Connect with us

Markets

Japan Stocks Rise on Weaker Yen as U.S. Rate Hike Bets Increase

Published

on

asian stocks

Shares in Tokyo rose and the yen weakened as the prospect of Federal Reserve tightening boosted the dollar while Japan’s central bank head said he saw a possibility of expanded stimulus as soon as next month.

Japanese stocks gained a second day on volume 27 percent below the 30-day intraday average at the trading break, while the yen traded near its lowest level since 2014. Fed Vice Chairman Stanley Fischer signaled that a 2016 rate hike is still under consideration. BOJ Governor Haruhiko Kuroda said in an interview published Saturday in the Sankei newspaper that there’s a “sufficient chance” the bank will add to its unprecedented easing at September’s policy meeting.

“The yen is heading for more weakening against the dollar as interest rates diverge with the U.S., which the market is taking positively,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center. “There are views in the market that insist there are no options left for more easing, but Mr. Kuroda probably wants to leave them with hope that there are multiple approaches he could take.”

The BOJ won’t hesitate to act based on discussions on the results of a comprehensive review at its September 20-21 board meeting, Japan’s central bank governor said in the Sankei interview. Kuroda regularly says the central bank won’t hesitate to add stimulus when needed, but he appears to be moving beyond his usual phrasing. He said there is “technically” room for deeper negative rates while ruling out the use of so-called helicopter money.

Negative Rates

Banks weighed most heavily on the Topix on Monday amid concern negative interest rates could cut into their profits. Mitsubishi UFJ Financial Group Inc., the biggest lender, fell 1.3 percent.

“If market expectations for a deepening of negative interest rates strengthens, the rebound in bank shares is going to slow down,” said Nobuhiko Kuramochi, head of investment information at Mizuho Securities Co. in Tokyo.

About twice the number of shares rose as fell on the Topix, with just seven of the 33 industry groups declining.

Agricultural stocks led drops on the Topix, with seafood-products manufacturer Nippon Suisan Kaisha Ltd. sinking 13 percent after saying it plans to sell shares to raise as much as 16.8 billion yen ($167 million).

West Japan Railway Co. rose 3.3 percent, while East Japan Railway Co. added 3.7 percent. Both were among the biggest gainers on the Nikkei 225.

Oil explorer Inpex Corp. dropped 3 percent after oil prices fell as Iraq seeks to increase exports amid a global overhang of crude inventories.

Futures on the S&P 500 Index fell 0.2 percent. The underlying measure dropped 0.1 percent on Friday as phone companies had their worst week since 2014 and amid elevated valuations and rising speculation that borrowing costs will increase before year-end. The probability of the Fed hiking rates by the end of the year was 51 percent on Friday, up from 42 percent a week earlier.

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.

Crude Oil

COVID-19 Plunges Nigeria’s Oil Revenue by 41% in the First Nine Months of 2020

Published

on

naira

COVID-19 Plunges Nigeria’s Oil Revenue by 41% in the First Nine Months of 2020

Nigeria’s oil revenue declined by 41.44 percent in the first nine months of 2020 to $2.033 billion, according to the latest data from the Nigerian National Petroleum Corporation, NNPC.

This represents a decline of 41.44 percent from $3.47 billion filed in the same period of 2019 when there was no COVID-19.

In the September 2020 edition of NNPC’s Monthly Financial and Operations Report (MFOR), revenue from oil and gas rose by 16 percent to $120.49 million in the month of September, a 66 percent or $234.81 million drop from $355.3 million posted in the same month of 2019.

The global lockdowns caused by the COVID-19 pandemic plunged Nigeria’s crude oil sales and global demand for the commodity. This was further compounded by Nigeria’s high cost of production compared to Saudi Arabia, Russia and others that were offering discounts to boost sales during one of the most challenging periods in human history.

Experts like Prof. Yinka Omorogbe, President of Nigeria Association of Energy Economics, NAEE, were not surprised with the drop in earnings given the effect of COVID-19 on the world’s economy.

She, however, called for the revamp of the nation’s petroleum sector laws and diversification of the economy away from oil revenue dependence. She said “Covid-19 made 2020 a very hot year and it battered the oil industry internationally and we are not an exception; so we could not have been unaffected”.

She also said the effect of the fall “is definitely a wake-up call; we have to diversify, strengthen our other resources and capabilities”.

Omorogbe, a former NNPC Board Secretary, urged the government and the operators in the sector to look inward and think strategically, stating: “think medium term, think of where they want to be and the government, above all, must think of how best we can utilize our resources, so that we can achieve our objectives once we know and define them.

“It is a clear wake-up call, if not we will just sit here and find that we have become one of the poorest nations in the world”, she noted.

Continue Reading

Commodities

Crude Oil, Other Commodities Closing Price for Monday

Published

on

Crude oil

Crude Oil, Other Commodities Closing Price for Monday

Brent crude oil, Nigeria’s crude oil benchmark, gained 47 cents to $55.88 per barrel on Monday, while the US crude oil expanded by 50 cents to $52.77 per barrel.

Gold for February delivery fell $1 to $1,855.20 an ounce. Silver for March delivery fell 7 cents to $25.48 an ounce and March copper was little changed at $3.63 a pound.

The dollar fell to 103.80 Japanese yen from 103.83 yen. The euro fell to $1.2139 from $1.2167.

Wholesale gasoline for February delivery rose 1 cent to $1.56 a gallon. February heating oil rose 2 cents to $1.59 a gallon. February natural gas rose 16 cents to $2.60 per 1,000 cubic feet.

Continue Reading

Gold

Gold Gained Ahead of Joe Biden Inauguration 2021

Published

on

Gold

Gold Gained Ahead of Joe Biden Inauguration 2021

Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.

The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.

According to Michael McCarthy, the Chief Market Strategies, CMC Markets, the surged in gold price is a result of the projected drop in dollar value or uncertainty.

He said, “The key factor appears to be the (U.S.) currency.”

As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.

Also, the effectiveness of the vaccines can not be ascertained until wider rollout.

Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.

Continue Reading

Trending