The Star Online: Business
The Star Online: Business |
- New Zealand commodity prices fall further
- Japan institutionals' interest in gold rising
- Japanese companies turn optimistic
| New Zealand commodity prices fall further Posted: 02 Oct 2011 05:48 PM PDT WELLINGTON, Oct 3 (Reuters) Prices for New Zealand's main commodity exports fell for a fourth successive month in September, but a softer currency improved local returns for the first time in sixth months, a survey showed on Monday. The ANZ Bank's commodity price index dropped 1.3 percent on the previous month, following a 1.4 percent fall in August. Overall, prices have fallen 4 percent since peaking in May, but remain 17 percent higher than a year ago. Translated into New Zealand dollar earnings, the commodity index rose 0.4 percent, after a slight fall the month before. It was the first rise since March, leaving NZ dollar returns 5.1 percent higher than a year ago. The kiwi traded wildly during the month, tumbling from an open of more than $0.8500, before being battered by global turbulence and ratings downgrades. It finished the month down 11 percent. The index includes commodities accounting for around 60 percent of the agricultural economy's NZ$46 billion ($35 billion) annual export earnings. Ten commodity groups fell in price, including fruit, dairy produce, aluminium and logs. Three groups rose, and four were steady. New Zealand's terms of trade reached a 37 year high in the second quarter on surging export prices, but data last week showed the first monthly deficit in eight months in August and a narrowing annual trade surplus. ($1=NZ$1.31) |
| Japan institutionals' interest in gold rising Posted: 02 Oct 2011 05:46 PM PDT TOKYO, Oct 3 (Reuters) Japanese institutional investors are showing increased interest in gold, as volatile financial markets since the Lehman crisis have spurred them to rethink their asset allocation, the World Gold Council's top Japan official said. Recent sharp swings in the gold price , which surged to a record high above $1,900 an ounce in early September but then fell nearly $400 over the next three weeks, should not undermine the value of the metal in an investment portfolio, Takahiro Morita told Reuters in an interview. "The purpose of investing in gold is for its effectiveness in diversification and against various risks, and so over the long span it is very effective to invest regardless of the price level," said Morita, who became director of the World Gold Council's Japan office on Oct. 1. "The nature specific to gold that it moves differently from other asset types and does not carry credit risk won't necessarily change in the future. There are no reasons to believe that these features would be lost in the future." A downgrade in the U.S. sovereign debt rating amid a deteriorating outlook for the world's largest economy, as well as deepening concerns that the spreading European debt crisis could drag on the global economy, triggered the latest rush to buy gold. Intensifying fears about Europe's debt problems and financial stability prompted investors to sell assets across the board, however, weighing down gold prices in late September. But the environment supporting the gold market looks set to stay in place for now, Morita said, with the dollar playing less of a role as a core global currency, some sovereign assets perceived as less safe, and some investors reassessing reserve management. "The market volatility since the Lehman crisis has made many institutionals rethink their asset allocation, and their interest in gold is rising," he said. In contrast to Japanese retail investors, who have actively sold gold when it rallies and bought the metal when it falls, institutionals have been slow to take on commodities in general. The World Gold Council's Tokyo office issued its first report for Japanese institutional investors in midSeptember, including data on how gold has performed in yen terms against other asset classes and the metal's volatility compared with other asset types over the past decade. Morita joined the World Gold Council's Tokyo office in September 2010 and previously served as a managing director and corporate ratings department head at ratings agency Moody's Investors Service in Tokyo. |
| Japanese companies turn optimistic Posted: 02 Oct 2011 05:44 PM PDT TOKYO, Oct 3 (Reuters) Japanese business sentiment improved in the third quarter as manufacturing supply chains recovered and the economy avoided disruptive power outages following a large earthquake in March, but a rising yen and Europe's debt crisis threaten the outlook. KEY POINTS: The headline index for big manufacturers' sentiment improved to plus 2 in September from minus 9 in June, the Bank of Japan tankan survey showed on Monday. The median estimate was for plus 2. The index for December 2011 was seen at plus 4, showing firms expect conditions to improve further. Economists' median estimate was for plus 3. Big firms plan to raise capital spending, a key driver of the economy, by 3.0 percent in the fiscal year to March 2012, against the median forecast for a 4.2 percent increase. Big manufacturers expect the dollar to average 81.15 yen in the fiscal year to March 2012, which is the strongest expected yen level since comparable data became available in 1996. The index for big automakers' sentiment jumped 65 points to plus 13 in September from the previous survey while the small automakers' index rose 68 points to plus 20, both marking the biggest increase since comparable data became available in 1992. COMMENTARY: YUTAKA SHIRAKI, SENIOR STRATEGIST, MITSUBISHI UFJ MORGAN STANLEY SECURITIES, TOKYO "The tankan results were good, in line with expectations, and the most positive sign is that large manufacturers said they expected conditions to improve further. "The results show that the domestic economy is holding up even with the strong yen, and the biggest concerns are external, not internal, such as the impact of Europe's debt problems on global growth." HIDEO KUMANO, EXECUTIVE CHIEF ECONOMIST, DAIICHI LIFE RESEARCH INSTITUTE, JAPAN "The headline figures indicate a moderate recovery at manufacturers. But if you look carefully, you can see the heavy burden of a higher yen, and their profits are under pressure. "Additional easing measures will be taken if the dollar falls below, say, 75 yen. Today's data reinforces views that the government and the Bank of Japan will take coordinated steps to tackle any excessive appreciation of the yen." TAKESHI MINAMI, CHIEF ECONOMIST, NORINCHUKIN RESEARCH INSTITUTE, TOKYO "The tankan confirmed companies are cautious about the outlook as evidenced by a sharp downward revision in capital spending plans by nonmanufacturers. But it also shows the economy's recovery is intact, as seen in improvements in employment and capacity utilisation readings. "Given big manufacturers are optimistic about three months ahead, the tankan is unlikely to prompt the BOJ to take additional easing steps this week. "The BOJ is likely to forecast in its semiannual report (at the end of this month) that consumer price growth will stay below 1 percent for the next two to three years, which is in line with the market consensus. This will affirm expectations for easy policy for the years to come." |
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