Japanese Yen Recovered, Asian Stocks Tumbled

Market Reviews

Japanese Yen reinforced to trade as the strongest on weakness at Asian stock market, which was in turn caused by Donald Trump’s pledge to impose additional tariffs on $267 billion in Chinese goods. Aussie follows Yen. Nikkei lifted 0.13%. China Shanghai SSE reduced -0.73%. Hong Kong HSI fell -1.09%. Singapore Strait Times dropped -0.58%. Today’s most notable event is ECB and BoE meetings. Investors are looking forward to hearing their economic forecasts.

Giovanni Tria, Italy’s Economy Minister, announced that new coalition will respect EU fiscal rules. And, budget plans would only be presented step-by-step. He reaffirmed: “almost all reforms will start to be implemented gradually.” And, “we are looking into Italy’s big state balance sheet to find financial resources to be shifted toward these measures.” Tria also said the government should bring down the 130% debt to output ratio. Italian 10 year yield declined August maximum of 3.281 the Economy Minister’s statement. But, now it’s above 3%.

Shinzo Abe (Japanese Prime Minister) addressed Donald Trump’s threats to impose tariffs on Japan. The U.S. President had recently stated: “if we don’t make a deal with Japan, Japan knows it’s a big problem.” Abe maintained his rationality and restraint, saying that trade war will be harmful for everybody.

Meanwhile, China expanded imports from EU (10.6% yoy) and AU (34.0% yoy). Import from US declined to 2.7% yoy. Exports to the US rose at 13.2% yoy. Trade surplus with the US rose 18.4% yoy. Trade surplus with EU lifted 4.0% yoy. Trade deficit with AU soared 45.7% yoy. China’s Consumer Price Index increased 0.1% to 2.2% yoy in August. Producer Price Index fell 0.5% at 4.1% yoy. Japanese Gross Domestic Product of the second quarter closed at 0.7% qoq, up from 0.5% qoq. GDP deflator was up 0.1% yoy. Current account surplus lowered to 1.48 trillion Yen.

Today, Eurozone will release Sentix investor confidence, UK will publish GDP, productions and construction output data.