banks, a major source of investor concern, dragged down the main indices. This is the first major economic indicator since new Bank of Japan Governor Kazuo Ueda took over earlier this month. Foreign investors poured nearly $12 billion into Japanese equities last week, their biggest weekly net purchases since at least January 2018. Here are three key developments that could provide more direction to markets on Friday:- Japan inflation (March)- Japan and Australia flash PMIs (April)- South Korea producer price inflation (March)By Jamie McGeever;Our Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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