| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : International Last Updated: Apr 4, 2013 - 3:24 PM


Markets: Bank of Japan makes aggressive move to end deflation
By Finfacts Team
Apr 4, 2013 - 1:33 PM

Email this article
 Printer friendly page
Bank of Japan's headquarters, Tokyo. Photo: Wikimedia Commons

Haruhiko Kuroda, Bank of Japan new governor, confirmed today that the central bank  would meet its inflation target within two years, to end a long period of deflation that coupled with population ageing, has stunted economic growth.

Prime Minister Shinzo Abe had called for a 2% inflation target and a policy board meeting of the bank said it would increase its purchase of government bonds by ¥50tn yen ($520bn) per year. That is the equivalent of almost 10% of Japan's annual gross domestic product.

The bank added that it would buy longer-term government bonds as well as riskier assets.

"The previous approach of incremental easing wasn't enough to pull Japan out of deflation and achieve 2% inflation in two years," Kuroda said. "This time, we took all necessary steps to achieve the target."

As Japan's export sector has slowed down in recent years, reviving domestic demand has become ever more crucial to spurring a fresh wave of economic growth in the country.

Justin Doyle, Investec Bank Ireland, said today:

  • "It’s Central Bank Thursday and first out of the saloon was the Bank of Japan overnight with all guns blazing.
  • Newly appointed BoJ governor Kuroda didn’t disappoint on his inaugural meeting as he announced that they were to increase their asset purchase programme, extend the maturities of those purchases (out to 40 years) and merge existing programmes. Currency and equity markets have responded in kind with the JPY trading 3% lower against the USD from its lows of yesterdays close and the Nikkei index closing nearly 2.5% higher on the day.
  • We have the BoE up next at 12pm followed by the ECB at 12.45. At the BoE a mixed bag of economic evidence has contributed towards a widening of the divisions within the MPC so far this year, with three of the nine members voting to increase the QE target by £25bn in both February and March. Whereas the option of lowering the Bank rate again has largely been shelved, the debate over whether or not to restart asset purchases is currently a live one.
  • Over to the ECB and we don’t expect to see a rate cut today but the recent softening in Eurozone economic data thrown in on top of the Cypriot debacle and Italian stalemate may give Mr. Draghi some food for thought. I would expect to see a cautious, even slightly dovish statement with a lively Q&A session to follow, which I think will weigh on the Euro. I would be surprised to see the EUR close over $1.28 this evening."

IMF continues call for ESM equity injections into Irish banks: Conall Mac Coille, chief economist of Davy, comments  --  "Irish exchequer returns to March have performed in line with Budget 2013 targets. The IMF's ninth review of Ireland's programme continued to call for ESM capital injections into Irish banks and the resolution of non-performing loans. The IMF expects GDP growth of 1.1% in 2013 and 2.2% in 2014, a little below our own forecasts. The services PMI released this morning softened slightly (to 52.3) but still indicates expansion.
IMF continues call for ESM equity injections into Irish banks

Stock markets closed down sharply on Wednesday, erasing most of Tuesday's strong gain. The Euro Stoxx 50 closed down 1.5% and the S&P 500 1.1%. Sentiment was hit by an unexpected sharp fall in the US ADP employment survey, indicating that jobs growth slowed to just 158,000 in March, albeit from an upwardly revised 237,000 in February. The non-manufacturing ISM survey fell from 56 in February to 54.4 in March, still indicating that the US services sector is expanding but below market expectations.

Yesterday, the IMF published its ninth review of Ireland's programme. The IMF expects GDP growth of 1.1% in 2013 and 2.2% in 2014, marginally below our own forecasts. The IMF continued to call for the ESM to take equity stakes in Irish banks to break the link between the sovereign and the financial sector. Not surprisingly, the review is heavily focused on the resolution of banks' non-performing loans, citing inadequate progress thus far. The review also indicated that discussions have begun on precautionary arrangements as Ireland exits the bailout programme.

The March exchequer returns indicated that tax revenues and spending in Q1 have performed broadly in line with the Budget 2013 plans. Total gross spending was 1% ahead of target, but the Department of Finance indicated that this was a timing issue, with underlying spending growth in line with Budget targets. Tax revenues were 0.9% below target in Q1, primarily due to weaker VAT and PRSI receipts. However, these shortfalls were offset by corporation taxes, 60% ahead of target, after an unexpected €140m payment in March. The 2% shortfall in VAT receipts may reflect weaker retail sales, down 1.7% in the three months to February.

However, the Irish services PMI released this morning indicated that the sector continued to expand in Q1 2013. The services PMI was 52.3 in March, down from 53.6 in February. This is the eighth consecutive month above the 50 no-change reading, albeit the lowest since August. The services PMI survey has been a reasonable leading indicator of activity. The sharp pick-up in the services PMI in H2 2012, to a high of 56.1, corresponded to the first annual increase in domestic demand for many years. Both consumer spending and employment posted two consecutive quarters of expansion in H2. So although the services PMI has softened slightly in Q1, it still indicates that the services sector expanded in early 2013."

US markets

In New York Wednesday, the Dow fell 112 points or 0.76% to 14,550.

The S&P 500 slid 1.05% and the Nasdaq slipped 1.11%.

Asia Markets

The MSCI Asia Pacific fell 0.6% in Tokyo Thursday.

The Nikkei 225 jumped 2.22%; China's Shanghai Composite Index declined 0.88%; Korea's Kospi fell 1.20%; Australia's S&P/ASX 200 dropped 0.89% and in Mumbai, the Bombay Stock Exchange's S&P BSE 100 index declined 1.55%.

Europe Markets

In Europe, the Dow Jones Stoxx Europe 600 is down 0.05% in early afternoon trading Thursday.

In Dublin, the ISEQ is down 0.58%.

DCC has fallen 1.98%.

European Benchmarks

Irish Share Prices

Key Index Performance Statistics

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

Currencies

The euro is trading at $1.2807 and at £0.8475.

For live currency updates, check the right-hand column of the Finfacts home page.

The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.

Commodities

The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.

On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.

On Wednesday this week, the BDI fell 19 points or 2.21% to 877 - - the BDI is up 25.46% in 2013

Crude oil for May 2013 delivery is currently trading on the Chicago York Mercantile Exchange (CME/Nymex) at $94.45 up 5 cents from Wednesday's close.. In London, Brent for May delivery is trading on the International Commodities Exchange at $107.24. The North Sea benchmark accounts for two-thirds of the global market.

Bloomberg reports that for the first year since the futures were created, Brent crude is poised to overtake West Texas Intermediate (WTI) oil as the world’s most-traded commodity.

Daily trading in Brent jumped 14% to average 567,000 contracts in the year to November 20 compared with all of 2011, while WTI fell 17% to 575,000, according to data from the ICE Futures Europe exchange in London and New York Mercantile Exchange compiled by Bloomberg. The number of Brent futures changing hands has exceeded those for WTI every month from April through October, the longest streak since at least 1995.

Brent, produced in the North Sea, is gaining favour among traders because of its role as the benchmark for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the past two years, reflecting everything from war in Libya to the embargo on Iran. WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point for Nymex futures.

Gold spot price

The spot price of an oz of gold is trading in New York at $1545.70 down $12.20 from Wednesday's closing in New York.

Gold had hit a record high of $1,921.05 a troy ounce on Sept 06, 2011.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.


© Copyright 2011 by Finfacts.com

Top of Page

International
Latest Headlines
Monday Newspaper Review - Irish Business News and International Stories - - September 01, 2014
Friday Newspaper Review - Irish Business News and International Stories - - August 29, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - August 28, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - August 27, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - August 26, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - August 20, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - August 19, 2014
Monday Newspaper Review - Irish Business News and International Stories - - August 18, 2014
Friday Newspaper Review - Irish Business News and International Stories - - August 15, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - August 14, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - August 13, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - August 12, 2014
Monday Newspaper Review - Irish Business News and International Stories - - August 11, 2014
Friday Newspaper Review - Irish Business News and International Stories - - August 08, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - August 07, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - July 31, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - July 30, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - July 29, 2014
Monday Newspaper Review - Irish Business News and International Stories - - July 28, 2014
Friday Newspaper Review - Irish Business News and International Stories - - July 25, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - July 23, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - July 22, 2014
Monday Newspaper Review - Irish Business News and International Stories - - July 21, 2014
Friday Newspaper Review - Irish Business News and International Stories - - July 18, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - July 17, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - July 16, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - July 15, 2014
Monday Newspaper Review - Irish Business News and International Stories - - July 14, 2014
Friday Newspaper Review - Irish Business News and International Stories - - July 11, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - July 10, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - July 09, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - July 08, 2014
Monday Newspaper Review - Irish Business News and International Stories - - July 07, 2014
Friday Newspaper Review - Irish Business News and International Stories - - July 04, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - July 02, 2014
Markets: BNP Paribas admits crimes in US court; UK manufacturing was robust in June
Tuesday Newspaper Review - Irish Business News and International Stories - - July 01, 2014
Friday Newspaper Review - Irish Business News and International Stories - - June 28, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - June 26, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - June 25, 2014