Bloomberg
Shinzo Abe, who is likely to be elected Japan’s prime minister tomorrow, agreed with his coalition ally Natsuo Yamaguchi of the New Komeito Party on a policy package that includes “bold monetary easing” to reach an inflation target of 2 percent.
While Abe’s Liberal Democratic Party (LDP) won a landslide victory in this month’s election, it lacks a majority in parliament’s upper house. Backing from New Komeito on specific proposals increases the chance that they will become law.
New Komeito had warned during the election campaign that forcing the Bank of Japan to reach a 2 percent inflation target risked undermining its independence. Abe had also pledged to raise defense spending, while Yamaguchi said in an interview on Dec. 6 that any drastic rise was “undesirable.”
The agreement with New Komeito also calls for a “large” extra budget for the current fiscal year ending in March and deregulation of the energy, environment and healthcare sectors. The parties agreed to seek nominal GDP growth of 3 percent, without giving a timeframe for the goal.
The yen rallied from a 20-month low against the US dollar on speculation that monetary-easing bets had driven the Japanese currency down too rapidly.
The yen earlier weakened to the brink of ￥85 per US dollar after Abe said he may change the law governing the central bank unless it boosts its inflation target. Demand for the US dollar was supported as investors sought the safety of the world’s reserve currency amid concern that US lawmakers will fail to avoid the so-called “fiscal cliff.”
“Dollar-yen rose to try 85 on the back of Abe’s comments, but it was sold off in front of key resistance levels,” said Michiyoshi Kato, senior vice president of foreign-currency sales at Mizuho Corporate Bank in Tokyo. “The yen moves are probably caused by limited liquidity in the market.”
The Japanese currency touched ￥84.96 per US dollar, the weakest since April 11 last year, before trading at ￥84.85 at 4:17pm in Tokyo, 0.1 percent stronger than the New York close. It gained 0.1 percent to ￥111.86 per euro, following a 0.8 percent slide on Monday. The US dollar was little changed at US$1.3183.
Japan’s consumer prices excluding fresh food is estimated to drop 0.1 percent in November from a year earlier, according to the median estimate of economists in a Bloomberg News survey before the data release on Friday.
Core inflation has fallen an average of 0.2 percent every month in the past decade.
“Japan’s Abe means business this time,” Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co, said in a Twitter post. “Trillions of yen to be printed. Weak yen, positive inflation.”
The yen has tumbled 13 percent this year, including a 3.6 percent drop in the past month, making it the worst performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The US dollar has weakened 2.7 percent this year and the euro has dropped 0.9 percent.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS