Japanese shares rose as the yen extended declines after Federal Reserve Chair Janet Yellen said the case for tightening had strengthened while Bank of Japan Governor Haruhiko Kuroda reiterated a pledge to add to stimulus if needed.
Electrical-appliance and auto makers gained after the yen sank 1.3 percent against the dollar on Friday following Yellen’s remarks at Jackson Hole and fell a further 0.1 percent in morning trading on Monday. She cited continued solid performance in the U.S. labor market. Kuroda, meanwhile, said there’s “ample space for additional easing” through quantitative or qualitative easing or deeper cuts to negative interest rates.
“The U.S. put off a rate increase in wake of Brexit, and the view seems to be that the state of the country’s economy has further improved,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center. “There’s no reason to wait another few months for a U.S. rate hike.”
Traders see the likelihood of a September U.S. rate rise at 42 percent following Yellen’s remarks, up from 22 percent on Aug. 19, according to Fed futures data compiled by Bloomberg. They see the odds of higher borrowing costs by December at 65 percent.
All but two of the 33 industry groups on the Topix advanced, with volume about 1.8 percent higher than the 30-day intraday average.
- Carmaker Toyota Motor Corp. provided the biggest boost to the Topix, rising 3.8 percent, while Honda Motor Co. added 3.4 percent.
- Fujitsu Ltd. advanced 2.6 percent. The electronic-equipment maker plans to automate production of 90 percent of some mobile phones as it seeks to cut manufacturing costs by half, the Nikkei newspaper reported.
- Mitsubishi Chemical Holdings Corp. rose the most on the Nikkei 225. The company climbed 7.3 percent after SMBC Nikko Securities Inc. analyst Shinobu Takeuchi upgraded the stock to outperform from neutral.
Futures on the S&P 500 Index fell less than 0.1 percent. The underlying measure slid 0.2 percent on Friday, retreating for a third day.
Crude Oil Dips Slightly on Friday Amid Demand Concerns
On Friday, global crude oil prices experienced a slight dip, primarily attributed to mounting concerns surrounding demand despite signs of a tightening market.
Brent crude prices edged lower, nearing $83 per barrel, following a recent uptick of 1.6% over two consecutive sessions.
Similarly, West Texas Intermediate (WTI) crude hovered around $78 per barrel. Despite the dip, market indicators suggest a relatively robust market, with US crude inventories expanding less than anticipated in the previous week.
The oil market finds itself amidst a complex dynamic, balancing optimistic signals such as reduced OPEC+ output and heightened tensions in the Middle East against persistent worries about Chinese demand, particularly as the nation grapples with economic challenges.
This delicate equilibrium has led oil futures to mirror the oscillations of broader stock markets, underscoring the interconnectedness of global economic factors.
Analysts, including Michael Tran from RBC Capital Markets LLC, highlight the recurring theme of robust oil demand juxtaposed with concerning Chinese macroeconomic data, contributing to market volatility.
Also, recent attacks on commercial shipping in the Red Sea by Houthi militants have added a risk premium to oil futures, reflecting geopolitical uncertainties beyond immediate demand-supply dynamics.
While US crude inventories saw a slight rise, they remain below seasonal averages, indicating some resilience in the market despite prevailing uncertainties.
Nigeria’s Petrol Imports Decrease by 1 Billion Litres Following Subsidy Removal
Nigeria’s monthly petrol imports declined by approximately 1 billion litres following the fuel subsidy removal by President Bola Ahmed Tinubu, the National Bureau of Statistics (NBS) reported.
The NBS findings illuminate the tangible effects of this policy shift on the country’s petroleum importation dynamics.
Prior to the subsidy removal, the NBS report delineated a consistent pattern of petrol imports with quantities ranging between 1.91 billion and 2.29 billion litres from March to May 2023.
However, in the aftermath of Tinubu’s decision, the nation witnessed a notable downturn in petrol imports, with figures plummeting to 1.64 billion litres in June, the first post-subsidy month.
This downward trend persisted in subsequent months, with July recording a further reduction to 1.45 billion litres and August witnessing a significant decline to 1.09 billion litres.
August’s import figures represented a decrease of over 1 billion litres compared to the corresponding period in 2022.
The NBS report underscores the pivotal role of the subsidy removal in reshaping Nigeria’s petrol import landscape with the Nigerian National Petroleum Company emerging as the sole importer of fuel in the current scenario.
Despite higher petrol imports in the first half of 2023 compared to the previous year, the decline in June, July, and August underscores the profound impact of subsidy removal on import dynamics, affirming the NBS’s latest findings.
Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO
The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.
Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.
Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.
He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.
Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.
The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.
Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.
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