Aurelia Butler

SINGAPORE (Reuters) – The dollar kicked off the last quarter of the year on the front foot on Monday as the prospect of higher-for-longer U.S. rates provided solid support, pushing the yen to an 11-month low.Currency moves were subdued in early Asia trade with parts of Australia out for a holiday and China away for its Golden Week, though analysts said a narrowly-averted U.S. government shutdown could bring some relief to markets.The yen slid to a roughly 11-month low of 149.74 per dollar, as the Japanese currency continued its slow-but-steady decline toward the 150 mark, a level which some see as a line in the sand that would spur Japanese authorities to intervene in the currency market as they did last year.”Fear of intervention by the BOJ above the 146 level has come and gone and the currency is now above 148 to the dollar and the BOJ remains absent from currency markets,” said Olivier d’Assier, Axioma’s head of applied research for APAC.A summary of opinions at the BOJ’s September meeting out on Monday showed policymakers discussed various factors that must be taken into account when exiting ultra-loose policy.”They’re wary of tightening too early and squashing… a rise in inflation and growth,” said Jarrod Kerr, chief economist at Kiwibank. “They deserve to be cautious, though.”In the broader currency market, the euro lost 0.07% to $1.0565, after ending the previous quarter with a 3% fall, its worst performance in a year.Sterling was last 0.13% lower at $1.2188, having similarly slid nearly 4% against the dollar in the third quarter.The U.S. dollar index, however, stood not too far from its recent 10-month high and was last at 106.24, after clocking its best quarterly performance in a year last month thanks to persistently hawkish Federal Reserve rhetoric.”I’d rather be in dollars at the moment than euros or pounds or others,” said Kiwibank’s Kerr. “I think the dollar will find a bit more support.”The U.S. Congress late on Saturday passed a stopgap funding bill with overwhelming Democratic support in a bid to avoid the federal government’s fourth partial shutdown in a decade, a move which Pepperstone’s head of research Chris Weston said “should be welcomed by risky assets”.”We also now have a firm understanding that the U.S. Labor Department will release nonfarm payrolls data this Friday, as well as the U.S. CPI report on 12 October, which may have not been the case had the (government) shut down,” he said.”This puts the 1 November FOMC meeting back on the table as a potential venue for a further 25-basis-point rate hike.”Elsewhere, the Australian dollar fell 0.07% to $0.64305, while the kiwi edged 0.1% lower to $0.59925. More

YOKOHAMA, Japan (Reuters) – Tokyo-based start-up Tsubame Industries has developed a 4.5-metre-tall (14.8-feet), four-wheeled robot that looks like “Mobile Suit Gundam” from the wildly popular Japanese animation series, and it can yours for $3 million.Called ARCHAX after the avian dinosaur archaeopteryx, the robot has cockpit monitors that receive images from cameras hooked up to the exterior so that the pilot can manoeuvre the arms and hands with joysticks from inside its torso. The 3.5-ton robot, which will be unveiled at the Japan Mobility Show later this month, has two modes: the upright ‘robot mode’ and a ‘vehicle mode’ in which it can travel up to 10 km (6 miles) per hour.”Japan is very good at animation, games, robots and automobiles so I thought it would be great if I could create a product that compressed all these elements into one,” said Ryo Yoshida, the 25-year-old chief executive of Tsubame Industries.”I wanted to create something that says, ‘This is Japan’.”Yoshida plans to build and sell five of the machines for the well-heeled robot fan, but hopes the robot could one day be used for disaster relief or in the space industry.Yoshida became interested in manufacturing at an early age, learning how to weld at his grandfather’s ironworks and then going on to found a company that produces myoelectric prosthetic hands. He said he is eager to keep Japan’s competitive edge in manufacturing alive.”I hope to learn from previous generations and carry on the tradition,” he said. More

“We welcome the fact that the Chinese side is also committed to this in our Joint Statement, because solutions are inconceivable without China as such an important player in world politics,” German Finance Minister Christian Lindner said on Sunday, after his meeting with Chinese Vice Premier He Lifeng. Neither provided further details on the rules for the restructuring plans and the joint statement did not give specifics.A source told Reuters in April that China had been expected to drop its demand for multilateral development banks to share losses alongside other creditors in sovereign debt restructurings for poor nations.It was not immediately clear on Sunday whether that had happened. Some countries such as Germany have argued that with China being by far the largest creditor for many highly indebted countries in Africa and Asia, Beijing should make concessions to speed debt restructuring.During Sunday’s talks, Germany and China also showed their determination to expand market access opportunities between both countries. “This creates opportunities on both sides for more responsible trade and investment,” German Finance Minister Christian Lindner said on Sunday. China is willing to work with Germany to further “mutually beneficial” cooperation, and inject more “positive energy” into their partnership, the official Xinhua news agency reported on Sunday, citing He. High-ranking representatives of the countries’ central banks and supervisory authorities attended the third financial dialogue between Berlin and Beijing, as well as companies’ representatives.”It is important for me to emphasise that for the first time in the history of the Financial Dialogue we have established a Financial Roundtable with representatives of important financial institutions and private companies,” Lindner said. Lindner proposed to increase the frequency of financial dialogues between China and Germany, to have these meetings annually instead of every two years, as both countries want faster progress. “In politics, two years is a long time, but in financial matters, two years is an eternity,” Lindner said. The meeting took place in Frankfurt, as Germany want to further strengthen this city as an European hub for financial services, the finance minister said. More

With its steep red-tiled roofs, signs pointing to the Bierplatz and loudspeakers playing The Blue Danube, Taicang’s new town square feels like a version of Germany from someone’s imagination.Over three decades this city 50km from Shanghai has become a favoured place to invest for German businesses seeking growth in the world’s second-largest economy. Many are family-owned and often highly specialised Mittelstand businesses of the type that have powered German exports and built the country’s reputation for high-end manufacturing.Today, business ties between Germany and China are frayed, with Berlin warning of the need to “de-risk” exposure. In China, a heightened focus on national security has increased scrutiny of foreign companies across various sectors, adding to a sense that collaboration with Beijing is transitioning into rivalry.But more than 400 German companies clustered in Taicang show the interdependence that persists between China and Europe’s largest economy even as geopolitical tensions worsen.“Companies are not leaving Taicang as far as I know,” said Marieke Bossek, head of the German Centre for Industry and Trade in the city. “The general managers here, they continue their business not thinking about leaving.”Still, Bossek noted that some of those companies’ headquarters were hesitant over further investment. “Some companies, they hold back investment because they want to see where it’s going, others they still produce because they produce for the Chinese market,” she said. “It really depends on [the] industry”.© Maritim HotelGermany’s presence in Taicang dates back to a visit in 1993 by Hans-Jochem Steim on behalf of Kern-Liebers, a Black Forest-headquartered supplier to the auto, textile and consumer industries. Steim opened a factory and more companies followed. “I never saw a town growing so quickly . . . as Taicang,” he said on a return visit this year.Richard Zhang, who worked for Kern-Liebers and is now head of the Taicang Roundtable, a group of more than 100 largely German businesses, said the town — which as of 2019 had a population of half a million — was attractive in part because of its smaller size.The German companies here “are used to life in this kind of small town”, he said. “If you come to Taicang [and] you have a problem, you can go to the mayor,” he added. “If you go to Shanghai and you have a problem, you can wait in [a] long queue.”But Zhang admits that businesses in the city have suffered this year as China struggles to bounce back from the pandemic, with growth slowing and consumer confidence fragile.“It’s not a very good time in terms of business, in terms of overall economics,” he said. A European Chamber of Commerce report released last month noted that “many companies experienced an outflow of foreign workers” during the pandemic.A large number of German companies in the city are also part of an automotive supply chain that has come under intense scrutiny. The European Commission, the EU’s executive arm, last month announced an investigation into Chinese EV makers’ cheap imports, prompting fears of a response from Beijing.Beyond the sudden shock of more regulatory interventions, German and other foreign businesses now also face greater competition from within China.Willi Riester, the chief technology officer in China at Chiron, a family-run maker of machine tools, said that 15 years ago local competition was rare and “not really able to produce and engineer machines at our level, at that time”.Today, “we have more and more local competition,” he said. “There will in future still be a hub of German companies, but there will be more and more Chinese [companies].”Only two of Chiron’s 190 employees in Taicang are German. Riester said the company’s local R&D department — made up of Chinese staff — had gained an edge over the German headquarters in the field of electric vehicles, where China is now the world’s leading producer.Christian Sommer, head of the German Centre for Industry and Trade in Shanghai, also acknowledged that Chinese competition was “stronger and will get stronger in future”.But he argued that “Germany is very well positioned to keep the high-value chain under control to a certain extent”. Taicang had “always managed to develop new industry”, he added, pointing to opportunities in China’s aerospace sector.Whatever the geopolitical tensions at international level, Taicang’s authorities — as with other local governments in China — are still trying to attract more foreign investment. They aim to address a slump in confidence and new overseas funding that arose under Covid restrictions and has persisted months after they were brought to an end. A Taicang government delegation has been to Germany twice in the past year, according to Bossek, including a trip to Stuttgart, the headquarters of some prominent German companies including Mercedes-Benz.“I have the feeling everyone is trying to get back to the good business relationship they had before [Covid],” she said. But Sommer said it was now clear that political differences would continue between China and the west — and suggested businesses from Germany and elsewhere would have to accommodate those differences.“The system of China will not open up in a way that we westerners would like to see, in particular in regard to politics,” he said. “So now we have to simply acknowledge [how we co-operate] in a world with different systems.” More

Defense Minister Rustem Umerov said separately he had received reassurances about further military assistance in a telephone call with U.S. Defense Secretary Lloyd Austin.”Secretary Austin assured me,” he wrote in a post on X, the platform formerly known as Twitter, using flags in place of country names, that U.S. support to Ukraine “will continue” and that Ukrainian “warriors will continue to have a strong back-up on the battlefield.”A Ukrainian foreign ministry spokesperson said Kyiv was working with its American partners to ensure a new budget decision would include funds for the country, and that U.S. support was intact.Zelenskiy, in a recorded speech marking the Defenders Day holiday, did not address the vote in Congress directly, but reiterated his determination to fight to victory.No one could “shut down” Ukraine’s stability, endurance, strength and courage, he said, echoing a Ukrainian verb often used to refer to power outages caused by Russian attacks.He added that Ukraine would only stop resisting and fighting on the day of victory. “As we draw closer to it every day, we say, ‘We will fight for as long as it takes.'”U.S. President Joe Biden said on Sunday that Republicans had pledged to provide Ukraine aid through a separate vote and U.S. support could not be interrupted “under any circumstances.”Foreign Ministry spokesperson Oleg Nikolenko also sought to reassure Ukrainians about future U.S. support in comments on Facebook (NASDAQ:META), stressing that previously approved funds would be unaffected.”Support for Ukraine remains unwaveringly strong in the U.S. administration, in both parties and chambers of the U.S. Congress, and most importantly, among the American people,” he wrote. More

The final au Jibun Bank Japan manufacturing purchasing managers’ index (PMI) fell to 48.5 in September from 49.6 in August and roughly in line with the flash reading of 48.6. The index has remained below the 50.0 point threshold that separates growth from contraction for four straight months.Output in September was the lowest since June while the decline in new orders was the steepest since February, S&P Global Market Intelligence data showed.”Depressed economic conditions domestically and globally weighed heavily on the sector,” said Usamah Bhatti, economist at S&P Global Market Intelligence, which compiled the survey. New export orders have remained in contraction for 19 consecutive months, due to softer demand from mainland China and Taiwan.In addition to higher raw material, oil, freight and energy prices, the weak yen drove up input price inflation, which hit a four-month high in September, according to S&P.The yen has come under pressure in recent months, weighed by the Bank of Japan’s ultra-loose monetary policy that has inflated the costs of imported goods and squeezed manufacturers.Voluntary resignations in September outpaced filling existing vacancies, leaving the subindex employment figure unchanged from the previous month. The pessimistic headline figure followed government data published last week that showed Japanese factory output remained flat in August.Japanese manufacturers’ future output expectations rose again after hitting the weakest level in growth in six months in August, S&P said. More

TOKYO (Reuters) – Bank of Japan policymakers discussed various factors that must be taken into account when exiting ultra-loose policy, a summary of opinions at their September meeting showed on Monday.One board member said the second half of the current fiscal year, ending in March 2024, will be an “important period” in determining whether the BOJ’s price target will be achieved, the summary showed.Another member said achievement of the BOJ’s 2% inflation target seems to have “clearly come in sight,” which meant the bank may be able to determine whether the target will be met around January to March next year, the summary showed.”Even if the BOJ were to terminate its negative interest rate policy, this can be considered as continuation of monetary easing if real interest rates remain negative. It is important for the Bank to carefully provide communication on this,” one member was quoted as saying.In the future phase of an exit from ultra-loose policy, the BOJ should consider not only the treatment of yield curve control but whether it needs to continue buying assets other than Japanese government bonds (JGB), another opinion showed.At the September meeting, the BOJ maintained ultra-low interest rates and its pledge to keep supporting the economy until inflation sustainably hits its target.Under yield curve control (YCC), the BOJ guides short-term interest rates at -0.1% and the 10-year JGB yield around 0%. Aside from JGBs, the central bank also buys risky assets such as exchange-traded funds (ETF) as part of efforts to pump money into the economy and revitalise growth. More

TOKYO (Reuters) – Japan’s business sentiment improved in the three months to September, a central bank survey showed on Monday, suggesting the economy is weathering headwinds from slowing global growth for now.The headline big manufacturers’ confidence index rose to 9 in September from 5 in June, the Bank of Japan’s closely-watched “tankan” survey showed, compared with a median market forecast for a reading of 6.Big non-manufacturers’ index stood at 27, up from 23, the survey showed, against a median market forecast of 24.Big firms expect to increase capital expenditure by 13.6% in the current fiscal year ending in March 2024, matching market estimates, the survey showed.The tankan is likely to be closely scrutinised by BOJ policymakers in determining whether economic conditions are falling into place to start raising interest rates.Japan’s economy expanded an annualised 4.8% in April-June as robust exports offset weaknesses in consumption. But analysts expect a mild contraction in the July-September quarter as sluggish global demand weigh on exports.Corporate earnings and business sentiment will be key to whether wages will keep rising next year in tandem with higher inflation, and lay the groundwork for the BOJ to phase out its massive monetary stimulus. More