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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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rffrydr
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HenryTo
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| Posted: Tue Aug 24, 2010 11:24 am Post subject: |
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So the symmetrical triangle chart pattern that was evident in the Yen/$ relationship resolved itself this morning, but the direction (up) wasn't the one I anticipated. The Yen spiked up this morning, and I don't think it was a "false breakout" given the size of the move. Goldman asserts that the Yen (as of last week) is overvalued relative to the dollar (on a PPP basis) by two standard deviations. As rffrydr likes to say, I like shorting against two standard deviations, but three standard deviations I am not. What this means is that there may be structural factors involved; as opposed to cyclical ones (good example is the rise of crude oil prices starting in 2004). My guess is that the market would push the Bank of Japan to intervene, and before this is over, I would not be surprised if the Yen makes an all-time high against the USD. Thank God I did not short the Yen (and I wasn't going to short until Thursday anyway, since Friday is a big news day for both Japan and the U.S.).
http://futuresource.quote.com/charts/charts.jsp?s=QJY%20U0
http://www.chartpatterns.com/symmetricaltriangles.htm |
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rffrydr
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HenryTo
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| Posted: Sun Jul 11, 2010 5:44 pm Post subject: |
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As it should be - the Democratic Party of Japan handed a defeat in the Upper House as it proposed a sales tax hike from 5% to 10% in response to a ballooning deficit. Spending cuts would need to be implemented first.
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Japan ruling party handed big defeat over tax plan
Japan's ruling party hammered in elections, handicapping its ability to revive economy
TOKYO (AP) -- Japanese voters handed a stinging electoral defeat to the ruling party Sunday, exit polls showed, rejecting a proposal to increase taxes and handicapping a fledgling government struggling to keep the world's second-largest economy from financial meltdown.
With public spending at more than double its GDP, Japan is trying to manage its ballooning debt while also addressing high unemployment and stagnant growth. Prime Minister Naoto Kan has warned the country could face a Greek-style meltdown if it does not get its finances in order -- possibly by raising the sales tax.
But projected losses in elections for the upper house of parliament indicate voters have rejected his solution, and will make it difficult for his government to effectively revive the economy.
The progressive Democratic Party of Japan was on it was to losing its slim majority -- a stark contrast to the landslide victory it scored last August that ended a pro-Washington, conservative party's nearly 50-year grip on power.
Official results were not expected until Monday, but exit polls conducted by Japan's public broadcaster and all major TV networks projected the Democrats would end up with 106 to 110 seats in the 242-member chamber.
The election won't directly affect the Democrats' grip on power because they control the more powerful lower house of parliament. But it does raise the serious prospect of gridlock.
"It's bad news for Kan and the party, and its really bad news for the nation because it means there isn't going to be resolute action on all the festering problems facing the government," said Jeff Kingston, director of Asian studies at Temple University in Japan. "And that's got global repercussions."
Japan is deeply invested in worldwide markets, and slow growth here can have a significant impact on the global economy. Kan said his experience as finance minister made him keenly aware of the need to keep Japan's economic engine running, and not seek short-term fixes.
But, in acknowledging the defeat, Kan said he failed to fully explain his proposal to raise the sales tax from 5 percent to as much as 10 percent. Still, he vowed to press on with economic reforms even if they are not easy to stomach.
"I sincerely and humbly accept this result," he said, adding: "I will continue to push for responsible government."
As the results came in, Kan said that his stance was seen as "sudden" by voters. But he said Japan needs to avoid a situation -- like the one seen in Greece -- in which public spending becomes unsustainable and leads to painful cuts in pensions and government salaries and benefits.
Many economists have slammed his analogy with Greece as alarmist -- primarily because most of Japan's government bonds are held domestically, meaning investors are less likely to bolt -- and analysts said voters recoiled from the idea of paying more taxes.
"I don't think Japan is in a position like Greece, but things aren't good, either," said Kingston. "I don't think markets are going to react well to this. We are going to go through another period of a rudderless Japan. Japan's leadership crisis is not over."
Japan has had six prime ministers in four years. Kan only took power a month ago after former Prime Minister Yukio Hatoyama quit in the wake of a funding scandal and his failure to keep a campaign promise to move a U.S. Marine base off the southern island of Okinawa.
Now he will have to seek a coalition partner to avoid parliamentary gridlock. But the Democrats will face an emboldened opposition led by the Liberal Democratic Party, which governed the country for most of the post World War II period.
"It will be increasingly difficult for Kan to exercise leadership," said Tsuneo Watanabe, an analyst with the private Tokyo Foundation think tank. "I think it is inevitable that this will weaken him."
The results did not appear to pose an immediate threat to Kan's job, however, and the prime minister said he does not intend to carry out a major shake-up of the Cabinet, though he must defend his post in party polls in September.
Even so, the defeat was a sharp rebuke.
Kan took office with support ratings of over 60 percent. But that plunged after he proposed the tax hike. As the elections neared, Kan backtracked and promised there would be no tax increase until after the next lower house elections, which must be held within three years.
But, in an economy struggling with high joblessness and stagnant growth outside of the major cities, the damage was already done.
"People had very high hopes of the Democrats, and they feel betrayed," said Tomoaki Iwai, a political science professor at Nihon University in Tokyo. "This is a vote against the ruling party, not a vote for the opposition." |
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HenryTo
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HenryTo
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| Posted: Tue Jul 06, 2010 8:03 am Post subject: |
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GaveKal on the Japanese Yen:
| Quote: | As our more faithful readers know, we did not expect the ￥90/US$ 'line in the sand' to be breached so easily. Yet, as we write, on a trade-weighted basis, the JPY seems set to match its 1995 all-time highs. Thus, the Yen not only suffers from dreadful demographics and a crippling debt burden but is also rapidly becoming one of the world's most overvalued currencies. So why is the Yen rising relentlessly in the face of poor fundamentals and unattractive valuations?
Behind the recent unforeseen strength, one finds the narrowing in the interest rate gap between Japanese two-year bond yields and US and German bond yields. Indeed, in recent years, the two-year bond yield differential has done more to explain the movements in the Yen than anything else, which is why the Yen is viewed by so many as a proxy for the market's appetite for risk. Yet meanwhile, it is probably the two-year US bond yield which is a sounder indicator of the market's animal spirits. Which brings us back to the Yen and potential reasons for immediate weakness (aside from the longer-term, well known, stories of demographic decline, social paralysis, bank bottom-feeding on JGBs, etc.).
* Catalyst #1: Stronger US macro data helps, in the coming weeks, push the two-year government bond spreads back to levels detrimental to the Yen. At the same time, the weakening Yen and better macro data encourage Japanese institutions and high net-worth investors to once again export capital, dragging the Yen lower.
* Catalyst #2: The BoJ decides that the holiday it embarked on in 2004 (since then, the monetary base has never grown by more than +10% YoY and the BoJ has steadily refused to intervene in the FX markets) might no longer be appropriate. After all, should the growth rate of the monetary base stand today at the same level as that of 2004?
Failing either one of these events, it is hard to see how Japan will avoid an export-led slowdown, even if a growing number of Japanese companies have delocalized production to the rest of Asia, Europe and the Americas. In other words, we are back to the uncomfortable situation we have experienced all too often in our careers, whereby our bearishness on the Yen rests on the premise that either the BoJ will do the right thing (and we have lost much money over the years betting on that) and/or that America will somehow manage to pull a rabbit out of its hat-something we definitely would never bet against!). Still, at current FX valuations, it is hard to avoid the conclusion that Korean, Taiwanese and German exporters must be rubbing their hands with glee. In fact, if one is tempted to deploy capital into the cyclicals following the recent pullback (we are not!), one would likely do worse than just loading up on Japan's competitors. |
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rffrydr
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| Posted: Mon Jun 14, 2010 6:56 am Post subject: |
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QUESTION OF THE WEEK:
I used to think so. Read below for thoughts on a generational-skipping pause based on the accomplishments of a "greatest generation" before. Japan rests after taking Rockefeller Plaza. Now it turns inward, to robots; and outward, to the moon. I've long felt the prospect of a resurgent japan would be expressed first, strangely, militarily. I don't know if this is even possible after being so resolutely beaten. But old enemies rise up.
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HenryTo
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| Posted: Thu Jun 03, 2010 12:53 am Post subject: |
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Goldman on PM Hatoyama's resignation:
| Quote: | | The Japanese Prime Minister Hatoyama resigned earlier today in the face of falling approval ratings since coming into office late last summer. The move can been seen as an attempt to revive the DPJ’s flagging support before the upper house election slated fro early July. Potential successors include Finance Minister Kan and National Strategy Minister Sengoku. Both are likely to tackle Japanese fiscal issues more firmly than their predecessor. The Yen sold off a touch on the news given that Hatoyama started his career as PM with rather Yen bullish comments. Kan, on the other hand expressed a desire to see a weaker Yen when he became Finance Minister in January. More concrete fiscal consolidation would assuage fears of weakness in the JGB market. |
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rffrydr
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rffrydr
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| Posted: Wed May 26, 2010 7:33 am Post subject: |
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Google Trends shows "BRICs" reference greatest in japanese:
http://www.google.com/trends?q=BRICs
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rffrydr
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rffrydr
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| Posted: Thu May 13, 2010 4:22 pm Post subject: |
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It makes PS3, bond phones, premium flat-panels yet the conglomerate can barely get out of its own shadow. Sony deserves better than this:
Sony
Published: May 13 2010 09:32 | Last updated: May 13 2010 11:22
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Remember floppy disks? Those quaint 3.5-inch devices were once the state-of-the-art way to transfer files from one PC to another. CDs, e-mail and USB flash drives gradually made them obsolete; Dell stopped fitting machines with floppy-sized drives seven years ago. But Sony is still producing disks capable of storing a whopping 1.4 megabytes of data. They’ll be discontinued next year, the electronics group says, bringing 20 years of production to a close.
Competitors stopped pandering to sentiment long ago; Sony had 70 per cent of the (tiny) Japanese floppies market last year. Yet a reluctance to let go of ancient technologies is a symptom of the group’s inveterate value destruction. Sony’s return on invested capital, averaging about 2 per cent over the past decade, has rarely got anywhere near the weighted average cost of that capital, currently about 12 per cent. Ten-year average ROIC at Samsung Electronics, in contrast, is 17, in line with its current WACC, on Bloomberg estimates. |
Yeah, it was the apple of its age but how much is just the YEN? e.g. Japan.
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rffrydr
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| Posted: Mon May 10, 2010 10:32 am Post subject: |
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I thought greece may be the last trash...but something's not moving on the other side of the world. No movement here is good movement. If you believe in the world economy, swallow hard and step up to the plate:
Shinsei Bank
Published: May 10 2010 14:29 | Last updated: May 10 2010 15:29
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Shinsei seems to have lost the capacity to shock. Confirmation of a scrapped dividend and a second straight full-year loss for the Tokyo-based bank – at Y140bn ($1.5bn), virtually unchanged from the year before – failed to do anything to the shares on Monday. This Friday, at the official presentation, Shinsei will probably confirm that merger talks with local rival Aozora are off. If so, investors may stifle another yawn: the failure of efforts to create Japan’s seventh-largest bank by assets is the worst kept secret in Tokyo.
This was a combination pushed by the regulator early last year during a period of maximum upheaval. When the panic subsided, so did the urgency of fusing liquidity-deficient Aozora with capital-deficient Shinsei. The banks’ shareholder registers looked similar, dominated by foreign private equity firms and the Japanese government, as did their predilection for ruinous overseas forays – the pair had a full house of exposures to Lehman, GMAC, Madoff and Hypo Real Estate. Aside from that, the match was imperfect. Aozora is focused on business alliances with regional banks to lend to small and medium-sized companies, while Shinsei, laden with consumer finance and property assets, wants to focus anew on “responsible” lending within Japan. The only people ever likely to confuse them are fat-fingered traders; their stock codes are one digit apart. |
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