💡 (12 Must Update) China & Japan 👇
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🎯 (12 Must Update) China & Japan 👇
JAPANESE GOVERNMENT BOND
The latest messaging from the U.S. Federal Reserve indicated that interest rates would remain higher for longer, prompting a surge in bond yields.
The yield on the 10-year Japanese government bond rose to 0.83%, its highest level in around 10 years, from 0.76% at the end of the previous week.
The Bank of Japan (BoJ) adjusted the parameters of its yield curve control policy in July, effectively allowing yields to rise more freely but capping them at 1%.
In a sign that the central bank wants a gradual rise in yields and no sharp moves toward its ceiling, it again intervened during the week to slow the pace of increases, announcing an unscheduled bond-purchase operation.
INFLATION SLOWS BUT REMAINS ABOVE BOJ’S TARGET
Price increases remained above the BoJ’s 2% target for the 18th straight month, and the BoJ is widely expected to revise up its inflation forecasts at its October meeting.
The focus remains on wage growth, where a move higher in pay demands for next year could indicate changing wage-setting behavior and rising confidence that the BoJ is getting closer to its target.
The Japanese Trade Union Confederation, an umbrella organization known as Rengo, plans to demand a wage hike of at least 5% in the 2024 “shunto” labor-management talks between unions and companies.
CHINA STOCKS
Stocks in China fell sharply as deepening property sector woes offset optimism about a better-than-expected gross domestic product report.
The Shanghai Composite Index declined 3.4% while the blue chip CSI 300 gave up 4.17%, erasing all gains from the reopening rally earlier in the year.
In Hong Kong, the benchmark Hang Seng Index fell 3.6%, according to FactSet.
Other data showed that parts of China’s economy may be stabilizing. Retail sales rose a better-than-expected 5.5% in September from a year earlier, up from 4.6% in August.
Industrial production growth was unchanged from August, while urban unemployment fell slightly.
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Disclosure
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.