Tue 23 Jan 2018


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  • Today at the stock market Opinion
  • The portfolio today Opinion
  • News
  • flag_japan Japan Update
  • flag_china China Update
  • Today at the stock market

    bull/bearU.S. stocks advanced on Tuesday, as strong results from Netflix helped lift the S&P and Nasdaq Composite, but the Dow Industrials were hemmed in by declines in Johnson & Johnson and Procter & Gamble.

    “There has not been another time in this recovery where Main Street was doing well, where every economy in the world was doing well, and where so far there isn’t really an overwhelming show that we have a significant inflation or interest rate problem which would mandate a valuation change,” said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis. Paulsen cautioned, however, that as the rally continued more challenges were mounting that could cause a pullback. “If it ever does turn, there could be a fair amount of correction,” he said.

    The S&P 500 has reached a streak of 396 trading days without a 5% correction, according to LPL Financial, the longest on record. The benchmark index has closed within 5 percent of a record in 467 of the past 468 trading days.

    S&P 500 earnings growth for the fourth-quarter is expected at 12.4%, according to Thomson Reuters data through Tuesday morning. Of the 68 companies in the benchmark index that have posted results, 76.5% have topped Wall Street expectations.

    • The S&P 500 index rose 6.17 points, or 0.22%, to 2,839.14.
    • The Dow Jones Industrial Average fell 3.79 points, or 0.01%, to 26,210.81,
    • The Nasdaq Composite rose 52.26 points, or 0.71%, to 7,460.29.
    • Advancing issues outnumbered declining ones on the NYSE by a 1.60-to-1 ratio; on Nasdaq, a 1.28-to-1 ratio favored advancers.
    • The S&P 500 posted 135 new 52-week highs and 1 new low; the Nasdaq Composite recorded 232 new highs and 16 new lows.
    • Volume on U.S. exchanges was 6.78 billion shares, above the 6.38 billion average for the full session over the last 20 trading days.

    Technology

    Netflix touched a record high of $257.71 and was last up 9.98% at $250.29, to cross the $100 billion market value threshold. The video-streaming pioneer beat Wall Street targets for new subscribers in Q4/2017.

    Other stocks known as part of the “FAANG” group – Facebook, Apple, Amazon and Google parent Alphabet – also moved higher.

    Verizon slipped 0.43% as its quarterly profit fell short of Wall Street estimates but revenue beat expectations as it added phone subscribers.

    Other Sectors

    Insurer Travelers provided the biggest boost to the Dow, up 4.96% after profit topped estimates.

    Johnson & Johnson fell 4.26%, dragged down by a $13.6-billion charge related to the new U.S. tax law and a court ruling on a crucial patent on its blockbuster rheumatoid arthritis drug Remicade.

    Procter & Gamble dropped 3.09% as investors focused on a drop in gross margins at the world’s largest consumer goods maker.

    Tariffs

    U.S. President Donald Trump on Monday approved steep import tariffs on washing machines and solar panels, a move that was criticized by China, South Korea and Europe and stoked fears about potential retaliation.

    In the wake of the tariffs, shares of Whirlpool rose 3.20% and smaller solar names such as Real Goods Solar, up 33.04% and Sunworks, up 10.71%, moved higher.Reuters

    Market indices

    Market indices
    ^ Market indices today (mouseover for 12 month view) Chart: Google Finance

    Index Ticker Today Change 31 Dec 17 YTD
    S&P 500 SPX (INX) 2,839.13 +0.21% 2,238.83 +6.19%
    DJIA INDU 26,210.81 -0.02% 19,762.60 +6.03%
    NASDAQ IXIC 7,460.29 +0.70% 5,383.12 +8.06%

    Portfolio Indices

    USD and AUD denominated indices over the past 52 weeks (Chart: Bunting)
    ^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting

    Index values

    Index Currency Today Change 31 Dec 17 YTD
    USD-denominated Index USD 3.286 +0.60% 2.105 +7.12%
    Valuation Rate USD/AUD 0.80484 -0.21% 0.72663 +2.49%
    AUD-denominated Index AUD 4.086 +0.80% 2.895 +4.54%

    Portfolio stock prices

    :-) Alphabet Class A closed on a record high of $1,176.17, up 1.03% on yesterday’s record of $1,164.16.
    :-) Alphabet Class C closed on a record high of $1,169.97, up 1.23% on yesterday’s record of $1,155.81.
    :-) Amazon closed on a record high of $1,362.54, up 2.65% on yesterday’s record of $1,327.31.
    :-) Facebook closed on a record high of $189.35, beating its 8 Jan 2018 record of $188.28.
    :-) PayPal closed on a record high of $84.21, up 0.27% on yesterday’s record of $83.98.
    :-) Visa closed on a record high of $124.65, up 0.26% on yesterday’s record of $124.33.
    :-) VMware closed on a record high of $137.96, up 0.93% on yesterday’s record of $136.69.

    Stock Ticker Today Change 31 Dec 17 YTD
    Alphabet A GOOGL $1,176.17 +1.03% $1,053.00 +11.69%
    Alphabet C GOOG $1,169.97 +1.22% $,1045.65 +11.88%
    Apple AAPL $177.04 +0.02% $169.23 +4.61%
    Amazon AMZN $1,362.54 +2.65% $1,169.54 +16.5%
    Ebay EBAY $39.77 +0.48% $37.76 +5.32%
    Facebook FB $189.35 +2.14% $176.46 +7.30%
    PayPal PYPL $84.21 +0.27% $73.61 +14.40%
    Twitter TWTR $22.75 -2.45% $24.01 -5.25%
    Visa V $124.65 +0.25% $114.02 +9.32%
    VMware VMW $137.96 +0.92% $125.32 +10.08%

    FX: USD/AUD

    USD

    DXY movements
    ^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

    The Bloomberg Dollar Spot Index (DXY) fell 0.2%.
    The EUR rose 0.3% to USD 1.2294.
    Britain’s GBP added 0.1% at USD 1.3996.
    Japan’s JPY gained 0.5% to 110.33 per USD, the strongest in almost 19 weeks.
    Bloomberg

    AUD

    AUD movements
    ^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com

    Oil and Gas Futures

    Futures prices

    Prices are as at 15:49 ET

    • NYMEX West Texas Intermediate (WTI): $64.71/barrel +1.79% Chart
    • ICE (London) Brent North Sea Crude: $70.11/barrel +1.56% Chart
    • NYMEX Natural gas futures: $3.55/MMBTU +10.05% Chart

    WEF Annual Meeting: Day 1 at Davos/Klosters

    The World Economic Forum kicked off its week-long annual meeting at Davos today. More

    Bloomberg Coverage of the WEF at Davos 2018 Here

    Press Report [CNN]

    The consensus at the World Economic Forum is that the tax overhaul will boost U.S. growth and increase investment.

    “There are companies all around the world who are looking at the U.S. now and saying, ‘This is the place to be in the developed world,’ ” said Blackstone (BX) co-founder Stephen Schwarzman, who chaired Trump’s economic advisory panel until it was dissolved in August after a series of resignations. “There are going to be a lot of flows into the United States,” he added.

    The changes drop the corporate tax rate to 21% from 35%, and encourage American companies to bring overseas cash back home.

    Credit Suisse CEO Tidjane Thiam said that businesses will now look to do more deals in the U.S. “Tax reform in the U.S. has been exactly what we needed … to give a new impetus to world growth,” he said. “I do believe that the positive impacts of that are underestimated.” He cited the recent $3 billion purchase of Nestle’s (NSRGY) U.S. candy brands by Italian firm Ferrero as a prime example. “There’s a whole pipeline of similar transactions building,” said Thiam.

    Citigroup CEO Michael Corbat predicted the change in tax rules would help power business expansion. “Maybe this is the catalyst that takes us from optimism to confidence,” he said.

    The executives voiced concerns that with the U.S. economy at full employment, businesses may struggle to fill new jobs that result from this wave of investment.
    “The reality of bringing a lot of jobs back is difficult,” said Bank of America (BAC) CEO Brian Moynihan.

    The International Monetary Fund said Monday that the tax cuts are the latest piece of good news for the global economy. The group expects the U.S. economy to grow by 2.7% in 2018, significantly faster than its earlier prediction of 2.3%. Growth will slow to 2.5% in 2019, but that’s still much faster than the IMF’s previous forecast of 1.9%.CNN

    flag_usa US: Import Tariffs

    U.S. President Donald Trump signed an executive order on Tuesday imposing steep import tariffs on washing machines and solar panels, saying the move showed the United States would not be taken advantage of anymore.

    China and South Korea have condemned the tariffs, but Trump said they would not trigger a trade war. “You’re going to have people getting jobs again and we’re going to make our own product again. It’s been a long time,” Trump said.Reuters

    flag_usa US: State Employment and Unemployment. Dec 2017

    Press Release Extract [us_jobs_states]

    Unemployment rates were lower in December in 6 states and the District of Columbia, higher in 1 state, and stable in 43 states, the U.S. Bureau of Labor Statistics reported today. Twenty-five states had jobless rate decreases from a year earlier, 2 states had increases, and 23 states and the District had little or no change. The national unemployment rate was unchanged from November at 4.1 percent but was 0.6 percentage point lower than in December 2016.
    Nonfarm payroll employment increased in 10 states in December 2017, decreased in 3 states, and was essentially unchanged in 37 states and the District of Columbia. Over the year, 25 states added nonfarm payroll jobs and 25 states and the District were essentially unchanged.

    Unemployment

    Hawaii had the lowest unemployment rate in December, 2.0 percent. The rates in California (4.3 percent), Hawaii (2.0 percent), and Mississippi (4.6 percent) set new series lows. Alaska had the highest jobless rate, 7.3 percent. In total, 16 states had unemployment rates lower than the U.S. figure of 4.1 percent, 9 states and the District of Columbia had higher rates, and 25 states had rates that were not appreciably different from that of the nation.

    In December, six states and the District of Columbia had unemployment rate decreases, the largest of which was in the District (-0.4 percentage point). The only over-the-month rate increase occurred in Colorado (+0.2 percentage point). The remaining 43 states had jobless rates that were not notably different from those of a month earlier, though some had changes that were at least as large numerically as the significant changes.

    Twenty-five states had unemployment rate decreases from December 2016. The largest declines occurred in Alabama and Tennessee (-2.8 percentage points and -1.9 points, respectively). The only over-the-year rate increases were in Alaska and South Dakota (+0.7 percentage point and +0.6 point, respectively).

    Nonfarm Payroll Employment

    Ten states had over-the-month increases in nonfarm payroll employment in December 2017. The largest increase in employment over the month occurred in California (+52,700), followed by Florida (+27,400) and Oregon (+14,700). In percentage terms, the largest increase occurred in Wyoming (+1.1 percent), followed by Montana and Oregon (+0.8 percent each). Three states had over-the-month decreases in nonfarm payroll employment in December: Maryland (-20,200, or -0.7 percent), Arkansas (-6,500, or -0.5 percent), and New Hampshire (-4,700, or -0.7 percent).

    Twenty-five states had over-the-year increases in nonfarm payroll employment in December. The largest job gains occurred in California (+342,500), Texas (+306,900), and Florida (+213,500). The largest percentage gain occurred in Nevada (+3.3 percent), followed by Oregon (+2.7 percent) and Utah (+2.6 percent).

    Bureau of Labor Statistics, “State Employment and Unemployment.Dec 2017“, 22 Jan 2018 (10:00) More

    flag_japan Japan update

    BOJ Monetary Policy Statement

    At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided upon the following.

    (1) Yield curve control

    The Bank decided, by an 8-1 majority vote, to set the following guideline for market operations for the intermeeting period.

    The short-term policy interest rate:

    • The Bank will apply a negative interest rate of minus 0.1 percent to the Policy-Rate Balances in current accounts held by financial institutions at the Bank.

    The long-term interest rate:

    • The Bank will purchase Japanese government bonds (JGBs) so that 10-year JGB yields will remain at around zero percent. With regard to the amount of JGBs to be purchased, the Bank will conduct purchases at more or less the current pace — an annual pace of increase in the amount outstanding of its JGB holdings of about 80 trillion yen — aiming to achieve the target level of the long-term interest rate specified by the guideline.

    (2) Guidelines for asset purchases

    With regard to asset purchases other than JGB purchases, the Bank decided, by a unanimous vote, to set the following guidelines.

    a) The Bank will purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at annual paces of about 6 trillion yen and about 90 billion yen, respectively.

    b) As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen, respectively.

    2. The Policy Board also decided, by a unanimous vote, to extend by one year the deadlines for new applications for such measures as the Fund-Provisioning Measure to Stimulate Bank Lending, the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth, and the Funds-Supplying Operation to Support Financial Institutions in Disaster Areas affected by the Great East Japan Earthquake and by the Kumamoto Earthquake.

    Bank of Japan, “Statement on Monetary Policy“, 23 Jan 2018 Statement

    BOJ Monetary Policy Meeting, Outlook Report

    Summary

    • Japan’s economy is likely to continue expanding on the back of highly accommodative financial conditions and underpinnings through the government’s past stimulus measures, with overseas economies continuing to grow at a moderate pace, and maintain growth at a pace above its potential mainly through fiscal 2018. In fiscal 2019, the economy is expected to continue expanding, although the growth pace is projected to decelerate due to a cyclical slowdown in business fixed investment and the effects of the scheduled consumption tax hike.
    • The consumer price index (CPI, all items less fresh food) has continued to show relatively weak developments, excluding the effects of a rise in energy prices, mainly against the background that firms’ wage- and price-setting stance has remained cautious. Nonetheless, medium- to long-term inflation expectations are projected to rise as firms’ stance gradually shifts toward raising wages and prices with an improvement in the output gap continuing. As a consequence, the year-on-year rate of change in the CPI is likely to continue on an uptrend and increase toward 2 percent.
    • Comparing the current projections with the previous ones, both the projected growth rates and the projected rates of increase in the CPI are more or less unchanged.
    • With regard to the risk balance, upside and downside risks to economic activity are generally balanced, and risks to prices are skewed to the downside. On the price front, the momentum toward achieving the price stability target of 2 percent is maintained as the output gap is expected to continue improving and medium- to long-term inflation expectations are projected to rise gradually; however, the momentum is not yet sufficiently firm, and thus developments in prices continue to warrant careful attention.
    • As for the conduct of monetary policy, the Bank will continue with “Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control,” aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will continue expanding the monetary base until the year-on-year rate of increase in the observed CPI (all items less fresh food) exceeds 2 percent and stays above the target in a stable manner. The Bank will make policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target.

    I. The Current Situation of Economic Activity and Prices in Japan

    Japan’s economy is expanding moderately, with a virtuous cycle from income to spending operating. Overseas economies have continued to grow at a moderate pace on the whole. In this situation, exports have been on an increasing trend. On the domestic demand side, business fixed investment has continued on an increasing trend with corporate profits and business sentiment improving. Private consumption has been increasing moderately, albeit with fluctuations, against the background of steady improvement in the employment and income situation. Housing investment has been more or less flat. Meanwhile, public investment has been more or less flat, remaining at a relatively high level. Reflecting these increases in demand both at home and abroad, industrial production has been on an increasing trend, and labor market conditions have continued to tighten steadily. Financial conditions are highly accommodative. On the price front, the year-on-year rate of change in the CPI (all items less fresh food, and the same hereafter) is around 1 percent. Inflation expectations have been more or less unchanged.

    II. Baseline Scenario of the Outlook for Economic Activity and Prices in Japan

    A. Baseline Scenario of the Outlook for Economic Activity

    With regard to the outlook, Japan’s economy is likely to continue its moderate expansion. Through fiscal 2018, domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both the corporate and household sectors, on the back of highly accommodative financial conditions and underpinnings through the government’s past stimulus measures. Business fixed investment is likely to continue increasing, supported by accommodative financial conditions, heightened growth expectations, and increases in Olympic Games-related investment, as well as in labor-saving investment to address the labor shortage. Private consumption is also expected to follow a moderate increasing trend as the employment and income situation continues to improve. Public investment is expected to remain at a relatively high level, mainly reflecting Olympic Games-related demand, although the positive effects resulting from the past stimulus measures are likely to diminish moderately. Meanwhile, overseas economies are expected to continue growing at a moderate pace as advanced economies keep growing steadily and a recovery in emerging economies takes hold on the back of the steady growth in advanced economies and the effects of policy measures taken by emerging economies. Exports are expected to continue their moderate increasing trend on the back of such growth in overseas economies.

    In fiscal 2019, Japan’s economy is expected to continue expanding, supported by external demand, although the growth pace is projected to decelerate due to a slowdown in domestic demand. Specifically, business fixed investment is likely to decelerate, mainly reflecting cyclical adjustments in capital stock after the prolonged economic expansion, as well as Olympic Games-related demand peaking out; household spending is likely to turn to a decline in the second half of the fiscal year due to the effects of the scheduled consumption tax hike. Nevertheless, the increase in exports on the back of the growth in overseas economies is expected to underpin the economy.

    Reflecting this outlook, Japan’s economy is likely to continue growing at a pace above its potential, mainly through fiscal 2018. Comparing the current projections with the previous ones, the projected growth rates are more or less unchanged.

    Looking at the financial conditions assumed in the above outlook, short- and long-term real interest rates are expected to be in negative territory throughout the projection period as the Bank pursues “QQE with Yield Curve Control.” Financial institutions’ proactive lending attitudes as well as favorable conditions for corporate bonds and CP issuance are both likely to be maintained and support firms’ and households’ activities from the financial side. Thus, financial conditions are likely to remain highly accommodative.

    The potential growth rate is expected to follow a moderate uptrend throughout the projection period against the backdrop of the following: progress in implementation of the government’s growth strategy, including regulatory and institutional reforms; an increase in labor participation by women and seniors under such strategy; and firms’ continued efforts toward improving productivity. Along with this, the natural rate of interest is projected to rise, thereby enhancing monetary easing effects.

    B. Baseline Scenario of the Outlook for Prices

    Since the previous Outlook Report, although the year-on-year rate of increase in the CPI has been accelerating, it has continued to show relatively weak developments, remaining slightly positive excluding the effects of energy prices.

    This is attributable to the fact that the mindset and behavior based on the assumption that wages and prices will not increase easily have been deeply entrenched among firms and households, as well as to temporary factors such as a reduction in charges for mobile phone services. Firms have been making efforts to absorb a rise in labor costs by increasing labor-saving investment and streamlining their business process, while limiting wage increases — which correspond to the labor shortage — mainly to part-time employees. As suggested by these developments, firms’ wage- and price-setting stance has remained cautious despite the steady tightening of labor market conditions and the high levels of corporate profits. However, the upward pressure on prices stemming from the rise in firms’ costs has been increasing steadily, partly due to a continued clear uptrend in hourly scheduled cash earnings of part-time employees and a rise in input prices resulting from the past yen depreciation.

    With regard to the outlook, the year-on-year rate of change in the CPI is likely to continue on an uptrend and increase toward 2 percent, mainly on the back of the improvement in the output gap and the rise in medium- to long-term inflation expectations.

    Comparing the current projections with the previous ones, the projected rates of increase in the CPI are more or less unchanged. The timing of the year-on-year rate of change in the CPI reaching around 2 percent will likely be around fiscal 2019.

    The mechanism through which the year-on-year rate of change in the CPI increases toward 2 percent can be explained by the following three factors that determine inflation rates. First, the output gap — which shows the utilization of labor and capital — has widened steadily within positive territory on the back of the steady tightening of labor market conditions and a rise in capital utilization rates. Going forward, as the economy continues its moderate expansion, the output gap is expected to widen further within positive territory through fiscal 2018 and remain substantially positive in fiscal 2019.

    Second, medium- to long-term inflation expectations have been more or less unchanged recently, after having remained in a weakening phase since summer 2015. As for the outlook, such expectations are likely to follow an increasing trend and gradually converge to around 2 percent on the back of the following: (1) in terms of the adaptive component, with the improvement in the output gap, firms’ stance is likely to gradually shift toward raising wages and prices and the observed inflation rate is expected to rise steadily, and (2) in terms of the forward-looking component, the Bank will pursue monetary easing through its strong commitment to achieving the price stability target.

    Third, regarding import prices, a pick-up in crude oil prices since spring 2016 has pushed up energy prices in the CPI, but this effect is likely to wane moderately. On the other hand, as for the impact of foreign exchange rates on consumer prices through import prices, the yen’s depreciation since autumn 2016 is likely to increase upward pressure on prices for the time being.

    III. Upside and Downside Risks to Economic Activity and Prices

    A. Upside and Downside Risks to Economic Activity

    The following three factors are upside and downside risks to the Bank’s baseline scenario regarding the economy.

    The first is developments in overseas economies. Specifically, the following are considered as risks: the U.S. economic policies and their impact on global financial markets; developments in emerging and commodity-exporting economies; negotiations on the United Kingdom’s exit from the European Union (EU) and their effects; and geopolitical risks.

    Second, firms’ and households’ medium- to long-term growth expectations may be either raised or lowered depending on the following: efforts to address medium- to long-term issues such as the aging population; developments in regulatory and institutional reforms, particularly in the labor market; innovation in the corporate sector; and the employment and income situation.

    Third, in the event that confidence in fiscal sustainability in the medium to long term declines, the economy may deviate downward from the baseline scenario through increasing concerns regarding the future and the rises in long-term interest rates associated with them. On the other hand, there is also a possibility that the economy will deviate upward from the baseline scenario if confidence in the path toward fiscal consolidation strengthens and concerns regarding the future are alleviated.

    B. Upside and Downside Risks to Prices

    Other than risks to economic activity, the specific factors that could exert upside and downside risks to prices are as follows. The first factor is developments in firms’ and households’ medium- to long-term inflation expectations. Although inflation expectations are likely to follow an increasing trend, there is a risk that a rise in inflation expectations will lag behind if it takes time for firms’ stance to shift toward raising wages and prices and inflation consequently remains relatively sluggish.

    The second factor is the fact that there are items for which prices are not particularly responsive to the output gap. There is concern about the continued dull responses of administered prices, some services prices, and housing rent, which may continue to constrain the acceleration of CPI inflation. In addition, with regard to goods and services that are difficult to differentiate, their prices may also constrain the acceleration of CPI inflation if competition among firms intensifies further, due mainly to changes in the distribution system and deregulation.

    Third, developments in foreign exchange rates and international commodity prices going forward, as well as the extent to which such developments will spread to import prices and domestic prices, may lead prices to deviate either upward or downward from the baseline scenario.

    IV. Conduct of Monetary Policy

    In the context of the price stability target, the Bank assesses the aforementioned economic and price situation from two perspectives and then outlines its thinking on the future conduct of monetary policy.

    The first perspective concerns an examination of the baseline scenario for the outlook. The year-on-year rate of change in the CPI is likely to increase toward 2 percent. Although it is necessary to carefully examine the fact that firms’ wage- and price-setting stance has remained cautious, the momentum toward achieving the price stability target of 2 percent appears to be maintained. This is because (1) firms’ stance is likely to gradually shift toward raising wages and prices with the steady improvement in the output gap, and (2) medium- to long-term inflation expectations have been more or less unchanged recently and such expectations are projected to rise steadily as further price rises come to be observed widely.

    The second perspective involves an examination of the risks considered most relevant to the conduct of monetary policy. With regard to the outlook for economic activity, upside and downside risks are generally balanced. Regarding the outlook for prices, risks are skewed to the downside, especially concerning developments in medium- to long-term inflation expectations. Examining financial imbalances from a longer-term perspective, there is no sign so far of excessively bullish expectations in asset markets or in the activities of financial institutions. Furthermore, prolonged downward pressure on financial institutions’ profits under the continued low interest rate environment could create risks of a gradual pullback in financial intermediation and of destabilizing the financial system. However, at this point, these risks are judged as not significant, mainly because financial institutions have sufficient capital bases.

    As for the conduct of monetary policy, the Bank will continue with “QQE with Yield Curve Control,” aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will continue expanding the monetary base until the year-on-year rate of increase in the observed CPI (all items less fresh food) exceeds 2 percent and stays above the target in a stable manner. The Bank will make policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target.

    Bank of Japan, “Outlook for Economic Activity and Prices (January 2018)“, 23 Jan 2018 Statement

    Currency: USD/JPY

    JPY movements
    ^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

    Stockmarket: Nikkei 225

    n225 movements
    ^ Nikkei 225 movements over the past week Chart: Google Finance

    flag_china China update

    Currency: USD/CNY

    CNY movements
    ^ CNY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

    Stockmarket: CSI300

    CSI300 movements
    ^ Shanghai CSI300 movements over the past week Chart: Google Finance