Yutaka Harada speech to business leaders

Last week Yutaka Harada, a member of the policy board, met with business leaders in Nagano. In his speech Harada discussed how the Japanese economy went from leading in growth when compared to other advanced economies up until 1990, to slowing down and facing deflation up to and beyond the introduction of QQE in 2013. Harada went on to discuss the impacts QQE and negative interest rates have had on the Japanese economy as well as the impacts the flattening yield curve has had on financial institution profits. He also confirmed that the BOJ should act without hesitation should any situation arise that could prevent Japan from achieving their year on year inflation target of 2% for example, a significant change in the state of the global economy. Read the full speech here

Chinese Data
On Thursday China reported a decline in their trade balance, exports (YOY) and imports (YOY) which resulted in a drop in the Nikkei and Yen strength. On Friday the Chinese consumer price index (CPI) for August 2016 went up by 1.3 percent year-on-year. The prices grew by 1.4 percent in cities and 1.0 percent in rural areas. The food prices went up by 1.3 percent, and the non-food prices increased 1.4 percent. The prices of consumer goods went up by 0.9 percent and the prices of services grew by 2.1 percent. This helped the Nikkei recover it’s losses resulting in Yen weakness.

Upcoming Japan data releases
Monday: Industrial Production (MoM) (Aug), BoJ Governor Kuroda Speaks
Friday: BoJ Governor Kuroda Speaks

Upcoming Chinese data releases
Wednesday: Fixed Asset Investment (YoY) (Sep), GDP (QoQ) (Q3), GDP (YoY) (Q3), Industrial Production (YoY) (Sep)

Technical Overview 10 Oct – 14 Oct 2016

Nikkei Daily

Price came off MM2 at the start of the month with a target of MM4. Price found resistance at MR1 and has failed to close above 17000. Chines data saw price fall though buyers entered at MPP and drove price back up to the top of the range.

Nikkei H4

Price came off WPP at the start of last week with a target of WR2 though was unable to break MR1. Lackluster import and export Chinese data saw price fall to WM2 where bulls entered and pushed price back up to the top of the range. Some profit taking on Friday saw price close below the top of the range with immediate support identified in the fib of the swing low last Thursday and swing high last Friday.

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