Japan

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Japan

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BLOOMBERG

"Trump to Back $200 Billion China Tariffs as Early as Next Week, Sources Say"


Jennifer Jacobs, Shawn Donnan, Andrew Mayeda, Saleha Mohsin

Published:Aug 30 2018, 6:18 PM Last Updated:Sep 01 2018, 1:42 AM

(Bloomberg) -- President Donald Trump wants to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as a public-comment period concludes next week, according to six people familiar with the matter.

Asked to confirm the plan in an interview with Bloomberg News in the Oval Office on Thursday, Trump smiled and said it was “not totally wrong.”

He also criticized management of the yuan, saying China has devalued its currency in response to a recent slowdown in economic growth.

Companies and members of the public have until Sept. 6 to submit comments on the proposed duties, which cover everything from selfie sticks to semiconductors.

The president plans to impose the tariffs once that deadline passes, according to the people familiar with the matter, who spoke on condition of anonymity because the discussions aren’t public.

Broadening the tariff battle would mark the most significant move yet in a months-long trade standoff and dent China’s growth prospects.

Data released on Friday will allay some concerns over the near-term outlook as China’s official factory gauge unexpectedly strengthened this month following government measures to underpin demand.


"China is more prepared, mentally, this time than it was for the previous round of tariffs," said Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing.

"The scale is enormous and once the tariffs materialize, they will definitely send jitters through financial markets."

Such unease was already on display Friday with Asian and European stocks declining, and and U.S. equity futures pointed to a dip at the open.

The yen held on to gains, while the Bloomberg Dollar Spot Index drifted.

The tariff news exacerbated already fragile market sentiment amid currency routs in Argentina and Turkey.

Tariffs Loom

Some of the people cautioned that Trump hasn’t made his final decision, and it’s possible the administration may enact the duties in installments.

The U.S. has so far imposed levies on $50 billion in Chinese goods, with Beijing retaliating in kind.

It’s also possible the president could announce the tariffs next week, but say they will take effect at a later date.

The Trump administration waited about three weeks after announcing in mid-June that it was imposing tariffs on $34 billion of Chinese goods before they were implemented.

The next stage of tariffs on $16 billion of goods took hold in August.

China has threatened to retaliate by slapping duties on $60 billion of U.S. goods.

The Ministry of Finance and Ministry of Commerce didn’t immediately respond to Bloomberg faxes seeking comments on Trump’s intentions.

Tensions with the U.S. may be having an effect elsewhere, helping bring Japan and China closer together.

The nations’ finance ministers agreed in Beijing on Friday that protectionist policies aren’t in anyone’s interest and they would support and promote the multilateral trading system.


The previous day, Japan’s Finance Minister Taro Aso discussed U.S. trade with China’s Vice Premier Liu He, who led a previous round of negotiations with the U.S.

The Trump administration is finalizing the list of Chinese targets and tariff rate, which could range from 10 percent to 25 percent, following six days of public hearings earlier this month.

Trump’s plan to bring down his biggest hit yet on China comes as two-way trade talks show little signs of progress.

China hawks have been on the ascendancy in the Trump administration.

One of them -- U.S. Trade Representative Robert Lighthizer -- has been responsible for one of the president’s biggest trade victories so far by forging a bilateral trade deal to replace Nafta with Mexico.

The deal was announced on Monday and Canada is now negotiating to join.

The latest China tariff decision is causing heated debate within the administration, with Lighthizer and White House trade adviser Peter Navarro pushing for quick action, and Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow arguing for more time, according to people familiar with the matter.

Squeezing China

Trump cut off negotiations with China because of what he perceives as Beijing’s lack of cooperation in nuclear talks with North Korea, one of the people said.

The president wants to squeeze China, believing the U.S. has leverage over Beijing, that person said.

Trump on Wednesday accused China of pressuring North Korea not to bend in nuclear negotiations with the U.S.

But he insisted that the trade differences would be resolved.

“As for the U.S.-China trade disputes, and other differences, they will be resolved in time by President Trump and China’s great President Xi Jinping."

"Their relationship and bond remain very strong,” Trump said on Twitter.

https://www.bloombergquint.com/global-e ... gs.ziRVOzc
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Re: Japan

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BLOOMBERG

"World's biggest pension fund reports record $136 billion loss"


Keiko Ujikane and Shigeki Nozawa

1 FEBRUARY 2019

The world’s biggest pension fund posted a record loss after a global equity rout last quarter pummeled an asset class that made up about half of its investments.

Japan’s Government Pension Investment Fund lost 9.1 percent, or 14.8 trillion yen ($136 billion), in the three months ended Dec. 31, it said in Tokyo on Friday.

The decline in value was the steepest based on comparable data back to April 2008.

Domestic stocks were the fund’s worst performing investment, followed by foreign equities.

While stocks helped the GPIF generate returns for the previous two fiscal years, December’s global rout underscored the risks facing the fund since it revamped strategy in 2014 to accumulate stocks and pare domestic bonds.

The GPIF may have little choice but to invest in equities as fixed-income yields, especially those of Japanese government debt, are too low, said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo.

“It makes a sense for the GPIF to hold some risk assets in this environment because yields are low globally and bond investments don’t give good returns,” Fujiwara said.

“Yet from a pensioner’s point of view, it takes too much risk on its investments.”

More than $10 trillion in equity value was wiped out from the global markets last quarter as an ongoing trade spat between the U.S. and China raised concern over a slowdown in growth.

The Topix index plunged 18 percent in the October-December period, the biggest quarterly decline since 2008, while the S&P 500 Index dropped 14 percent, the most since 2011.

Japan’s currency strengthened 3.7 percent against the dollar in the quarter.

http://www.msn.com/en-us/money/investme ... P17#page=2
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Re: Japan

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REUTERS

"Wreckage confirmed to be crashed Japanese F-35 fighter, pilot still missing"


By Tim Kelly

10 APRIL 2019

TOKYO (Reuters) - Search and rescue teams found wreckage from a Japanese F-35 stealth fighter that crashed over the Pacific Ocean close to northern Japan, but the pilot remains missing, authorities said on Wednesday.

The aircraft, less than one-year-old, was the first F-35 to be assembled in Japan and was only in the air for 28 minutes on Tuesday, a defense official said.

It is only the second F-35 to crash in the two-decades it has been flying.

The advanced, single-seat jet was flying about 135 km (84 miles) east of the Misawa air base in Aomori Prefecture at about 7:27 p.m. (1027 GMT) on Tuesday when it disappeared from radar, the Air Self Defense Force said.

"We recovered the wreckage and determined it was from the F-35," a spokesman for the Air Self Defence Force (ASDF) said, adding that the pilot of the aircraft was still missing.

The aircraft was at the front of a group of four planes out for training maneuvers when it sent an "aborting practice" signal and then disappeared from the radar, Defence Minister Takeshi Iwaya told reporters.

"We'll need to cooperate with the U.S. forces and I believe arrangements are being made for this," Iwaya said, adding the priority was on determining the cause of the accident.

Japan has a total of 13 F-35s, including the one that crashed.

The crashed aircraft was the fifth F-35 delivered to the ASDF, but the first assembled by Mitsubishi Heavy Industries in Japan, a second ASDF official told Reuters.

The previous four aircraft had been used for training in the United States before being brought to Japan, the defense official said.

A representative for Mitsubishi Heavy Industries said the company had no immediate comment.

Mitsubishi Heavy Industries Ltd assembles the aircraft at a plant near Nagoya in central Japan.

Each costs around $100 million, slightly more than the cost of buying a fully assembled plane.

The aircraft had been in the air for 28 minutes when contact was lost, the official said.

The pilot had 3,200 hours of flight time, with 60 hours on the F-35, the official said.

The aircraft crashed in waters that reach a depth of around 1,500 meters, making recovery difficult, the official said.

ONLY SECOND F35 TO CRASH

The aircraft was less than a year old and was delivered to the ASDF in May last year, the ASDF spokesman said.

Japan's first squadron of F-35s has just become operational at Misawa and the government plans to buy 87 of the stealth fighters to modernize its air defenses as China's military power grows.

The crash marks only the second time an F-35 has gone down since the plane began flying almost two decades ago.

It was also the first crash of an A version of the fifth-generation fighter, which is designed to penetrate enemy defenses by evading radar detection.

Lockheed Martin, which manufactures the aircraft, said it was standing by to support the Japanese Air Self Defense Force as needed.

The Pentagon said it was monitoring the situation.

A U.S. military short take off and landing (STOVL) F-35B crashed near the Marine Corps Air Station Beaufort in South Carolina in September prompting a temporary grounding of the aircraft.

Lockheed Martin also makes a C version of the fighter designed to operate off carriers.

Japan's new F-35s will include 18 short take off and vertical landing (STOVL) B variants that planners want to deploy on its islands along the edge of the East China Sea.

(Additional reporting by Chris Gallagher, Chang-Ran Kim and Takashi Umekawa in Tokyo, and Idrees Ali and Chris Sanders in Washington; Writing by David Dolan; Editing by Michael Perry & Simon Cameron-Moore)

http://www.msn.com/en-us/news/world/wre ... P17#page=2
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Re: Japan

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MARKETWATCH

"Japan edges out China as U.S. government’s top creditor"


By Sunny Oh

Published: Aug 15, 2019 4:54 p.m. ET

Step aside, there’s a new kid in town.

Japan reclaimed its previous status away from China as the U.S. government’s biggest creditor for the first time since 2017, according to the widely-watched Treasury International Capital report (TIC) published Thursday afternoon.


The report offers a snapshot of foreign buying of Treasurys at a time when U.S. government bonds have seen a dramatic rally over the course of the year amid persisting trade tensions and unflagging global growth concerns.

Japan’s holdings rose to $1.123 trillion in June, around a three-year high, from $1.101 trillion in May.

China’s Treasury holdings inched up to $1.113 trillion in June, from $1.110 trillion in the previous month.


Overall, the total amount of Treasurys held in foreign investors’ hands rose by $97 billion, to $6.636 trillion in June.

The 10-year Treasury note yield stood at 1.495% on Thursday, its lowest level since August 2016.

The benchmark maturity has retreated more than a single percentage point in 2019 alone, and hovered around the 2% level in June.

Bond prices move in the opposite direction of yields.

The uptick in foreign purchases could help soothe fears that bond buyers will struggle to take down the U.S.’s yawning budget gap.

The Trump administration projected a more-than-$1 trillion fiscal deficit for the full budget year, which ends Sept. 30.

The TIC report also underscores how income-hungry Japanese investors have scrambled to U.S. debt markets in search of positive-yielding assets despite the hefty currency-hedging costs associated with buying dollar-denominated bonds.

“There’s really only one place where you can get relatively high, positive yields for risk-free assets,” said Vinay Pande, head of trading strategies at UBS Global Wealth Management, in a previous interview with MarketWatch.

Japan’s domestic bond markets have been characterized by subzero yields.

Japan’s 10-year government bond yield trades at negative-23 basis points.


But the cost to hedge against outsized fluctuations in currency markets can wipe out the profits from the yield difference between the U.S. and Japan.

This has made even lower-yielding European debt more attractive than their U.S. peers.

That’s why many insurers and pension funds often forgo the use of currency hedges to preserve the income earned from their greenback-denominated investments.

Such buyers may have taken comfort in the greenback’s continued strength against other developed-market currencies despite the Fed’s rate cut in July.

https://www.marketwatch.com/story/japan ... latestnews
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Re: Japan

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MARKETWATCH

"Asian markets come charging back as Bank of Japan pledges support"


By Associated Press

Published: Mar 2, 2020 7:44 a.m. ET

Share prices in Asia bounced back Monday from last week’s retreat, with mainland Chinese indexes gaining more than 3% as data showed progress in restoring factory output after weeks of disruptions from the viral outbreak.

Stocks have been swooning as investors fret the coronavirus outbreak will derail the global economy.

But in those declines, some see opportunities to buy.

Japan’s Nikkei 225 index recovered from early losses, gaining 1% to 21,344.08 after the Bank of Japan promised to step in to support the economy.

The Shanghai Composite Index rose 3.2%.

The Shenzhen jumped 3.8%.

South Korea’s Kospi climbed 0.8% and the Hang Seng in Hong Kong added 0.6%.

Bank of Japan Gov. Haruhiko Kuroda issued a statement Monday, after an early plunge in share prices, saying the central bank “will closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”

On Friday, the BOJ issued plans for purchases of assets for the coming weeks: the central bank already buys tens of billions of dollars’ worth of government bonds and other assets each year as part of its aggressive efforts to maintain cheap credit to help prevent deflation.

Shares fell in Australia, where the S&P ASX/200 lost 0.8% and in Taiwan, which fell 1%.

Stocks were mostly higher in Southeast Asia.

U.S. futures briefly saw a moderate recovery, with the contract for the Dow Jones Industrial Average rising while futures for the S&P 500 also gained, but those advances evaporated.

“It may well be a case of news being not as bad as it could have been,” Jeffrey Halley of Oanda said in a commentary.

“Today’s rallies across Asia have a definite relief rally look to them."

"Measured against the scale of last week’s sell-offs, the bounces this morning are small.”

Stocks sank Friday on Wall Street, extending a rout that left the market with its worst week since October 2008.

Meanwhile, bond prices have soared as investors sought safety, pushing yields to record lows.

On Monday, the yield on the 10-year Treasury note, a benchmark for home mortgages and many other loans, was at 1.14%, held steady from Friday’s levels.

The Dow fell 1.4% to 25,409.36.

The S&P 500 slid 0.8% to 2,954.22, while the Nasdaq rose 0.1%, to 8,567.37.

The damage from the week of relentless selling was eye-popping: The Dow Jones Industrial Average fell 3,583 points, or 12.4%.

Microsoft and Apple, the two most valuable companies in the S&P 500, lost a combined $300 billion.

In a sign of the severity of the concern about the possible economic blow, the price of oil sank 16%.

The market’s losses moderated Friday after the Federal Reserve released a statement saying it stood ready to help the economy if needed.

Investors increasingly expect the Fed to cut rates at its next policy meeting in mid-March.

The virus outbreak that began in central China has rattled markets as authorities shut down industrial centers, emptying shops and severely crimping travel all over the world.

Companies are warning investors that their finances will take a hit because of disruptions to supply chains and sales.

Governments are taking increasingly drastic measures as they scramble to contain the virus.

The rout has knocked every major index into what market watchers call a “correction,” or a fall of 10%, but not more than 20%, from a peak.

The last time that occurred was in late 2018, as a tariff war with China was escalating.

This recent decline comes as stocks were considered overpriced before the outbreak and overdue for another pullback.

The latest losses have wiped out the S&P 500’s gains going back to October.

The benchmark index is still up 6.1% over the past 12 months, not including dividends.

Its weekly loss of 11.5% was the biggest since an 18.2% drop in the week ending October 10, 2008.

Bond prices soared again as investors sought safety and became more pessimistic about the economy’s prospects.

That pushed yields to more record lows.

The yield on the 10-year Treasury note, a benchmark for home mortgages and many other loans, was at 1.07% on Monday, from 1.14% Friday and 1.30% late Thursday.

That’s a record low, according to Tradeweb.

Crude oil prices also rebounded Monday.

U.S. benchmark crude gained 2.8%, or $1.30, to $46.09 per barrel in electronic trading on the New York Mercantile Exchange.

It sank 4.9% on Friday over worries that global travel and shipping will be severely crimped, hurting demand for energy.

The price of benchmark U.S. crude fell 15% last week.

Brent crude, the international standard, jumped 2.6% to $51.37 per barrel.

The virus hit China in December and shut down swaths of that nation by late January.

China is still the hardest hit country and has most of the 86,000 cases world-wide and related deaths.

Its spread far beyond China has caused panic, dashing hopes for containment.

Nearly 60 nations representing every continent, except Antarctica, have confirmed cases.

The latest data show China’s manufacturing plunged in February as antivirus controls shut down much of the world’s second-largest economy.

A monthly purchasing managers index released Monday by Caixin magazine fell to 40.3 from January’s 51.1 on a 100-point scale on which numbers below 50 show activity contracting.

A separate PMI released Saturday by the National Bureau of Statistics and the China Federation of Logistics & Purchasing fell to 35.7 from January’s 50.

Despite the plunge, business confidence rose to a five-year high after the ruling Communist Party launched efforts to revive industry with tax cuts and other aid, Caixin said.

“Manufacturers were confident that output would rise over the next year,” the magazine said in a statement.

The dollar rose to 108.49 Japanese yen from 108.07 yen on Friday.

https://www.marketwatch.com/story/asian ... 2020-03-01
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Re: Japan

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REUTERS

"Foreign holdings of U.S. Treasuries rise in April as rates stabilize -data"


By Gertrude Chavez-Dreyfuss

JUNE 15, 2021

NEW YORK, June 15 (Reuters) - Foreign holdings of Treasuries rose in April, data from the Treasury Department showed on Tuesday, as investors bought back U.S. government debt after yields started to decline from their highs.

Major foreign holders of Treasuries held $7.070 trillion in Treasuries in April, up from $7.028 trillion in March.

Japan, the largest foreign holder of U.S. sovereign paper, led the way, increasing its holdings to $1.276 trillion in April, from $1.24 trillion the previous month.

Japanese investors sold Treasuries in February and March as their holdings declined.

“It looks like Japanese investors sold into the sell-off and then bought once rates stabilized,” said Gennadiy Goldberg, senior rates strategist at TD Securities in New York.

“In February and March, rates were higher and in April they were stabilizing near the peak, so it looks like they bought quite substantially,” he added.

U.S. benchmark 10-year Treasury yields started April with a yield of 1.679%, slipping to 1.631% by the end of that month.

China’s holdings, meanwhile, slid to $1.096 trillion from $1.1 trillion in March.

Its stock of Treasuries has declined for two straight months.


On a transaction basis, foreigners purchased $49.57 billion in Treasuries in April, after record inflows of $118.87 billion the previous month.

Data also showed U.S. corporate bonds had inflows of $10.14 billion in April, down from $43.1 billion in March, which was the largest since May 2008.

Foreign investors, meanwhile, sold $13.3 billion in U.S. equities in April, from purchases of $32.3 billion in March.


April’s U.S. stocks outflow was the first in 12 months.

U.S. residents decreased their holdings of long-term foreign securities, with net sales of $7.5 billion, according to the Treasury data.

Overall, net foreign acquisitions of U.S. long-term and short-term securities, as well as banking flows, fell to a net inflow of $101.2 billion in April, from $146.7 billion in March.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Lisa Shumaker and Dan Grebler)

https://www.reuters.com/article/usa-tre ... SL2N2NX2KV
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Re: Japan

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REUTERS

"Moderna vaccine production continues in EU amid contamination probe"


By Reuters Staff

AUGUST 26, 2021

BRUSSELS/TOKYO (Reuters) -Production of Moderna COVID-19 vaccines at a plant in Spain can continue, the European Union drugs regulator said on Friday, while it carries out its investigation of a suspected metallic contamination incident.

Japan on Thursday suspended the use of 1.63 million doses here shipped to 863 vaccination centres nationwide, more than a week after the domestic distributor, Takeda Pharmaceutical, received reports of contaminants in some vials.


The contaminant found in a batch delivered to Japan is believed to be a metallic particle, Japanese public broadcaster NHK reported, citing health ministry sources.

The European Union drugs regulator said it was investigating the incident at the Spanish plant run by Rovi, but did not find reasons to seek a temporary suspension of production after an initial assessment.

“COVID-19 vaccine production in Rovi is able to continue, following a preliminary risk assessment,” the European Medicines Agency told Reuters in a statement.

“An investigation into the root cause is ongoing."

"EMA will be able to provide more information as the investigation progresses,” it added.

Moderna has so far delivered to the EU nearly 75 million doses of its COVID-19 vaccine, EU public data show.

The company has two contracts with the 27-nation bloc for up to 460 million shots.

Spanish pharma company Rovi, which bottles Moderna vaccines for markets outside of the United States, said the contamination could be due to a manufacturing issue on a production line.

A spokesperson said the company could not say anything more while it was investigating.


Moderna put the lot in question and two adjacent ones on hold.

JAPANESE INVESTIGATION

NHK, in a report published late on Thursday, cited health ministry sources as saying the contaminant was believed to be a particle that reacted to magnets and was therefore suspected to be a metal.

Moderna has described it as “particulate matter” that did not pose a safety or efficacy issue.

A Japanese health ministry official said the composition of the contaminant has not been confirmed.

In a statement, Takeda said it asked Moderna to investigate the issue and that it would work with the ministry to replace the affected supply.

News of the contaminant could prove a fresh setback for Japan’s inoculation drive as it struggles to persuade many - particularly young people - to get vaccinated.

On Friday, eight more prefectures entered a state of emergency here, meaning about 80% of Japan's population is under coronavirus restrictions.

The government reported nearly 25,000 new infections and severe cases at a record 2,000 for Thursday.

The ministry described the suspension of the Moderna batches as a precaution but it prompted several Japanese companies to cancel worker vaccinations and the European drugs regulator to launch an investigation.

Airline ANA Holdings Inc said it had secured more Moderna supplies and would resume inoculations on Saturday after a two-day suspension of the shots.

Another health ministry official said it would take “some time” to tell how many shots from the contaminated batch had been administered in Japan.

Kyodo News estimated at least 176,000 have been used based on municipalities’ figures.

About 54% of Japan’s population has received at least one dose, according to a Reuters tracker.

Taro Kono, the minister in charge of the vaccination programme, said he did not expect the contamination issue to affect the government’s goal of fully inoculating the adult population by November.

Reporting by Chang-Ran Kim and Rocky Swift in Tokyo, Nathan Allen in Madrid, Francesco Guarascio in Brussels; Editing by Jacqueline Wong, Jane Wardell, Gerry Doyle, Jonathan Oatis and Tomasz Janowski

https://www.reuters.com/article/us-heal ... SKBN2FS02D
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Re: Japan

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REUTERS

"Foreign holdings of Treasuries hit record high in October - data"


By Gertrude Chavez-dreyfuss

December 15, 2021

NEW YORK, Dec 15 (Reuters) - Foreign holdings of U.S. Treasuries, led by Japan and China, rose to a record high for the month of October, data from the Treasury department showed on Wednesday.

Major foreign owners of Treasuries showed holdings of $7.648 trillion in October, an all-time peak, compared with $7.549 trillion the previous month.

The record number suggested continued appetite for U.S. government debt given uncertainty about global growth and inflation and amid low bond yields around the world, analysts said.

"U.S. yields were a little higher during the month and that may have attracted some of the buyers and made Treasuries look like a better investment," said Gennadiy Goldberg, senior rates strategist, at TD Securities in New York.

U.S. benchmark 10-year Treasury yields started October with a yield of 1.4650%, rising nearly 10 basis points to 1.5609% by the end of that month.

Japan remained the largest non-U.S. holder of Treasuries with holdings in October of $1.320 trillion, a record peak, from $1.299 trillion the previous month.

China's holdings also increased to $1.065 trillion, from $1.047 trillion in September.

On a transaction basis, foreigners sold Treasuries in the month of October to the tune of $43.5 billion, the largest outflow since May.

But TD's Goldberg said this does not reflect the true picture in terms of foreign holdings of Treasuries because there is a bias toward transactions that does not account for steady holdings.

Data also showed U.S. corporate bonds had inflows for a third straight month with $11.995 billion in October, from $1.09 billion in September.

Foreign investors, meanwhile, sold $21.827 billion in U.S. equities in October, after also selling $10.951 billion the previous month.

Data also showed that U.S. residents reduced their holdings of long-term foreign securities, with net sales of $29.2 billion.

Overall, net foreign acquisitions of U.S. long-term and short-term securities, including banking flows, showed a net inflow of $143 billion in October, from an outflow of $27.3 billion in September.

Reporting by Gertrude Chavez-Dreyfuss; Editing by Rosalba O'Brien and David Gregorio

https://www.reuters.com/markets/rates-b ... 021-12-15/
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Re: Japan

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REUTERS

"Japan's U.S. Treasury holdings drop to lowest since January 2020 -data"


By Gertrude Chavez-Dreyfuss

MAY 16, 2022

NEW YORK, May 16 (Reuters) - Japan’s holdings of Treasuries in March fell to their lowest level in more than two years as a sharp depreciation of the yen against the dollar encouraged Japanese investors to sell U.S. assets to take advantage of the favorable exchange rate for their fiscal year-end.

Japanese holdings fell by $74 billion to $1.232 trillion in March, the lowest level since January 2020, data from the U.S. Treasury department showed on Monday.

Japan, however, remained the largest non-U.S. holder of Treasuries.

“It’s nearly three times the largest sales of Japanese accounts on record, and enormous doesn’t even begin to give it justice,” said Gennadiy Goldberg, senior rates strategist, at TD Securities in New York.

“The yen depreciated significantly in March which allowed Japanese investors to sell Treasuries at more advantageous levels going into their fiscal year-end in March."

"They booked profits and brought money home and these repatriation flows by Japanese investors were done at unprecedented levels.”

The yen fell 5.5% against the U.S. dollar in March.

Overall, foreign holdings of Treasuries fell to their lowest since September, to $7.613 trillion, down from $7.710 trillion in February.

China, the second largest holder of Treasuries, also saw its holdings decline during the month to $1.039 trillion, the lowest since December 2018.

On a transaction basis, net new foreign inflows to Treasuries eased to $48.795 billion in March, from $75.33 billion the previous month.


Treasuries have posted inflows for five straight months.

U.S. benchmark 10-year Treasury yields started March with a yield of 1.7156%, and rose nearly 63 basis points to 2.3452% by the end of the month.

The Federal Reserve, at its policy meeting in March, raised benchmark interest rates by a quarter of a percentage point.

It then lifted rates by 50 bps in May and is on course to tighten rates by the same magnitude at the next two policy meetings.

The Fed actions propelled U.S. yields higher.

In other asset classes, corporate bonds, posted inflows in of $33.38 billion, the largest since March 2021, from inflows of $20.3 billion in February, data showed.

Foreigners, however, sold U.S. equities in March amounting to $94.338 billion, the largest outflow since at least January 1978, when the Treasury Department started keeping track of this data.

Foreign investors sold stocks as the Fed signaled a more aggressive pace of tightening to curb soaring inflation.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chris Reese and Richard Pullin)

https://www.reuters.com/article/usa-tre ... SL2N2X82DQ
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Re: Japan

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REUTERS

"Japan's April factory output slumps in sign of pressure on economy"


By Daniel Leussink and Kantaro Komiya

May 31, 2022

Summary

* April output falls 1.3% m/m, much weaker than expected

* Manufacturers see output up in May, June

*Retail sales rise more than expected in April


TOKYO, May 31 (Reuters) - Japan's factories posted a sharp fall in output in April as China's COVID-19 lockdowns and wider supply disruptions took a heavy toll on manufacturers, clouding the outlook for the trade-reliant economy.

Separate data showed retail sales posted the largest rise in nearly a year as consumers stepped up spending after the government eased pandemic curbs, withstanding pressure from wider price rises that threaten to hurt demand.

Factory output dropped 1.3% in April from the previous month, official data showed on Tuesday, on sharp falls in the production of items such as electronic parts and production machinery.

It was the first fall in three months and much weaker than a 0.2% decline expected by economists in a Reuters poll.

The data comes a day after Toyota Motor Corp missed its global production target for April with its output falling more than 9% year-on-year, as China's lockdowns exacerbated a parts shortage.

The world's largest automaker by sales had already on Friday cut its global production plan for June and signalled the possibility of lowering its full-year output plan of 9.7 million vehicles.

"Japan's production is likely to keep stalling in the short term as disruptions in the global supply chain continue," said Kazuma Kishikawa, economist at Daiwa Institute of Research.

A full recovery of goods transportation from China would likely take time even after Shanghai ends its strict COVID-19 lockdown from Wednesday, Kishikawa said, adding that it was likely to weigh on Japanese output.

"Logistics won't be restored in a day," he added.

While activity in Japan's services sector is picking up as the pandemic subsides, the country's manufacturing sector has been pressured by supply disruptions and higher material prices caused by Russia's war in Ukraine.

SERVICES RECOVERY?

High-tech chip and parts shortages could hurt consumption and exports of durable goods such as cars due to output disruptions, said Takeshi Minami, chief economist at Norinchukin Research Institute.

"But spending on services is expected to eclipse that so growth will likely come in positive in the second quarter," said Minami.

He believes a technical recession, defined as two consecutive quarters of economic contraction, is unlikely.

Analysts expect gross domestic product (GDP) to grow an annualised 4.5% this quarter, with a majority seeing a recovery to pre-pandemic levels, according to a Reuters poll conducted in May.

That would follow the decline seen in the first quarter.

"The soft activity data for April suggest that the Q2 rebound may disappoint, though it's worth noting that they don't tell us anything about the recovery in the service sector," wrote Tom Learmouth, Japan economist at Capital Economics, in a note.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to return to growth in May, gaining 4.8%, followed by a 8.9% advance in June.

Learmouth said while such forecasts would point to a strong rebound this quarter, firms' production plans have been "overly optimistic", even with supply shortages, suggesting some downside.

Separate data showed retail sales grew 2.9% in April from a year earlier, marking their sharpest gain since May 2021.

That was bigger than the median market forecast for a 2.6% rise.

The government also said a consumer confidence index rose in May for the second straight month, while the jobless rate edged down to a more than two-year low of 2.5% in April from the previous month's 2.6%.

Reporting by Daniel Leussink and Kantaro Komiya; Additional reporting by Yoshifumi Takemoto; Editing by Sam Holmes

https://www.reuters.com/markets/europe/ ... 022-05-31/
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