Since Abe took office in December, the yen has dropped by more than 10 percent against most major currencies and economic growth has accelerated. US willingness to broker a deal for debt ceiling creates optimism for asian stocks, and uncertainty in the short term for USDJPY, in comparison with the Nikkei. Japan Seeks to Export More High-End Food For the short-termers, the prospect of extra monetary stimulus and a weaker yen made Japanese stocks an easy bet. For longer-term investors, the political stability that came with Mr. Abe’s second national election victory in July, the unveiling of structural reform plans and his ability to execute, for example, a hike in the national sales tax were among factors prompting greater investment in Japanese equities over the next two or three years. Australia’s dollar held a four-day gain before the central bank releases minutes of it last policy meeting as traders bet against further interest rate cuts. The unemployment rate had increased to 5.8 per cent, the participation rate had declined and the level of employment was little changed from earlier in the year. Members noted that hours worked had increased. The effect of low interest rates was evident across a range of instruments. While credit growth remained moderate, there were signs of an increased appetite for borrowing, most notably among investors. Yellen is a potential candidate who targets unemployment rate instead of rates to spur economic growth. Read up more :)
Posted on: Tue, 15 Oct 2013 09:05:23 +0000