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Q1. Minutes of the Bank of Japan meeting.
November inflation rate decreased to 2.8% from 3.3% year on year. Core inflation fell from 2.9% to 2.5%, this is the lowest level in 16 months. Even consumer prices fell by 0.1% on a monthly basis.
There was some hope that BOJ will be able to lift Yield Curve Control policy, but the incoming data suggest BOJ will now act more cautiously. We expect the central bank to move its monetary policy stance gradually. Before the data came in, some investors expected Yen’s further strength, but we expect Japanese Yen to stay within a boxed range until the 1st quarter of 2024. We do not expect BOJ to change policy overnight.
Q2. video game stocks shine.
Last week, China regulators released a new regulation over how much money and time adults can spend playing online games. This announcement sent shockwaves followed by sharp decline in stock prices.
The price recovered some ground today following Beijing's easing of rhetoric, but as investors were having some optimism over China market, this action sparked worries about China's policy uncertainty once more.
If you compare China versus the US, MSCI China index is down by double digit, more than 17%, while the major stock index of the US is up more than 20%. More and more investors will now apply steeper discount when investing in China. The market is recuperating for now, but policy uncertainties will harm investor confidence on China market for the longer term.
Q3. Chinese industrial profit
Figures released suggests, the largest industrial companies in China saw a 29.5 percent increase in earnings in November year on year.
This represents a 4.4 percent year-over-year decline. China policy makers has been supporting the market through many policies since the 3Q of this year. Some of that is now being reflected in the economic data. Whether this trend of recovery will last is the question many investors are asking. But although macro-data can recover, concerns over policy uncertainties will persist. This means capital market will likely face a tough headwind going forward. Beijing needs to send a clear and consistent signal if it truly wants international investors to come back to China.
Post | Feed | LinkedIn
https://www.linkedin.com/feed/update/urn:li:activity:7145785801996386304/?originTrackingId=H5IF2LUDSg631uFqh6eK%2FQ%3D%3D
Q1. Minutes of the Bank of Japan meeting.
November inflation rate decreased to 2.8% from 3.3% year on year. Core inflation fell from 2.9% to 2.5%, this is the lowest level in 16 months. Even consumer prices fell by 0.1% on a monthly basis.
There was some hope that BOJ will be able to lift Yield Curve Control policy, but the incoming data suggest BOJ will now act more cautiously. We expect the central bank to move its monetary policy stance gradually. Before the data came in, some investors expected Yen’s further strength, but we expect Japanese Yen to stay within a boxed range until the 1st quarter of 2024. We do not expect BOJ to change policy overnight.
Q2. video game stocks shine.
Last week, China regulators released a new regulation over how much money and time adults can spend playing online games. This announcement sent shockwaves followed by sharp decline in stock prices.
The price recovered some ground today following Beijing's easing of rhetoric, but as investors were having some optimism over China market, this action sparked worries about China's policy uncertainty once more.
If you compare China versus the US, MSCI China index is down by double digit, more than 17%, while the major stock index of the US is up more than 20%. More and more investors will now apply steeper discount when investing in China. The market is recuperating for now, but policy uncertainties will harm investor confidence on China market for the longer term.
Q3. Chinese industrial profit
Figures released suggests, the largest industrial companies in China saw a 29.5 percent increase in earnings in November year on year.
This represents a 4.4 percent year-over-year decline. China policy makers has been supporting the market through many policies since the 3Q of this year. Some of that is now being reflected in the economic data. Whether this trend of recovery will last is the question many investors are asking. But although macro-data can recover, concerns over policy uncertainties will persist. This means capital market will likely face a tough headwind going forward. Beijing needs to send a clear and consistent signal if it truly wants international investors to come back to China.