Aurelia Butler

TOKYO (Reuters) -The yen surged against the dollar in early Asian hours on Thursday on what traders suspected was another round of intervention by Japanese authorities to stop a sharp slide in the currency.The dollar fell sharply to precisely 153 yen from about 157.55 yen for reasons that were not immediately clear, but traders and analysts were quick to say it was likely yen buying directed by Japan’s Ministry of Finance.The move came in a quiet period for the currency pair, after the U.S. stock market had closed and with the Federal Reserve’s monetary policy meeting ending hours earlier.”It caught markets off guard because, obviously, it happened in the U.S. session and seemed to be timed with the FOMC to take advantage of a weaker dollar,” said Kyle Rodda, senior financial market analyst at Capital.com in Melbourne.”The ‘sneak attack’ element really is the MOF looking to punish speculators and send a warning about shorting the yen: Blow them out so they think twice next time.”When contacted by Reuters, Japan’s vice finance minister for international affairs, Masato Kanda, who oversees currency policy, said he had no comment on whether Japan had intervened in the market.A U.S. Treasury spokesperson declined to comment on the move in the currency pair.The yen was changing hands at around 155.58 as of 2326 GMT, giving back about half of earlier spike.Kanda had warned earlier this week that authorities were ready to deal with foreign exchange matters “24 hours” a day. The MOF issues the order to intervene and the Bank of Japan carries out the trades.The yen also staged a sudden, steep rally on Monday, when Japan markets were shut for a national holiday. From a 34-year trough at 160.245 per dollar, the yen strengthened as far as 154.4.Money market data the following day suggested Japan’s finance ministry had spent around $35 billion to prop up the currency on Monday. The yen remains down about 10% against the dollar this year, despite the Bank of Japan’s decision to raise interest rates for the first time since 2007 in March.That’s as a still fragile exit from deflation forces Japanese policymakers to go slow on removing monetary stimulus, while a robust U.S. economy and stubborn inflation delay Fed rate cuts.Fed Chair Jerome Powell said on Wednesday that it was likely to take longer than previously expected to gain the “greater confidence” needed for policy easing.”As long as there is a huge gulf between U.S. and Japanese rates, the efforts from the Bank of Japan to push against these fundamentals will likely have limited effect,” said James Kniveton, senior corporate FX deal at Convera in Melbourne.”The market is likely seeing the lower USD/JPY rate when intervention occurs as an opportunity to buy dips rather than a sign of a trend reversal. The Bank of Japan does have a lot of firepower, but currently they are swimming against the tide.” More

Oil fell sharply overnight as the prospect of cuts seemed more distant and after a surprise jump in U.S. stockpiles, with Brent crude futures hitting a seven-week low of $83.44. [O/R]Japan’s Nikkei fell 0.7% at the open and South Korean shares lost 0.5%. Australian shares were flat. S&P 500 futures rose 0.4% after the cash index had closed 0.3% lower overnight. [.N]The dollar’s value fell by almost five yen in 40 minutes of late New York trade to touch 153 yen. It was last at 155.63 yen, having traded around 157.5 before the sudden dive.The move follows sharp yen gains on Monday which Japanese money market data suggested may have been intervention to the tune of some $35 billion in dollar selling. [FRX/]”There was an intervention (by Japan),” said Thierry Wizman, global foreign exchange and rates strategist at Macquarie, of the most recent yen leap.”They are trying to dissuade speculators from buying dollars and selling yen by making the experience painful for them.”Earlier the Federal Reserve had left interest rates on hold and chair Jerome Powell told reporters that inflation was too high and progress in bringing it down was uncertain.”There are paths to not cutting and there are paths to cutting. It’s really going to depend on the data,” he said.Treasuries rallied, pushing yields lower, as the Fed also said it would slow down its balance-sheet runoff.Ten-year Treasury yields fell 9.3 basis points to 4.591% in New York. Two-year Treasury yields fell 10.7 bps to 4.939%. [US/]”We think the market takeaway is that the (Fed) now wants to distance itself as far as possible from speculation that it might hike,” said Steve Englander, Standard Chartered (OTC:SCBFF)’s head of G10 currency research and North America macro strategy, in a note.After pricing in as many as six rate cuts for 2024 earlier this year, markets now price only one, in December. Overnight chipmaker Qualcomm (NASDAQ:QCOM) beat market expectations for sales and profit, sending its shares up 4% in after-hours trading. Focus later on Thursday will be on Apple (NASDAQ:AAPL) results, where markets have braced for a big drop in sales and are waiting to hear of the company’s plans for AI in iPhones. Much of Asia is returning from a holiday that had closed markets on Wednesday, though Chinese bond, currency and stock markets remain shut through the rest of the week.In foreign exchange trade the yen’s gains – and relief that the Fed is not talking about hikes – pushed the dollar lower.Early in the Asia session the Australian dollar was 0.1% higher at $0.6513.The euro was steady at $1.0715.Outside of oil the stronger dollar weighed on other commodities. Copper prices fell in London. Gold rose overnight and was last holding at $2,324 in Asia trade. [GOL/] More

CARACAS (Reuters) -Public employees in Venezuela will receive $130 per month in bonuses, President Nicolas Maduro said on Wednesday, amid demands by workers for salary increases and months ahead of presidential elections in which Maduro is seeking a third term.Maduro gave scant details in his announcement, but ruling party lawmaker Francisco Torrealba later said on social media that bonuses will be paid out in local bolivars equivalent to set amounts in U.S. dollars.Workers will receive a $90 “Bonus Against Economic War” and a $40 food bonus, Torrealba said on X.Wage increases have failed to keep pace with double- and triple-digit annual inflation recorded over the past year. Consumer prices increased 67.75% year-on-year through March.The monthly minimum wage of 130 bolivars, equivalent to $3.5 at the official rate, has not been adjusted since March 2022, but the government has paid out bonuses to public sector employees and retirees. Bonsues were last raised to $100 in February.”Today I decide to raise the comprehensive minimum income of workers to $130 at least,” Maduro said at an event marking International Workers’ Day. “We are going to recover the income of workers, the income of the country, step by step.”Maduro’s government this year has intensified efforts to bring inflation down to two digits, as it looks to slightly increase social spending ahead of the vote.Unions of teachers, university professors, healthcare workers and others have demanded salary adjustments to compensate for losses to inflation over the last few years.The cost of basic food for a family is more than $500 per month, according to the teachers’ union. More

NEW YORK (Reuters) -The looming U.S. presidential election will not influence the Federal Reserve’s interest rate decisions, Fed Chair Jerome Powell said on Wednesday, adding that policymakers were “at peace” with keeping political considerations out of their decision-making process.Powell, speaking in a news conference after the end of the U.S. central bank’s latest policy meeting, said Fed policy decisions will be guided by “what we think the right thing for the economy is,” repeating a long-held stance of ignoring politics in the central bank’s economic analysis.”If you go down the road, where do you stop? And so we’re not on that road,” Powell said. “We’re on the road where we’re serving all the American people, and making our decisions based on the data and how those data affect the outlook and the balance of risks.The issue of the Fed’s independence jumped back into the spotlight last week when the Wall Street Journal reported that allies of former President Donald Trump are drafting proposals that would attempt to erode the central bank’s independence and give Trump more influence over the Fed if he wins the Nov. 5 election.Trump, who nominated Powell to be Fed chief in late 2017, unleashed withering verbal attacks on the Fed for raising rates in 2018, calling its policymakers “boneheads” and “loco” and threatening to fire or demote Powell on multiple occasions. But the controversy was not mentioned in the Fed’s 2018 meeting transcripts, which were released earlier this year.Powell said that Fed meeting transcripts also show no evidence that officials have allowed the pending election to affect their policy choices.When it comes to the election, “we’re at peace over it, we know that we’ll do what we think is the right thing, when we think it’s the right thing” Powell told reporters.U.S. Treasury Secretary Janet Yellen, who preceded Powell as Fed chief, also put in a plug for the central bank’s independence on Wednesday, releasing excerpts of a speech she will deliver on Friday in the battleground state of Arizona in which she warns that the erosion of democratic institutions would hurt U.S. economic growth and prosperity.”As Chair of the Federal Reserve, I insisted on the Fed’s independence and transparency because I believe it matters for financial stability and economic growth,” Yellen will say, according to the excerpts. “Recent research has been consistent with my belief: It has shown that greater central bank independence is associated with greater price stability, which contributes significantly to long-term growth.” More

LONDON (Reuters) – Foreign direct investment (FDI) into Europe fell 4% last year, with Germany seeing a sharp 12% drop in projects amid concern over its economic slowdown and energy security, a survey by professional services group EY found.It was the first annual fall in the number of European FDI projects registered since the COVID-19 pandemic, after gains seen in both 2021 and 2022. Foreign investment into the region is now 14% lower than at its peak in 2017.Companies surveyed cited volatile energy prices, turbulent domestic politics and the steady stream of new European regulation in areas ranging from artificial intelligence, sustainability and data protection among their concerns. EY EMEIA Area Managing Partner Julie Teigland said the sheer pace of regulation coming on-stream was creating daunting compliance challenges in particular for smaller companies.”The last 12 months will go down as probably the largest period of regulation in EU history,” said Teigland.”We are not saying regulation is bad … but allowing SMEs (small and medium-sized enterprises) the time to deal with it is going to be important,” she added.European Union leaders agreed in principle this month to a wide-ranging set of reforms aimed at revitalising the bloc’s economy but exposed differences on freeing up the money required to do so.Those reforms ranged from deepening the EU’s single market and fostering more research to creating a unified energy market.In the EY survey, France topped the foreign investment list even though its tally of investment projects fell by 5% – albeit still creating 4% more jobs compared to the year before.Britain overtook Germany for second place, seeing a 6% gain in FDI projects in 2023. That came after a comparable fall the year before amid concerns about trade snags and labour shortages linked in part to Brexit.The war between Russia and Ukraine hit FDI in bordering countries hard: Romania saw a 13% fall, Finland 32%, Latvia 31% and Lithuania 40%. More

(Reuters) -National Australia Bank on Thursday posted a drop of about 13% in its first-half cash earnings as it grappled with high operating costs and cutthroat competition, but raised its ongoing share buyback program by A$1.5 billion ($979 million).NAB, the country’s biggest business lender, reported a common equity tier 1 ratio, a closely watched measure of its spare cash, of 12.15% as of March-end, well above its target of 11% to 11.5%, allowing the lender to buy back more shares.”Our continued focus on capital generation supports our objective to reduce our share count over time through on-market buybacks, while maintaining a strong capital position,” Chief Executive Officer Andrew Irvine said.Under the buyback program, ongoing since August last year, NAB will now purchase shares worth a total of A$1.7 billion, which will reduce its common equity tier 1 ratio by about 40 basis points.A rise in borrowing costs and increased competition in the lending industry for new business have prompted banks to offer competitive rates on loans while paying higher interest rates on deposits, squeezing their net interest margins.NAB’s net interest margin – a closely watched key measure of profitability – fell to 1.72% from 1.77% a year earlier, but still beat the Visible Alpha consensus estimate of 1.69%.”This mainly reflects lending margin competitive pressures primarily relating to housing lending, along with higher term deposit costs and deposit mix impacts,” the lender said in its results report.The bank predicted that real economic growth in Australia will remain below trend over the near term due to pressures from high-interest rates and sticky inflation.”However, some relief is anticipated later this year with expected tax cuts and a forecast easing in monetary policy from November should inflation continue to moderate,” the bank said.Its cash earnings came in at A$3.55 billion ($2.32 billion) for the six months ended March 31, in line with Visible Alpha’s consensus estimate of A$3.55 billion compiled by UBS, but below last year’s A$4.07 billion.NAB raised its interim dividend by 1 cent to 84 Australian cents per share.($1 = 1.5319 Australian dollars) More

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