According to Al Jazeera News, Japan’s central bank has taken its boldest action yet to lift the country’s struggling economy.
The Bank of Japan on Tuesday doubled its inflation target and took on an open-ended commitment to buy assets.
Prime Minister Shinzo Abe’s government has been pushing for a plan to kick-start Japan‘s economy, which is the third largest in the world.
He is hoping to spur growth in his second term in office, through heavy government spending on public works and other projects.
Jeff Kingston, the director of Asian Studies at Temple University in Tokyo, told Al Jazeera that this time around, Abe was focusing on the economy.
“Everyone is worried about his ideological objectives, but it looks like he is putting that aside and focusing on the economy,” Kingston said.
The Bank of Japan adopted the two percent inflation target demanded by the country’s new government.
“The bank sets the ‘price stability target’ at two percent in terms of the year-on-year rate of change in the consumer price index,” the bank said in a statement.
“The Bank will pursue aggressive monetary easing … through a virtually zero interest rate policy and purchases of financial assets,” it added.
Posted by cbasdeo09 on January 29, 2013
According to Business Standard’s, Indivjal Dhasmana, Finance Minister P Chidambaram has described the current account deficit (CAD) and fiscal deficit ( FD) as the two main problems faced by India, even as he wooed European investors to have a confidence in the India growth story.
At Frankfurt yesterday, Chidambaram, however, asserted that under no circumstances he would allow the Centre’s fiscal deficit to breach the revised His assurance on fiscal deficit front came a day before the RBI today cautioned against rising gap between the government’s expenditure and receipts.
The centre bank said large fiscal deficits will accentuate the CAD risk, further crowd out private investment and stunt growth impulses.target of 5.3% of GDP for the current financial year.
The Centre’s fiscal deficit was projected at 5.1% of GDP for 2012-13, but it was revised mid-way to 5.3%. Till November, fiscal deficit covered 80% of budget estimates and 77% of revised target, assuming 14% growth in nominal GDP as was projected in the Budget.
CAD widened to a record 5.4% of GDP in the second quarter of the current financial year, forcing a marginal draw down from the forex reserves.
Posted by cbasdeo09 on January 29, 2013
According to Bloomberg’s Sharon Chen and Novrida Manurung, Indonesian President Susilo Bambang Yudhoyono is under growing pressure to raise fuel prices and curb oil imports as currency risks persist and the window to act narrows ahead of elections in 2014.
The government will probably need to increase subsidized- fuel prices this year, according to economists at Bank of America Corp., Australia & New Zealand Banking Group Ltd., Standard Chartered Plc, PT Bank Danamon Indonesia and Moody’s Analytics. The country limited the use of partially government- funded diesel last week and the trade minister said Yudhoyono will evaluate energy charges in the next few weeks.
The president has avoided raising fuel prices since protests derailed an increase early last year, highlighting the political minefields in a country where riots spurred by soaring living costs helped oust the dictator Suharto in 1998. Subsidies that keep charges below international market rates have bolstered demand for energy imports in the world’s fourth most- populous nation, contributing to a widening current-account gap and a 5.9 percent drop in the rupiah last year.
“This is a dilemma for the president,” said Fauzi Ichsan, a Jakarta-based senior economist at Standard Chartered and a former Finance Ministry analyst. “If the president raises fuel prices, it won’t be good politically, yet without an increase, the current-account deficit will remain high and the rupiah will continue to decline, adding imported inflation.”
Posted by cbasdeo09 on January 29, 2013
“What have you done to me lately?”
For banks around the world, the answer to that question seems to be the determining factor in whether banks are largely trusted. In countries whose financial systems did not blow up during the worldwide recession, trust has remained high. But in some European countries where the banks were generally viewed as having caused the crisis, trust plunged and has not recovered.
Online surveys of “informed publics” in 26 countries were conducted by people hired by Edelman, a public relations firm. Respondents were asked how much they trusted banks “to do the right thing,” on a scale of one – “do not trust them at all” – to nine – “trust them a great deal.” In the 2013 survey, conducted in October and November and released this week at the World Economic Forum in Davos, Switzerland, more than two-thirds of the respondents in seven areas – all but one of them in Asia – thought the banks were worthy of trust. They were Indonesia, India, Malaysia, China, Hong Kong, Singapore and Mexico.
At the other end of the spectrum, fewer than a third of the respondents in six countries – all in Europe – thought bankers could be trusted. They were Ireland, Spain, Germany, Britain, the Netherlands and Italy.
Posted by cbasdeo09 on January 28, 2013
According to Bloomberg’s V. Ramakrishnan & Jeanette Rodrigues, India took a step to spur capital inflows and avert a debt-rating downgrade by raising a limit on foreign investment in rupee bonds by $10 billion to $75 billion.
The nation boosted the cap on holdings of government debt yesterday to $25 billion from $20 billion while an ownership ceiling for corporate notes was increased to $50 billion from $45 billion, according to a statement on the Reserve Bank of India’s website. The rupee erased a 0.4 percent loss after the announcement. Bonds were little changed.
Prime Minister Manmohan Singh has boosted efforts to revive Asia’s third-largest economy since mid-September, cutting fuel subsidies and opening up more industries to overseas investment, after Standard & Poor’s and Fitch Ratings warned the nation’s investment-grade rating is at risk. The move to spur debt inflows comes after the rupee slid 3.9 percent last quarter as the current-account deficit widened to $22.4 billion.“This will help increase inflows to India
in the short-and medium-term, especially as sentiment towards the economy has been improving,” said Siddharth Mathur, strategist at UBS AG in Singapore. “But this is just a single measure that may help at the margin. It isn’t a silver bullet. I wouldn’t overplay its significance as India
’s structural current-account deficit needs structural solutions.”
Posted by cbasdeo09 on January 24, 2013
According to Bloomberg’s News Anuchit Nguyen and Victoria Stilwell, Emerging-market stocks dropped, led by industrial companies, as the International Monetary Fund cut its global growth forecasts and a leading index for China’s economy rose at a slower pace in December.
LG Household & Health Care Ltd. (051900), a South Korean maker of cleaning and personal care products, tumbled the most since 2008 after its profit forecast missed estimates. Hindustan Unilever Ltd. (HUVR) plunged in Mumbai after Credit Suisse Group AG, CLSA Asia- Pacific Markets and Nomura Holdings Inc. cut their recommendations. China Merchants Holdings International Co. (144) sank the most in 11 weeks in Hong Kong. Brazilian paper maker Klabin SA (KLBN4) surged toward a record high.
The MSCI Emerging Markets Index of developing-nation stocks retreated 0.2 percent to 1,076.51 by 1:08 p.m. in New York, while its 100-day volatility dropped to the lowest level since October 2005. The world’s economy will expand 3.5 percent this year, less than the 3.6 percent forecast in October, the IMF said today as it also reduced outlooks for Brazil and India. A gauge for China’s economy gained 0.4 percent in December, compared with a 1.1 percent increase in the previous month.
Posted by cbasdeo09 on January 23, 2013
According to The Wall Street Journal’s Sudeep Jain, MUMBAI–India‘s banks are facing a deterioration in their asset quality and higher liquidity pressures, but the risks to the stability of the financial system appear manageable, the International Monetary Fund said.
“The combination of a sharp credit expansion and a more recent economic slowdown is putting pressure on banks’ asset quality, especially for infrastructure and priority-sector lending,” the IMF said Tuesday in its Financial System Stability Assessment Update on India.
Indian banks expanded loans at a rapid pace before the financial crisis of 2008-09, when the economy was growing at close to double-digit rates. While the economy bounced back after the crisis, growth has once again slowed in recent quarters to its lowest in nearly a decade. This has affected customers’ ability to repay loans.
Priority-sector lending refers to the central bank’s rules requiring banks to apportion a certain percentage of their loans to sectors of the economy which, without regulation, may not get adequate access to funds. These include small-value loans to farmers, micro and small enterprises as well as for housing for the poor and for education
Posted by cbasdeo09 on January 23, 2013
For so long a thorn in the side of China’s trade partners, the yuan now appears to be not only China‘s currency but China’s problem too.
Driven by fears of a bumpy economic landing, the yuan is now clearly in a two-way market, being roughly flat over the past year against the dollar and with forward delivery markets discounting a loss in the coming 12 months. This has radically changed psychology about the yuan, both in China and abroad, and has greatly complicated the job of the People’s Bank of China of mitigating the impact of the global softening in economic growth.
For years, starting in 2005, the yuan was one of the surest things in financial markets, marching seemingly ever upwards against the dollar after China allowed it to begin appreciating after keeping it artificially cheap. That rise was driven by fundamentals — strong growth in exports and foreign direct investment, as well as by the psychology that always attends hot assets.
As reported by Reuters, that has clearly changed, and the change, once struck, poses problems for easing the impact on China of its slowdown. It may also, if it lasts, fundamentally recast global financial market patterns.
Posted by gngn0 on August 30, 2012
Latest Treasury InternationalCapital report suggests that China has the net buying of US Treasury securities in June 2012, albeit only marginally, with holding increased by about US$300 million. China remains the largest holder of US Treasury securities, and Japan continued to come second.
In the chart below, we show the US Treasury securities holding of China and Japan as per TIC report among with the size of China’ FX reserve as reported by the People’s Bank of China. Obviously they are on different scale. The pace of FX reserve accumulation by China has already slowed, especially since last year, partly due to the FX effect of the Euro’s weakness as well asselling of FX assets due to capital outflow.
Posted by byu2012 on August 15, 2012
Indian Overseas Bank is marketing the first dollar-denominated bonds from the Asia-Pacific region in a week after yields on Indian debt in the U.S. currency tumbled to a 12-month low. Bond risk rose in Asia.
Indian Overseas Bank is offering 5 1/2-year notes yielding about 430 basis points more than similar-maturity Treasuries, according to a person familiar with the matter who asked not to be identified because the details are private. Yields on dollar debt from Indian borrowers dropped to 5.6 percent on Aug. 10, the least since Aug. 19 last year, according to a JPMorgan Chase & Co. index.
Dollar bond sales last week dipped to the least since the five days ending July 6, with no sales after China Petrochemical Corp., Sound Global Ltd. and Westpac Banking Corp. raised $1.9 billion on Aug. 6, according to data compiled by Bloomberg. Issuance in Asia is expected to remain patchy this week as August is traditionally a quieter month with some investors on holidays, according to Jefferies Group Inc.
“Dollar bond sales will probably be sporadic this week,” said Brayan Lai, a Singapore-based desk analyst in emerging market credit trading at Jefferies. “There’s a large pipeline from Indian banks but public demand is low as there’s concern about their future growth.”
Posted by stekunan on August 13, 2012