Aurelia Butler

TOKYO (Reuters) – Japan’s exports rebounded in October, led by a pickup in chip equipment demand in China, data showed on Wednesday, suggesting that solid global demand was underpinning the country’s still fragile economic recovery.The data comes as Japanese businesses are weighing the impact of new and potentially hefty tariffs promised by U.S. President-elect Donald Trump that could upend international trade. Total (EPA:TTEF) exports rose 3.1% year-on-year in October, the data showed, more than a median market forecast for a 2.2%% increase and following a 1.7% drop in September.Exports to China rose 1.5% in October from a year earlier, while those to the United States, Japan’s largest export destination, were down 6.2%, the data showed.Imports grew 0.4% in October from a year earlier, compared with market forecasts for a 0.3% decease.That resulted in a trade deficit of 461.2 billion yen ($2.98 billion) in October, compared with the forecast of a deficit of 360.4 billion yen.While the October data was solid, Japanese exports could face pressure from potential U.S. tariffs, a key element of Trump’s pitch to voters.A proposed 10% tariff on all U.S. imports could push down Japan’s gross domestic product by 0.13%, and another 0.12% if a potential 60% levy on Chinese-made products triggers retaliatory tariffs from China, according to estimates by Shunsuke Kobayashi, chief economist at Mizuho (NYSE:MFG) Securities.Japan is seeing growing signs of a recovery in domestic demand. Last week’s GDP data for the July-September quarter showed a stronger-than-expected pickup in private consumption backed by rising wages.Bank of Japan Governor Kazuo Ueda said on Monday that the economy was progressing towards sustained wages-driven inflation, leaving open the chance of another interest rate hike as early as next month.($1 = 154.6700 yen) More

LONDON (Reuters) – Britain’s official labour market statistics may be failing to count almost 1 million people who are in work, complicating the Bank of England’s task of deciding how quickly to cut interest rates, a think tank said on Wednesday.The Resolution Foundation said the official methodology – which is being overhauled – might also be overestimating the number of workers who have dropped out of the jobs market.The BoE has cut rates by half a percentage point since August, less than the European Central Bank and the U.S. Federal Reserve, largely because of its worries about inflation pressures in the job market.”Official statistics have misrepresented what has happened in the UK labour market since the pandemic, and left policymakers in the dark by painting an overly pessimistic picture of our labour market,” Adam Corlett, principal economist at the Resolution Foundation, said.The Office for National Statistics, like agencies in other countries, has struggled to get responses to its surveys since the COVID pandemic. BoE Governor Andrew Bailey has lamented the state of the official data, saying last week it was “a substantial problem”.The Resolution Foundation said the ONS appeared to be underestimating growth in the number of people in work since 2019 by 930,000. The think tank used data from the tax office, self-employment figures and new population data to make its estimate which closely tracked official employment numbers until 2020. Since then it has diverged sharply.Corlett said the employment rate, using the foundation’s approach, probably rose to its pre-pandemic peak in 2023 before edging down in 2024 to broadly the same level as in 2019. The official data suggests the employment rate is lower than it was in 2019, which is at odds with high vacancy rates and strong wage growth, he said.Prime Minister Keir Starmer is aiming to get the employment rate up to 80%, up from the official estimate of 74.8% now.”The government faces a significant challenge in aiming to raise employment, even if the rate is higher than previously thought,” Corlett said. “But crafting good policy is made harder still if the UK does not have reliable employment statistics.” More

WASHINGTON (Reuters) -U.S. President-elect Donald Trump said on Tuesday he will nominate Wall Street CEO Howard Lutnick to lead his trade and tariff strategy as head of the Commerce Department, the agency that has become the U.S. weapon of choice against China’s tech sector.Lutnick, the head of brokerage firm Cantor Fitzgerald, will also have “additional direct responsibility” for the U.S. Trade Representative’s office, Trump said in a statement.Trump’s transition team did not respond to requests for clarity on Lutnick’s responsibilities, including whether he would also serve as U.S. Trade Representative, traditionally the top U.S. trade policy job.The USTR reports directly to the president and different committees in Congress handle oversight for the two agencies.With the appointments, Trump taps a long-time friend who backs the Republican’s vision to bring manufacturing jobs back to the U.S. and promote the adoption of cryptocurrency.Lutnick also runs brokerage BGC Group and is chairman of Newmark Group (NASDAQ:NMRK), a commercial real estate services firm, and FMX, a platform owned by some of Wall Street’s biggest banks and traders. Shares of BGC fell 2.6%.Lutnick’s appointment was a setback to two other Trump supporters who had vied for the Commerce job, former small business administrator Linda McMahon and ex-USTR Robert Lighthizer.CNN reported that McMahon, who along with Lutnick co-chaired Trump’s transition team, is expected to be named education secretary, heading a department that Trump proposed abolishing during his campaign.Lighthizer, who also had been considered an early candidate for Treasury secretary, could not be reached for comment.TRADE WEAPONS    The Commerce Department oversees a sprawling array of functions with nearly 47,000 employees, from the U.S. Census Bureau to weather forecasting, ocean navigation and investment promotion.Its trade-related functions have grown in importance in recent years. They include authority over export controls on sensitive U.S. technologies, which have put it at the center of trade conflicts with China, as well as investigating anti-dumping and anti-subsidy cases that often result in punitive tariffs to protect domestic industries.Trump used Commerce’s authority over the “Section 232” national security trade statute to underpin his 2018 tariffs on steel and aluminum and may invoke it again to impose broad global tariffs on imports, trade experts say.To rebuild the U.S. manufacturing base, Trump has vowed to impose new tariffs of at least 60% on Chinese imports and 10%-20% on goods from elsewhere – moves that economists say would upend global trade flows and raise costs.Fearing Beijing could weaponize American technology to strengthen its military, both the Trump and Biden administrations have used Commerce Department authorities aggressively to impose regulations to halt the flow of U.S. and foreign technology to China – with a special emphasis on semiconductors and the equipment used to make them.Over the past two years, the U.S. has issued sweeping export controls on advanced chips and chipmaking equipment to China, which has limited its access to cutting-edge chips for artificial intelligence and equipment needed to produce the next generation of semiconductors.TARIFF BACKERUnlike other members of Trump’s inner circle, Lutnick does not speak about China often. He is a big proponent of tariffs, especially aimed at China. According to the New York Times (NYSE:NYT), the investment banker said in a podcast interview last month: “Don’t tax our people. Make money instead. Put tariffs on China and make $400 billion.”Cantor Fitzgerald, with offices in Hong Kong, underwrote Chinese biotech firm Adlai Nortye’s Nasdaq initial public offering last year. It was the first Chinese listing since Beijing implemented new rules requiring companies in China to obtain a special filing before going public overseas.The next commerce secretary will enforce a range of rules put in place to hamper China’s development of artificial intelligence and keep some of its biggest tech firms, including Huawei Technologies and Semiconductor Manufacturing International, several steps behind their global competition in key technologies.As co-chair of Trump’s transition team, Lutnick had been seen for weeks as a possible candidate for a position in the Trump administration, including Treasury secretary.  A native of New York City’s Long Island suburbs with a background in trading and real estate, Lutnick has been one of Trump’s top Wall Street advocates, hosting fundraisers and touting his policies in the media. More

Measures of underlying inflation – the trimmed mean and weighted median – watched closely by the Reserve Bank of Australia were unaffected by the errors, the Australian Bureau of Statistics said. In a media release on its website, the ABS said it had made an error in estimating the effect of government subsidies for child care, which took effect in July 2023. As a result, in the September quarter CPI report the published child care index was 5.8%, or 9.5 index points, higher than it should have been at 163.0. Annual growth in care costs should have been 10.7%, rather than 12.1%.Child care makes up only 0.9% of the CPI basket, so the error meant the level of the overall CPI was just 0.04% higher in the quarter than it should have been.The series will be corrected in the October monthly CPI due out on Nov. 27 but will make no difference to the already published quarterly inflation rate, the ABS said.It noted the CPI was widely used for indexation purposes and revisions could create uncertainty and confusion. More

WHY IT’S IMPORTANTThe Treasury Department said that Clinton will join Yellen in a program to underscore the importance of the Community Development Financial Institutions Fund in supporting small businesses and families in minority and underserved communities. The fund was launched in 1994. Yellen became chair of Clinton’s Council of Economic Advisers in 1997.Trump has put billionaire Tesla (NASDAQ:TSLA) and SpaceX CEO Elon Musk and former presidential candidate Vivek Ramaswamy in charge of a non-government panel tasked with slashing trillions of dollars in federal spending.In his first budget plan for fiscal 2018, Trump proposed eliminating the CDFI Fund’s grant money to save $210 million, arguing that the program was no longer needed as community lenders by then had ready access to capital.A spokesperson for Trump’s transition team could not immediately be reached for comment on whether the program would again be targeted for cuts. By the end of Trump’s term in December 2020, he signed into law some $12 billion in investments into CDFI lenders to help keep small businesses afloat during the depths of the COVID-19 pandemic. BY THE NUMBERSSince its inception, the CDFI Fund has provided lenders in minority and underserved communities with $8 billion in grants, $3 billion in bond guarantees and $81 billion in tax credits to expand the capacity of some 1,400 community lenders in minority and underserved communities.Yellen announced in June that the CDFI Fund would provide an additional $100 million over the next three years to support the production of affordable housing.KEY QUOTE”As we look back over the last 30 years, it is remarkable how significant a role the CDFI Fund has played in fueling economic development in countless communities across the United States, and we look forward to continuing this important work in the years ahead,” Yellen said in a statement about the program’s anniversary in September. (This story has been corrected to show that Yellen became the Council of Economic Advisers chair in 1997, in paragraph 2) More

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(Reuters) – A look at the day ahead in Asian markets. Geopolitical jitters rippled through world markets on Tuesday but subsided as the U.S. trading session progressed, allowing for a more positive tone in Asia on Wednesday as investors gear up for Nvidia (NASDAQ:NVDA)’s earnings announcement later in the day.The local calendar on Wednesday sees the release of South Korean producer price inflation and trade figures from Japan and Taiwan. The latter is sometimes seen as a proxy for global demand as export orders include shipments from TSMC, the world’s leading contract chipmaker, and sales to China. Monetary policy decisions from China and Indonesia are the main regional events. Both central banks are expected to leave rates on hold as policymakers seek to protect their exchange rates and keep their powder dry ahead of possible protectionist trade policies from the new U.S. administration next year. The global backdrop to Wednesday’s Asian session looks relatively constructive, if tense. Investors will be on their guard after the rapid escalation in tensions between the U.S. and Russia over Ukraine. After two U.S. officials and a source familiar with the decision said on Sunday that the Biden administration allowed Ukraine to use U.S.-made weapons to strike deep into Russia, President Vladimir Putin lowered the threshold for a nuclear strike in response to a broader range of conventional attacks.This pushed global stocks into the red and sparked a spike in volatility on Tuesday – the S&P 500 VIX ‘fear index’ of implied U.S. equity volatility briefly popped up to its highest level since the Nov. 5 presidential election. But the angst subsided. The S&P 500 and Nasdaq ended in the green, volatility and Treasury yields eased, and the U.S. dollar was little changed, making for a much more favorable backdrop for Asia on Wednesday. Attention now turns to Nvidia, and analysts are hopeful the world’s largest company will deliver again. The firm is expected by Wall Street to report a 82.8% increase in revenue to $33.125 billion in the August-October period, from $18.12 billion a year ago, according LSEG data.Back in Asia, the People’s Bank of China is expected to leave benchmark lending rates unchanged on Wednesday, as last month’s rate cut squeezes banks’ profits and the yuan comes under fresh pressure with Donald Trump’s return to the White House next year.All 28 market watchers in a Reuters poll think the PBOC’s one-year and five-year loan prime rates will be left on hold at 3.10% and 3.60%, respectively.Bank Indonesia will also leave its seven-day reverse repo rate unchanged, at 6.00%, according to 25 of 34 survey respondents. Some of them revised their previous calls for a rate cut, and money markets now only expect a one-in-five chance of a cut next month. Here are key developments that could provide more direction to markets on Wednesday:- China interest rate decision- Indonesia interest rate decision- Japan trade (October) More