Category: News

The Current State of the Japanese Yen

According to Bank of America Securities’ recent survey, there’s a likelihood of further weakness in the Japanese yen. This sentiment contrasts with the consistently bullish yen bias observed since mid-2022. Despite Japanese authorities spending nearly $60 billion to bolster the yen, it has returned to trading at ¥155.83 against the dollar. Investors, reacting to USDJPY breaching new highs in April, have shifted to the largest JPY short position since 2022, displaying skepticism about Japan’s FX intervention effectiveness. Most fund managers expect USDJPY to retest ¥160, indicating a lack of anticipation for a reversal to ¥150. However, the sudden shift in sentiment towards JPY suggests caution for short positions in the near term, according to the bank.   Published on 17/05/2024 By Michael S.

Israel Response to Iran has raised, fears that conflict in the Middle East will escalate.

The recent confrontation between Israel and Iran has had a significant impact on global financial markets and investments. Stock markets in Tokyo, Seoul, and Taipei dropped by more than 3%. Hong Kong and Sydney saw declines of over 1%, while Shanghai, Singapore, Wellington, and Jakarta also entered negative territory. The yen strengthened against the dollar, gold prices rose by over 1%, and WTI and Brent oil prices surged by more than 3% due to concerns over Middle Eastern oil supplies. Investors and international financial markets need to closely monitor and be cautious about the developments in this region.

Gold surged to an all-time high

Gold surged to an all-time high as the second quarter began, continuing its upward trajectory fueled by the Federal Reserve’s indication of potential rate cuts and escalating geopolitical conflicts. The price of bullion soared to a peak of US$2,260 per ounce on Monday morning, marking a 1.3% increase from Thursday’s closing price, following a series of record highs in recent trading sessions.

Japanese government bond yields increased

Japanese government bond yields increased on reports suggesting the Bank of Japan (BOJ) might exit negative interest rates. The benchmark 10-year JGB yield reached a one-month high at 0.760%. BOJ policymakers are reportedly considering ending negative rates and revising stimulus programs. The BOJ might replace its bond yield control (YCC) with a new quantitative framework. Big Japanese companies are expected to offer significant pay hikes, influencing the timing of BOJ’s exit. Japan’s economy avoided a technical recession, supporting an earlier exit. Market expectations for ending negative rates in March increased after BOJ officials’ comments on inflation targets. The 20-year and 30-year JGB yields also rose to one-month highs

Singapore labor market slows down

The Singapore labor market is showing signs of slowing down. Total employment grew at a slower rate, and job vacancies dipped for the fourth straight quarter, according to the Ministry of Manpower labor market report for the first quarter of 2023. Retrenchments rose to 3,820, the highest in nine months, with sectors such as electronics manufacturing and financial services being the hardest hit. 70 percent of retrenched Singapore citizens and permanent residents managed to find a new job within six months. The city-state’s job market is likely to toughen further owing to economic uncertainty and global headwinds.

Debt Ceiling Crisis: Navigating the Brink of Default

Debt limit optimism and decent data are nibbling away at the pricing of Fed rate cuts and dollar shorts are feeling the squeeze. It’s “just a correction” but it’s painful all the same. Joe Biden, the US President, called the bipartisan offer from House Speaker Joseph McCarthy “unacceptable.” The risk that the US government fails to make its debt payments by June 1 grows The first real US government bond payment default risk falls on June 6th. Without a debt ceiling resolution, the US government could place the global financial system in ‘shock’ as soon as June 6th. If not before.

Biden and Republicans are hopeful of a deal. The US debt ceiling is in focus.

President Joe Biden and Republican leaders have expressed cautious optimism that a deal to raise the US debt ceiling is within reach, following emergency talks at the White House. Without a deal, the US could enter a calamitous default on its $31.4tr (£25tr) debt as soon as 1 June. A failure by the US government to meet its debt obligations could trigger global financial chaos. The Democratic president said Tuesday’s hour-long Oval Office meeting was “good, productive”, sounding upbeat about the prospects of an agreement. Mr. McCarthy said afterward he believed a deal was possible by the end of this week. In exchange for support for raising the debt ceiling, Republican leaders are demanding budget cuts. They also want tougher work requirements for government aid recipients. Published on 24/05/2023 By Michael S.  

Another 0.25% increase in interest rate from FED

          Since the inflation has eased yet remains rising, additionally, Russia’s war in Ukraine isn’t impacted much but causing the global uncertainty mentioned by FED.  In its Feb. 1 policy decision, the Fed raised the target range for benchmark interest rates by another 0.25%, setting the range at 4.5%-4.75%, the highest since 2007.         With unanimous voting in favor of the rate increase, FED policymakers mentioned in a policy statement that “ongoing increases” in interest rates will likely be appropriate to obtain a monetary policy stance that is “sufficiently restrictive” — in effect countering the recent easing in financial conditions that has resulted from higher stock prices and a moderation in rates for Treasuries and other bonds.         Meanwhile, Thailand’s finance minister, Arkhom Termpittayapaisith, mentioned that Thailand’s interest rate has been reasonably adjusted, and raising too much will sharply drag down the economy which is getting better. Even the private sector said the baht was too strong, “but it’s not very strong,” and “The baht is strengthening on the fundamentals

Russian oil production was announced 5% to be cut

          Since Russia was threatened to be boycotted by the western, Russia plans to cut its oil production output by 500,000 barrels a day in March. This movement caused sharp increasing oil prices.         Regarding the Russian announcement, Oil Market has been turmoiled causing disruption to the Russian demand. It further tightens supply constraints from OPEC+, which Saudi Arabia had already led into a 2 million barrel-a-day production cut last year in an effort to buoy prices. Delegates from the group signaled they won’t take any action to fill in the gap created by Russia.          Russia’s reduction is equivalent to about 5% of its January output. The Kremlin has repeatedly hinted at such a move since the European Union and the Group of Seven industrialized countries began discussing capping the price of Russian crude and refined product exports amid the war in Ukraine.          “Russia believes that the mechanism of price caps on Russian oil and petroleum products is an intervention in market relations and an

Myanmar’s mobile payment under military control

          On 1 February 2023, A 2-year mark the Myanmar military initiated a deadly coup, ripping the country out of democratic transition. Mobile payments have become more common use in Myanmar after a severe shortage of cash pushed consumers to explore digital alternatives.           Since last year, the regime has frozen the bank accounts and mobile money wallets of people who give financial support to the anti-coup resistance. Subsequently, The military junta maintains command of Myanmar’s banking system to keep a complete record. It has imposed increasingly authoritarian rules on either transferring or receiving mobile payments to keep personal information through its mobile wallet apps.           The military government is supportive of this shift. At a January meeting with electronic payment companies, the Myanmar central bank called for reducing the use of cash and promoting the use of QR codes and payment apps. Currently, Some are now avoiding mobile payments altogether, fearing attention from the authorities. Published 10/02/2023 By Ashley Jones