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Your forexlive.com ENewsletter

Sunday, January 6, 2013

Your forexlive.com ENewsletter

Link to ForexLive

Press report: Toyota not to build any new factories for 3 years

Posted: 06 Jan 2013 02:00 AM PST

  • JAPAN’S Toyota Motor has decided to halt the construction of new factories for the next three years in a shift from its previous policy of building new plants almost annually, reports say.
  • The company would officially announce the decision in a new management plan to be released in coming months

Toyota To Suspend New Plant Building For 3 Yrs

Abe’s new government have a huge task ahead of them to rebuild the Japanese economy …

India, Pakistan exchange fire on border – Pakistani soldier killed

Posted: 06 Jan 2013 01:54 AM PST

A Pakistani soldier was killed and another injured in a gunfight between Indian and Pakistani troops in Kashmir on Sunday

Reuters article: India army kills Pakistan soldier in Kashmir

Bloomberg article: Merkel Shifts Focus to Economy From Debt as State Election Nears

Posted: 05 Jan 2013 05:52 PM PST

  • Comments at a party meeting
  • “High-quality jobs with fair pay will be the priority”

The speech is the first of seven by Merkel in Lower Saxony which holds state elections on Jan. 20. In a 12-page declaration agreed to at the talks, Merkel's CDU makes scant reference to the debt crisis other than pledging sound budgets and vowing to keep Germany out of any debt union with its euro bloc partners that might entail joint bonds or pooled debt.

Article

North Korea: Kim Jong Un looking for German advice on how to attract international investment

Posted: 05 Jan 2013 05:47 PM PST

  • The secretive Communist dictatorship of North Korea is planning to open up its economy for foreign investment this year – with the help of German business experts and lawyers, according to a report in the Frankfurter Allgemeine Zeitung.
  • The report says a team of German lawyers and economic experts are involved in concrete plans to alter North Korean law to welcome investors into the country

 

 

 

 

 

North Korea seeks German economic advice

 

Federal Reserve Vice Chairman Janet Yellen: “Communications play a big role” in monetary policy

Posted: 05 Jan 2013 05:37 PM PST

Bloomberg report.

Its pretty light on details…

Fed communication of its policy aims plays a "big role" in supporting the economy now that the central bank's benchmark interest rate is close to zero … Yellen said on a panel today at the American Economic Association's annual meeting in San Diego.

 

 

Japan Defence Ministry to request ¥100 Billion extra in Budget

Posted: 05 Jan 2013 04:15 PM PST

  • Defence Ministry to request an increase its budget for fiscal 2013 by more than ¥100 Billion
  • First increase to the defence budget in 11 years
  • Plans to increase the number of personnel in fiscal 2013

 Defense Ministry wants 100 billion yen more to bolster defenses

Japanese Minister in charge of economic revival, Akira Amari: Supplementary budget to be circa ¥10 Trillion

Posted: 05 Jan 2013 04:01 PM PST

  • The supplementary budget for fiscal 2012 will total around ¥10 Trillion
  • The extra budget is to support economic measures to help overcome deflation, also to help in the reconstruction of disaster-damaged areas, and for disaster prevention.

Think Tank: Japan economic growth expected to pick up in fiscal 2013

Posted: 05 Jan 2013 03:52 PM PST

The Mizuho Research Institute:

  • growth of 1.2% expected in fiscal 2013 (Note: Japan’s fiscal year starts on April 01)
  • An expected increase in exports to China

 

Japan Weekend Press: Government could launch public-private fund as part of 2012 supplementary budget, aimed at encouraging investment in real estate,

Posted: 05 Jan 2013 03:44 PM PST

From an unnamed source is a report by a Japanese news service that a ¥100 billion fund may be launched  aimed at encouraging investment in residential and commercial real estate. Its to be a public-private fund and to be launched as part of the supplementary budget planned for the current fiscal year (which ends on March 31).

  • new fund is expected to invest in projects to construct new office buildings, commercial facilities and condominiums, as well as to refurbish existing structures.
  • Many of the properties to be built or repaired through the fund will be sold to real estate investment firms, which will then pay dividends to stakeholders and repay the loans.

Public-private real estate fund in works: sources

 

AEP: “Japan plans ‘nationalisation’ of factories to save industry”

Posted: 05 Jan 2013 01:14 PM PST

This news was highlighted on ForexLive here: "LDP may use taxes to prop up" private companies

There’s an article in the Telegraph from Ambrose Evans–Pritchard discussing this, and more:

Premier Shenzo Abe is to spend up to one trillion yen (£7.1bn) buying plant in the electronics, equipment, and carbon fibre industries to force the pace of investment, according to Nikkei news.

Link to article: Japan’s government is to take the unprecedented step of buying factories and machinery directly with taxpayer funds, the latest in a series of radical steps to lift the country out of its deep slump.

“This is shaping up as a year in which Japan moves to center-stage in the international arena.”

Posted: 05 Jan 2013 01:03 PM PST

Tim Duy has continued his discussion of Japan in his blog; with some interesting observations on Abe’s policies for those trading the Yen. Its a brief blog post, well worth reading; some points:

  • Duy quotes Ambrose Evans-Pritchard: “He has set an implicit exchange range target of 90 yen to the dollar, instructing the Bank of Japan to drive down the yen with mass purchases of foreign bonds”
  • As I have said in the past, I think that a yen/dollar target of 90 will yield only minor economic benefits at the price undermining Japan’s international relationships.  The US and Europe will reply that their quantitative easing programs are primarily aimed at boosting domestic demand, whereas if Japan appears to be pursuing an obvious beggar-thy-neighbor strategy.  Of course, Abe isn’t too worried about offending the international community.

The Japan Story Continues to Evolve

 

Japan Weekend Press: Japan Finance Minister Aso – “No limit on bonds”

Posted: 05 Jan 2013 12:49 PM PST

Japan’s Finance Minister Aso on Friday:

  • The government will not stick to the annual ¥44 trillion debt cap set under the former government of the DLP
  • There will be no limit on the amount of of new bond issuance to fund the extra budget for fiscal 2012 … “I do not have any intention to cap the amount”
  • Size of the supplementary budget … will “definitely be on the large side.”
  • Didn’t rule out appointing a former Finance Ministry official as the next governor of the BOJ

From this article (down the bottom of the page): Abe prods BOJ over proposed 2% inflation goal

Japan Weekend Press: Abe Prods BOJ over proposed 2% inflation goal

Posted: 05 Jan 2013 12:40 PM PST

Abe’s pressure on the BOJ isn’t letting up; in his first press conference of the year:

  • “As the BOJ’s monetary policy is vitally important to an economic rebound, I hope it will implement a 2 percent inflation goal in a responsible manner,”
  • Abe also said his new Liberal Democratic Party administration is determined to “rocket-start” the flagging economy by crafting a large supplementary budget for the current fiscal year and by revising the annual budget for fiscal 2013

Abe prods BOJ over proposed 2% inflation goal

Something about the story seems odd

Posted: 05 Jan 2013 07:41 AM PST

This was in the press Thursday evening/Friday morning and helped partially fuel the dip just below 1.3000.

The crux of the story is that Spain’s social security fund is being used to raise cash to pay the governments debts. In return, it is getting Spanish government bonds. Shock and horror ensued.

But doesn’t every countries social security fund invests in the bonds of its government?

Hell, the US Social Security Trust Fund consists solely of $6 trln in Treasuries.

Sounds to me like Spain is just playing the game the same way everyone else is…

The only American more popular than Jerry Lewis in France may cop a plea

Posted: 05 Jan 2013 07:10 AM PST

Lance Armstrong may finally come clean in order to resume his athletic career.

He’s 41. What sort of athletic career does he have left? Sounds like he is trying to salvage a few endorsement deals. Good luck with that…

Former Fed bond buyer hits the road

Posted: 05 Jan 2013 07:05 AM PST

Brian Sack, the former head of the NY Fed’s Market Group, those charged with buying the trillions of dollars worth of US Treasuries and mortgage securities is finally leaving the Fed. He announced in the middle of last year that he was leaving but mysteriously stayed put. Looks like that juicy hedge fund or investment bank offer finally came along…


at 6:06 PM

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