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Japan Stocks Drop on Stronger Yen as Energy Shares Fall With Oil

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Japanese yen

Japanese stocks fell as the yen strengthened and Iran and Saudi Arabia doused hopes for a rebound in crude prices, sending global energy shares lower.

The Topix index declined 1.1 percent to 1,276.57 as of 9:53 a.m. in Tokyo, as 27 of the measure’s 33 industry groups slid. The Nikkei 225 Stock Average lost 1.2 percent to 15,856.77. Shares in the U.S. tumbled with oil after Saudi Arabia said a recent agreement to freeze output won’t lead to production cuts, while Iran called the deal “ridiculous.”

“Iran and Saudi Arabia are showing little desire to lower production, so despite the agreement by the main countries to freeze output, it’s clear that alone won’t push oil prices back up to $50 or $60 a barrel,” Chihiro Ohta, general manager of investment information at SMBC Nikko Securities Inc. in Tokyo, said by phone. “There are no catalysts to purchase stocks now. We’re not seeing buying ahead of the G20 either.”

Crude fell 4.6 percent in New York on Tuesday. Last week’s proposal to cap output at January levels puts “unrealistic demands” on Iran, the country’s oil minister said Tuesday. Saudi Arabia’s oil minister said the deal won’t cut oil production as other countries would be unlikely to assist in restraining output. Oil futures continued falling, slipping an additional 1.5 percent on Wednesday.

Yen, Oil

The yen gained for a second day, trading at 111.98 per dollar after jumping 0.7 percent on Tuesday. That sent exporters lower, including Toyota Motor Corp. which declined 1.6 percent. Subaru manufacturer Fuji Heavy Industries Ltd. lost 3.4 percent, while TDK Corp., the Apple Inc. supplier that gets more than 90 percent of revenue abroad, fell 4.1 percent.

Shippers led losses in Tokyo on Wednesday, with Mitsui OSK Lines Ltd. falling 3.3 percent. Resource-related shares were also among the biggest losers. Nippon Steel & Sumitomo Metal Corp. dropped 3.3 percent after gaining 4 percent on Tuesday.

Declines among Japan’s energy companies were buffered as several brokerages lifted ratings on some companies. Fuji Oil Co. jumped 1.2 percent after Mitsubishi UFJ Morgan Stanley Securities Co. boosted its outlook on the crude miner and refiner. Chiyoda Corp., which provides services to oil companies, rose 0.1 percent after Credit Suisse Group AG raised its rating on the firm.

Chairman Exit

Honda Motor Co. led car manufacturers lower after shaking up management, including the exit of its chairman. The changes at Japan’s second-largest automaker come amid internal quality woes and an air-bag safety crisis with its top supplier Takata Corp. Shares of Honda fell 3.3 percent.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent after the underlying equity gauge tumbled 1.3 percent on Tuesday, the most since Feb. 8. The recent rally’s strongest performers lost momentum, with banks and tech shares declining. Economic data was mixed, as a report showed previously owned home sales unexpectedly rose in January to the second-highest pace since early 2007, while February’s consumer confidence decreased.

Investors awaited the start of a Group of 20 meeting on Friday in Shanghai. The weakening global-growth outlook was expected to dominate the agenda as officials from the world’s biggest economies gathered.

Bloomberg

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Naira

Daily Naira Exchange Rates; Thursday, May 6, 2021

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Naira Exchange Rates - Investors King

Naira depreciated further at the parallel market on Thursday as the local currency traded at N485 to a United States Dollar. The Nigerian Naira exchanged at N676 to a British Pound and N585 to a Euro as shown below.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
06/05/2021 480/485 665/676 575/585 62/69 395/405 292/320

Bureau De Change Naira Rates

Date

USD

GBP

EURO

NGN

BUY/SELL

BUY/SELL

BUY/SELL

06/05/2021

475/482

663/676

575/587

06/05/2021

475/482

663/676

575/587

Central Bank of Nigeria’s Official Naira Rates

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Forex

CBN Extends N5/$ Incentive Period to Boost Dollar Inflow

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Godwin Emefiele - Investors King

The Central Bank of Nigeria (CBN) has extended the N5 per US Dollar incentive on forex remittance indefinitely to boost liquidity and further deepen economic recovery.

The initiative was scheduled to end on May 8. It was introduced to encourage recipients of dollars to use formal banking channels and help the central bank capture such inflows to boost the stability of the local currency, which has been under pressure after oil prices plunged last year.

“We hereby announce the continuation of the scheme until further notice,” the regulator said in a statement on its website on Thursday.

The naira has been devalued three times since last year after a sharp drop in oil earnings, which accounts for 90% of foreign-exchange inflows, and remittances from workers abroad led to a dollar crunch in the West African nation, which produces the most crude in Africa. The local unit traded for 410.31 on the investors and exporters window, also called Nafex, as of 8:51 a.m. in Lagos.

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US Dollar

Dollar Falls as Risk Appetite Improves, Sterling Dips on BoE

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US Dollar - Investorsking.com

The dollar dropped to its lowest point in three days on Thursday as global market risk appetite improved, while sterling zig-zagged after the Bank of England slowed the pace of its bond-buying, but left interest rates unchanged.

Fewer Americans filed new claims for unemployment benefits last week, data showed, as COVID-19 vaccination efforts and massive amounts of government stimulus led to a further reopening of the economy.

While the U.S. economy has been gaining steam, Federal Reserve speakers on Wednesday downplayed the risks of higher inflation.

Those statements reinforced “the lower-for-longer mentality with regards to interest rates,” making the greenback less appealing, said Neil Jones, head of FX sales at Mizuho.

The safehaven U.S. dollar was last down 0.31% at 91.977 against a basket of peer currencies.

“What we’ve seen early in New York is a little bit of back-and-forth gyrations, just because of the Bank of England meeting,” said Erik Bregar, director and head of FX strategy at the Exchange Bank of Canada.

The Bank of England said it would slow the pace of its bond-buying as it sharply increased its forecast for Britain’s economic growth this year after its coronavirus slump, but it stressed it was not tightening monetary policy.

“They kept their QE target in place but they said they are going to reduce the weekly pace of purchases, but that’s not a signal and so sterling has kind of gone up and down and done nothing at the end of the day,” Bregar said.

The pound was last down 0.08% against the weaker dollar at $1.3900 .

The euro was up 0.47% versus the dollar at $1.2061 , and up 0.65% against the pound, at 86.88 pence per euro.

Investors were also paying attention to elections in Scotland that could herald a political showdown over a new independence referendum.

The Australian dollar fell sharply overnight when China said it would stop its economic dialogue with Australia, but the currency had recovered to trade close to flat on the day as European markets opened.

The Aussie was up 0.1% versus the U.S. dollar at 0.77515 at 1028 GMT, having hit as low of 0.7701 overnight.

The New Zealand dollar also dropped and was down 0.1% on the day.

“The announcements of the formal suspension of the economic dialogue between China and Australia should not have a lasting impact on markets given the already strained relationship between the two ahead of the event,” wrote ING strategists in a note to clients.

The Canadian dollar hit a three-and-a-half year high, helped by oil price gains and the Bank of Canada’s recent shift to more hawkish guidance.

In cryptocurrencies, ether traded around $3,500 after reaching a record high of $3,559.97 on Tuesday, skyrocketing nearly 800% this month.

Bitcoin declined 0.2% to $57,392.75.

The meme-based virtual currency Dogecoin soared on Wednesday to an all-time high, extending its 2021 rally to become the fourth-biggest digital coin.

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