https://www.linkedin.com/feed/update/urn:li:activity:7117816636010610688/
1. BOJ mulls raising inflation outlook
The Bank of Japan (BOJ) is considering raising its forecast for consumer price inflation this year to 3% from 2.5%. The BOJ has consistently raised its inflation forecast from 1.6% at the beginning of the year to 1.8% in April and 2.5% in July. The BOJ is also considering raising its GDP growth forecast. 2Q GDP growth reached 4.8%. This is a sharp contrast with a report released in July, where the BOJ had forecast Japan's economic growth rate at 1.3 percent. So it should be rightfully discussing whether requirements necessary to end the yield curve control (YCC) policy has been met.
2. Yen performance
The strong inflation outlook is getting further strength as the tension in Middle East grows. The Yen has already lost too much ground this year, the side effect of which is already feeding into the real economy. Also, one should not forget about the US inflation number this week. A spike in US producer prices may end up with further weakening of Yen against USD. However, given the rush to safe heaven after rising geopolitical tension in Middle East, we predict the Fed’s rate hike is effectively over this year, and this should give some breathing space for Yen.
3. Compines’ results in the Q3 & Samsung’s results expectations
- The market consensus was that the Samsung’s operating profit to be around 1.8 trillion won, but it was actually 2.4 trillion won, so this was an earnings surprise. If this came from semiconductors, it would have been more positive for the stock price, but the result was also driven by better than expected earning from mobile and display. Going forward, we should monitor how semiconductor earning hold up against global macro headwinds.
https://www.linkedin.com/feed/update/urn:li:activity:7117816636010610688/
1. BOJ mulls raising inflation outlook
The Bank of Japan (BOJ) is considering raising its forecast for consumer price inflation this year to 3% from 2.5%. The BOJ has consistently raised its inflation forecast from 1.6% at the beginning of the year to 1.8% in April and 2.5% in July. The BOJ is also considering raising its GDP growth forecast. 2Q GDP growth reached 4.8%. This is a sharp contrast with a report released in July, where the BOJ had forecast Japan's economic growth rate at 1.3 percent. So it should be rightfully discussing whether requirements necessary to end the yield curve control (YCC) policy has been met.
2. Yen performance
The strong inflation outlook is getting further strength as the tension in Middle East grows. The Yen has already lost too much ground this year, the side effect of which is already feeding into the real economy. Also, one should not forget about the US inflation number this week. A spike in US producer prices may end up with further weakening of Yen against USD. However, given the rush to safe heaven after rising geopolitical tension in Middle East, we predict the Fed’s rate hike is effectively over this year, and this should give some breathing space for Yen.
3. Compines’ results in the Q3 & Samsung’s results expectations
- The market consensus was that the Samsung’s operating profit to be around 1.8 trillion won, but it was actually 2.4 trillion won, so this was an earnings surprise. If this came from semiconductors, it would have been more positive for the stock price, but the result was also driven by better than expected earning from mobile and display. Going forward, we should monitor how semiconductor earning hold up against global macro headwinds.