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rffrydr
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 Posted: Fri Mar 03, 2006 12:25 am Post subject: JAPAN |
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Core rate up .5%; 3 in a row:
"Mitsubishi UFJ Securities senior strategist Naomi Hasegawa said remarks this morning by Prime Minister Junichi Koizumi fueled conjecture that the central bank will soon end its present policy.
'[Changes in] consumer prices are coming in above zero and we are seeing signs of getting out of deflation,' Koizumi told a parliamentary committee.
His comments were his most positive yet on recent indications that the economy is winning its battle with falling consumer prices. Previously, Koizumi had insisted that it was too soon to say that the economy was coming out of deflation."
Bonds and stocks were short going in. End-of-day showed resiliency, (complaceny?)
Hey Henry, Devil's advocate: with Japanese debt at a Godzilla-sized 160% GDP on the worlds fastest aging population (and most afraid of foreign workers) do they have any choice BUT to reflate their way out? And politicians want a decade for "reforms."
An end to quantiative easing may be announced at the end of Japanese Fiscal Year--but this could take a long, long time to play out. Markets 1st "verdict."
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HenryTo
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rffrydr
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| Posted: Mon Jul 06, 2009 10:18 am Post subject: |
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As nine secondary banks appeal for govt. aid time to start working up (yet another) position in japanese equities. Oil has topped and that other great indicator of world assets, Mrs. Watanbe, has, finally, nowhere else to turn. GaveKal siezes on this point:
| Quote: | | * Mrs Watanabe is looking inward: With nearly US$15 trillion in financial assets, Japanese investors are some of the most influential asset allocators in the world. This is partly because, unlike say US investors, they are more likely to venture abroad. Indeed, Mrs Watanabe’s hunger for yield is legendary, which is why so many Japanese investment flows have moved into higher-yielding currencies. However, if we are going to see a “normalization of rates,” as mentioned above, then there is less reason for Mrs Watanabe to invest abroad. Moreover, because everyone else in the world has nearly zero interest rates these days, there is already fewer yield advantages in shipping investments overseas. This may explain why we have been seeing increased net buying in Japanese equities by domestic investors. In June, Japanese net equity purchases by residents added up to ￥282bn ($3bn). |
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rffrydr
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| Posted: Fri Jun 12, 2009 8:38 am Post subject: |
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Here on the eve of the "BRIC" assembly in Russia and general EEM hubris, the quiet giant steps up:
US bonds
Published: June 12 2009 09:31 | Last updated: June 12 2009 15:26
At last, some respite for the beleaguered US Treasuries market. On the eve of the G8 meeting this weekend, Kaoru Yosano, Japan’s finance minister, said his faith in US government bonds was “absolutely unshakeable”. The market reaction was fast. Yields on the benchmark 10-year bond fell some 6 basis points to 3.8 per cent.
Given that Japan is the world’s second biggest owner of Treasuries, Yosano may have been talking his own book. Still, it was a happy coda to a difficult week for US debt markets. Treasury yields rose to 4 per cent at one ten-year auction this week, their highest this year. Given that the US may have to borrow some $3,250bn this year, this increased worries that the US could face a buyers’ strike for its debt, especially by foreign central banks, among its biggest purchasers.
Such fears, while perennial, look overblown. It is true that investors, including foreign central banks, are demanding higher yields. Given the rise in inflation risks, that is reasonable. Yet there is little sign that foreign demand is about to stop entirely. After all, at last week’s scary bond sale, “indirect bidders”, a category that includes foreign central banks, still bought 34 per cent of the notes, compared to 26 per cent during the past ten auctions.
Among the Treasury market’s big buyers, China, Russia and Brazil regularly huff and puff about the domination of the US dollar. As part of plans to diversify their foreign currency holdings, they have also said they will contribute $110bn to a planned International Monetary Fund bond issue. Even so, with $2,500bn of combined foreign reserves between them, there is nowhere else other than the world’s most liquid bond market where they can put their money. The US dollar’s position’s as the world’s reserve currency “isn’t under threat”, as Yosano said. That’s true, for now.
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rffrydr
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| Posted: Wed May 27, 2009 9:05 am Post subject: |
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Japan’s soybean imports may fall 5.7% this year to a 34 year low due to high prices. Imports expected at 3.5 mmts.
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rffrydr
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| Posted: Tue May 19, 2009 7:51 am Post subject: |
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Japan is no mirror I have argued below, and neither is its deflation. At it's most abstract deflation is a minus sign--thus a relative value. Thus the starting point is as important as any trend. And where do we start in Japan? It's an island and its postwar reformation would make sure that one thing would remain the same. Japan's economy was a fortress built not so much on the obvious grumbled about tariffs and "health standards," its "creative destruction" that takes cars off the road after three years, its "maturity," its distance--but its price. Under the guise of quality (not nothing but the "best," but nothing but the "purest") everything was set up to cost so much--at all levels of economic particaption that, as a whole, the country "priced itself out of the market."
The "deflationary spiral," though undeniable, has to be marked to this very different market. The tension springs forth only where the ideology conflicts, such as energy and the national obsession with efficiency. There such non-marketable industries like BP's failed solar can thrive.
There is of course a cultural and demographic overlay, as well as the historical price it must pay in the world's most sought-after economy, china. After all that, then measure its consumption. Though it is clear we did not "learn the lesson of the zombie banks" the lessons we need to learn are our own.
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rffrydr
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rffrydr
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rffrydr
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rffrydr
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| Posted: Tue Mar 24, 2009 12:05 pm Post subject: |
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rffrydr
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| Posted: Thu Mar 12, 2009 6:28 am Post subject: |
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RIO has already made it plain, you can't hide behind those bad bad financials. This lesson is now rising to a country level:
| Quote: | Japanese equity issuance
Published: March 12 2009 08:23 | Last updated: March 12 2009 08:23
While European banks have drowned investors in deeply discounted rights issues, Japanese financials have followed a more dignified approach. The three megabanks have – so far – largely placed preferred securities with existing stakeholders, such as insurers, or tapped equity markets. Nomura Securities, now raising up to $3.3bn in equity, is doing so mainly via a public offering.
Can Japan Inc continue to avoid more desperate measures? Not if the recently concluded reporting season, marked by red ink and ravaged balance sheets, is anything to go by. Manufacturers, in particular, are burning through cash and rapidly eroding their shareholders’ equity.
Toshiba Corporation, subject of rumblings about a $3-5bn offering, expects a net loss of $3bn in the year ending on March 31. In the nine months to end-December it ripped through more than $4bn of cash; the environment has subsequently worsened and the diversified electronics conglomerate has continued to buy into (loss-making) companies. Shareholders’ equity has been mashed down by a third in the nine months to $7.4bn. Gross interest-bearing debt to equity now stands at 2.7 times, more than double the previous year’s level.
More cash-raising thus looks inevitable, particularly as the March 31 year-end approaches. Panasonic, the TV manufacturer, pulled off a coup of sorts last week when it launched Asia’s biggest corporate bond (ex financials), raising $4bn. But that is rare: other bond issues have gone under-subscribed and even blue-chip manufacturers are struggling to raise foreign currency debt now that so many overseas lenders are retreating.
Even if domestic lenders stump up, obeying the code of relationship banking, many borrowers will still need to rebuild equity cushions. Resisting on the grounds that buyers are few and prices low will become harder. Deeply discounted rights issues, now a foreign concept, are coming to Japan. |
LEX
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rffrydr
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rffrydr
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| Posted: Wed Mar 04, 2009 7:13 am Post subject: |
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If Toyota becomes a template we have a potentially huge new source of "quantitative lending":
| Quote: | Asian reserves
Published: March 3 2009 09:15 | Last updated: March 3 2009 18:53
Toyota Motors, like automakers worldwide, is topping up the tank from state coffers. The funds will be pumped into its financing arm – via a policy bank – from Japan’s $1,000bn foreign exchange reserves. That a group once dubbed the Bank of Toyota for its financial solidity needs such help is a bleak sign of the times.
It is also a neat solution to another problem. At root, foreign reserves exist to avert currency crises: when devaluation spirals out of control, central banks deploy their dollars to buy local currency. Asia, whose kitties were demonstrably not up to this task in 1997-98, has learnt its lesson. Now, however, the region’s $4,000bn of reserves are excessive.
Conventional benchmarks, such as three to four months import cover or the equivalent of short-term external debt, take up a tiny portion of, say, China’s $2,000bn booty. That is a blessing for the US, its debt stashed from Beijing to Bangkok, but creates unproductive assets for Asia.
Sure, certain central banks, such as Russia’s and Korea’s, have used reserves to support the currency. For the rest, however, bloated reserves now look more like a liability, especially if local currencies appreciate. India is among those that have eaten steep sterilisation costs. There is an opportunity cost too. If excess reserves were, for example, deployed in assets with a 3 per cent premium over returns on risk-free assets, the benefits could tot up to as much as 1 per cent of gross domestic product for some countries.
In the current environment, pressing reserves into national service looks smarter. China, for example, turned to its forex reserves when it recapitalised the banks earlier this decade; India hopes to use its surplus funds for infrastructure. Japan’s decision to morph reserves into loans for cash-hungry companies continues the trend – although the ear-marked $5bn is a mere drop in the ocean. |
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HenryTo
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| Posted: Mon Mar 02, 2009 10:18 pm Post subject: |
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The year-over-year growth in the Japanese monetary base grew at its fastest pace since May 2004:
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Japan Feb monetary base rises 6.4 pct yr/yr - BOJ
Mon Mar 2, 2009 7:03pm EST
TOKYO, March 3 (Reuters) - Japan's monetary base rose 6.4 percent in February from a year earlier, increasing for the sixth straight month, Bank of Japan data showed on Tuesday.
Current account deposits at the central bank rose 65.8 percent in February after jumping 41.8 percent in January.
The pace of rise in the balance has accelerated after the BOJ began offering 0.1 percent interest on excess reserves that commercial banks park at the central bank from mid-November, a temporary step aimed at facilitating smooth fund supply. The measure expires in mid-April. |
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rffrydr
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| Posted: Mon Mar 02, 2009 9:53 am Post subject: |
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At times like this it's good to remember just how big and how diversified the US economy is. This is especially true with commodities:
US beef exports to Japan are expected to rise 35% this year to 100,000 tons. This from a US Meat Industry association.
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