TOKYO: With BoJ governor Kuroda indicating that more stimulus will not be forthcoming the market has taken a contrarian stance betting that sooner rather than later the BoJ’s hand will be forced into more accommodative monetary policy prior to the implementation of proposed tax increases in 2017.
Exports during April-September 2015 stood at ¥37,759.01 billion, which showed an increase of 5.2 per cent year-on-year, provisional figures released today showed. Renewed fears about the global economy have pushed investors into lower-yielding and less risky currencies, including the U.S. unit, as markets await news of a long-anticipated Federal Reserve interest rate hike.
Gains were capped somewhat ahead of a European Central Bank meeting on Thursday, where ECB President Mario Draghi may drop hints of a potential expansion of quantitative easing to stave off deflation. Nickel lost 0.1 per cent and copper slid 0.4 per cent as the Japan trade data compounded concerns about global demand after China, the world’s biggest commodities consumer, reported on Monday its weakest quarterly growth since the global financial crisis.
The value of exports by Japanese firms to China sank 3.5 percent in September, the finance ministry said, while they were also down to other Asian countries. Exports to Asian countries fell 4.2%, with those to China down 5.7%. Many traders think the bank is edging closer to unleashing more monetary stimulus on top of the 1.1 trillion euros ($1.2 trillion) it is already pumping into the eurozone’s less than impressive economic recovery.
Japan issues opened slightly higher on the yen’s retreat against United States dollars as the yen’s weakening helped boost buying of export-oriented shares. The MSCI Asia Pacific Index added 0.4% by 12:30pm in Tokyo as Japan’s Topix index jumped 1%. Chinese tourists accounted for 47 percent of the spending – an average of about 281,000 yen per person – followed by visitors from Taiwan, Hong Kong and South Korea.
Gold extended gains, rising 0.2% to $1,177.92 an ounce as investors awaited next week’s Fed meeting. Weakness in exports led to a 114.48 billion yen ($955 million) trade deficit for the month against expectations for a large surplus. ENERGY: Benchmark USA crude fell 25 cents to $46.04 a barrel in electronic trading on the New York Mercantile Exchange.
