Surging yen sends Nikkei tumbling 3.5% ahead of BOJ meeting

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian markets ended sharply lower Monday, ahead of central bank meetings in the US and Japan this week and amid jitters over the upcoming referendum on whether the UK would remain in the European Union.

Japan’s Nikkei 225 tumbled 582.18 points, or 3.51 percent, to 16,019.18, as fresh strength in the yen pressured stocks, with major exporters selling off. Shares of Toyota, Nissan, Honda and Sony closed down between 3.54 and 4.18 percent.

The yen strengthened against the greenback ahead of the Bank of Japan’s (BOJ) two-day policy meeting starting June 15. Additionally, the yen is considered a safe-haven currency and increased concerns over the risk of a Brexit may be driving funds into the currency.

The currency pair traded at 105.83 as of 2:17 p.m. HK/SIN, compared with levels around 106.80 on Friday afternoon local time.

“The BOJ … will likely delay a rate cut in the meeting, favoring a coordinated event when the government releases its fiscal stimulus package in Autumn,” said Stephen Innes, a senior foreign exchange trader at OANDA Asia Pacific. “This delay will likely appreciate the yen over the short term if the BOJ remains sidelined.”

Across the Korean Strait, the Kospi closed down 38.57 points, or 1.91 percent, at 1,979.06. In Hong Kong, the Hang Seng index dropped 2.73 percent in the afternoon.

Chinese mainland markets ended lower, with the Shanghai composite closing down 94.65 points, or 3.23 percent, at 2,832.50, and the Shenzhen composite off by 91.26 points, or 4.75 percent, at 1,827.35.

Investor confidence likely took a hit after official data released earlier on Monday showed China’s fixed-asset investment growth eased to 9.6 percent on-year in the January-May period, reported Reuters. Analysts polled by Reuters had expected investment growth of 10.5 percent for the period.

The so-called Brexit was also on the radar for Asian investors.

“We judge that market uncertainty will remain elevated all the way into the Brexit referendum next week, as it is becoming clear that support for both camps are near evenly divided,” said Wei Liang Chang, an FX strategist at Mizuho Bank. “Perceived negativity of a Brexit event should keep risk positioning light, and we expect a continued pare back of risk assets in Asia, to an extent.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

European stocks open lower as US Fed meeting eyed

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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European stocks opened sharply lower on Monday as investors look ahead to crucial central bank decisions from the US and Japan this week.

The pan-European STOXX 600 was down 0.95 percent.

Global markets will be dominated by two crucial central bank meetings and monetary policy decisions this week. On Tuesday, the US Federal Open Market Committee begins a two-day meeting although expectations for a June rate hike have been pared following a lower-than-expected May nonfarm payroll number in recent weeks which cast doubts over the health of the US economy.

Meanwhile in Asia, the Bank of Japan (BOJ) is also scheduled to hold a policy meeting on June 15 with analysts saying that that bank could surprise markets with additional easing this week.

Asian stocks were trading sharply lower Monday morning, ahead of the central bank meetings. Increasing nervousness over whether the U.K. would remain in the European Union (EU) when a referendum on EU membership takes place on June 23 is also rattling markets. A new poll published on Friday showed that the majority of Brits favor leaving the EU.

Oil markets also failed to give stocks a boost on Monday with prices falling in early trade, pulled down by rising economic concerns in Asia, Reuters reported, and a strengthening in the US dollar, which makes dollar-denominated fuel imports more expensive for many countries.

There are no major earnings on Monday.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why the Fed may cut rates this year

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Week ahead:US Fed, Bank of Japan to dominate mkt moves this week

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia markets sell off: Nikkei tumbles 3%, Hang Seng down 2.3%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian markets were sharply lower Monday morning, ahead of central bank meetings in the US and Japan this week and amid jitters over the upcoming referendum on whether the UK would remain in the European Union.

Japan’s Nikkei 225 was down 3.03 percent, as a relatively strong yen pressured stocks. The yen maintained its strength against the greenback ahead of the Bank of Japan’s two-day policy meeting starting June 15. The currency pair traded at 106.18 as of 9:39 a.m. HK/SIN, compared with levels around 106.80 on Friday afternoon local time.

Across the Korean Strait, the Kospi was down 1.56 percent. In Hong Kong, the Hang Seng index dropped 2.3 percent after market open. Chinese mainland markets were also sharply lower, with the Shanghai composite down 1.16 percent and the Shenzhen composite off by 1.52 percent.

Stateside, US futures were lower, with Nasdaq futures down around 18 points and Dow Jones industrial average futures off around 61 points in morning Asia time.

On Sunday night, the US reeled after at least 50 people were killed and more than 50 others were wounded after a gunman opened fire and took hostages at a gay club in Orlando, Florida. It was America’s worst-ever mass shooting and law enforcement officials called it an incident of domestic terrorism.

Elsewhere, early polls have shown a majority of British people are in favor of leaving the European Union, ahead of the June 23 referendum vote. The pound was under pressure, trading at USD 1.4187 as of 9:40 a.m. HK/SIN on Monday, compared with levels between USD 1.4500 and USD 1.4600 in the previous week.

The dollar advanced against a basket of currencies; the dollar index traded at 94.729 as of 9:40 a.m. HK/SIN, compared with levels around 93.565 on Thursday and near 94.181 on Friday afternoon Asia time.

US markets closed lower Friday, with the Dow Jones industrial average down 119.85 points, or 0.67 percent, at 17,865.34. The S&P 500 was off by 19.41 points, or 0.92 percent, at 2,096.07, and the Nasdaq composite lost 64.07 points, or 1.29 percent, at 4,894.55.

The Federal Open Market Committee will begin a two-day policy meeting on June 14, with many market watchers not expecting a rate hike after a sharply lower-than-expected US jobs report cast fresh doubts over the economy’s health.

However, the number of Americans filing for unemployment benefits for the week ended June 4 unexpectedly fell, according to the Labor Department.

Markets in Australia are closed for the Queen’s Birthday public holiday.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Negative interest rates by ECB, BOJ can’t boost growth: Allianz

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Central banks are essentially out of ammunition, with zero and negative interest rate policies spurring greater savings, not growth, said Michael Heise, chief economist at Allianz Group.

Moves by central banks from Japan to the euro zone to slash interest rates below zero have upended financial markets: investors are now paying some governments for the privilege of parking their funds while commercial lenders are mulling storing their cash in costly vaults instead of keeping them with central banks.

Despite the stimulus, economic growth remains feeble.

“Monetary policy has basically run its course in stimulating the economies,” said Heise in an exclusive interview with CNBC in Singapore. “The Japanese example is very telling.”

In late January, the Bank of Japan blindsided global financial markets by adopting negative interest rates for the first time ever – a move that should have spurred outflows of the local currency. But instead, the yen surged and signs of the intended effects, such as increased bank loans, have been scarce.

“The impact of monetary policy is actually counter intuitive and that shows that there’s a lot of uncertainty that policy makers are facing,” Heise said. “They can’t even be sure how their instruments are going to affect the economy.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Apple now has an energy company: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Apple has created a subsidiary energy company, 9to5Mac reported Friday.

Apple Energy LLC is seeking to sell power at wholesale prices, in part from the solar energy and hydroelectric facilities connected to places like the Apple Data Center, according to documents filed with the Federal Energy Regulatory Commission.

The new Apple Energy entity was incorporated in Delaware last month, according to the Delaware Secretary of State’s website.

Apple has already invested heavily in solar power, creating a USD 850-million solar farm last year to power its California operations. Meanwhile, 9to5Mac reports, Apple’s said to be working on an electric car project, including potential charging stations.

Still, the world of energy regulation is complex, as 9to5Mac reports, with limits on what private companies can do. Apple did not immediately respond to CNBC’s request for comment on the regulatory filings.

For the full scoop on what’s next for Apple Energy, read the report from 9to5Mac.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why big investors think it’s time to hoard gold

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow