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March 5, 2013
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  Top Stories 
  • Nominees for Bank of Japan emphasize major role in deflation fight
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    Haruhiko Kuroda, nominated to head the Bank of Japan, gave strong signals that he would vigorously pursue inflationary policies at the central bank, saying he would "do everything possible" to pull the economy out of deflationary mode. Both Kuroda and Kikuo Iwata, nominee for a deputy governorship at the bank who spoke separately at a monetary conference, indicated the Bank of Japan bears primary responsibility for raising inflation expectations. Meanwhile, the latest economic indicators suggest that an inflationary outlook is already beginning to take hold. The Wall Street Journal (3/4) , The Wall Street Journal (3/4) LinkedInFacebookTwitterEmail this Story

  • Markets not reflecting U.S., European risks, Roubini says
    Risks to the global economy should not be discounted even though they are not registering in world stock markets, which have been rallying in recent weeks, warned New York University's Nouriel Roubini. The economist notes particular danger in the eurozone's determination to proceed with economy-hobbling austerity measures. Across the Atlantic, meanwhile, "markets are underestimating how much the sequester and the gridlock in the United States could have negative effects on the economy and eventually on the market," Roubini said. Bloomberg Businessweek (3/4) LinkedInFacebookTwitterEmail this Story

  • China's nonmanufacturing sector slows
    Shortly after reporting a disappointing manufacturing index for February, China posted a 54.5 purchasing managers' index for the nonmanufacturing sector, down 1.7 points from January. The figure remains above the 50 break-even level but represents declines for overall new orders as well as new export orders, the China Federation of Logistics and Purchasing said. China Daily (Beijing) (3/4) LinkedInFacebookTwitterEmail this Story
  Reader Survey 
  • What will the next major financial market mover be (i.e., effects lasting for 1 year+)?
A macroeconomic event, like a sovereign debt crisis or inflation
A central bank action, like more QE or no more QE
A change in corporate profits (up or down)
An announced technological revolution, like a new computing technology or biotechnology
A political event, like a U.S. government shutdown or a shift in the EU's makeup
A geopolitical event, such as an incident in the South China Sea or in the Middle East
A random, unforeseeable event

  Market Activities 
    European stocks ended marginally lower Monday, with China's move to tamp down its property market and continuing budget skirmishes in the U.S. weighing on sentiment. The Stoxx Europe 600 edged down 0.04% to 288.89. In the U.S., however, investors breathed a sigh of relief as budget sequestration took hold and the economy appeared to remain intact. The S&P 500 rose 0.46% to close at 1,525.20. Here is a continuously updated list of global stock indexes. The Wall Street Journal (3/5) , MarketWatch (3/4) , CNNMoney (3/4) LinkedInFacebookTwitterEmail this Story
  • Japanese shares gain as other Asian markets slide
    China's move to cool the nation's property market was felt across Asian markets Monday, with the exception of Japan, where spirits were lifted by further strong indications of anti-deflation policies. The Nikkei rose 0.40% to 11,652.29 while the Hang Seng fell 1.50% to 22,537.81, the Kospi lost 0.66% to 2,013.15 and the S&P/ASX slid 0.55% to 5,058.10. Bloomberg (3/4) LinkedInFacebookTwitterEmail this Story
  • New real estate policies pull plug on Chinese property shares
    China's crackdown on the country's overheating real estate market bore fruit Monday as property stocks took a hit. The Shanghai Stock Exchange Property Index saw its biggest drop since 2008, plunging 9.3% for the day. "The measures are much stronger than expected and will have more longer-term implications on the market," said Zhao Zhenyi, a Shanghai-based property analyst at Industrial Securities. Bloomberg (3/4) LinkedInFacebookTwitterEmail this Story
  Economic Trends & Outlook 
  • Moody's skeptical of Indian economic outlook
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    The Indian government's projections in its latest budget are optimistic at best, Moody's estimates amid suspicions that popular demand will eventually lead to more stimulus that could undermine the country's fiscal strategy. Moody's notes in particular that there are few signs of the government's projected economic recovery. Rating services all currently rate Indian sovereign credit just above junk grade. The Wall Street Journal (3/4) LinkedInFacebookTwitterEmail this Story

  • China central bank not yet worried about inflation
    The People's Bank of China sees little threat from inflation this year, which may pick up a bit from last year's 2.6% but is likely to remain manageable, said bank Vice Governor Yi Gang. Analysts, however, haven't been quite so sanguine, noting that monetary easing in major world economies and rising costs in China pose an upside risk. Caijing Magazine online (3/4) LinkedInFacebookTwitterEmail this Story
  • South Korea tops Italy, ascends to 8th-largest trading nation
    Despite a 1.1% decline in imports and exports last year, South Korea surpassed Italy for the first time to emerge as the world's eighth-largest trading nation, according to World Trade Organization figures. The 2012 ranking is just the latest step for South Korea, which ranked 13th in 2000, 11th in 2007, 10th in 2009 and ninth in 2010. The Korea Herald (Seoul) (3/4) LinkedInFacebookTwitterEmail this Story
  • South Korean inflation eases, but outlook is for price surge
    South Korean consumer prices were up 1.4% in February from a year before, easing from a 1.5% increase in January. The central bank now is considered to have additional room for easing if needed, but the outlook might be less rosy. "Price pressure is set to rise on the back of both stronger demand and supply constraints. This will gradually create a tightening bias for the Bank of Korea, with headline CPI likely to rise sharply around midyear," said Ronald Man, a Hong Kong-based analyst at HSBC Holdings. Bloomberg Businessweek (3/3) LinkedInFacebookTwitterEmail this Story
  • ASEAN economies may not be the next BRIC after all
    After an inglorious decline for the once-hailed BRIC economies, some analysts have taken up the banner for nations as the new BRIC. But many of the problems that beset Brazil, Russia, India and China are duplicated in their Association of Southeast Asian Nations counterparts, writes Aavishkaar Venture Fund co-founder V. Anantha Nageswaran, and "those who call for Asean's rise to pre-eminence have missed the asset price boom already." Wall Street Journal (India) (3/4) LinkedInFacebookTwitterEmail this Story
  Capital Markets & Financial Products 
  • Asian funds of hedge funds bled assets in 2012 as performance ebbed
    Disappointing performance is believed to be behind a sharp 50% drop in assets invested in Asian funds of hedge funds in the past year, as documented by Preqin. "Investors who are looking to maintain their current allocation to fund of hedge funds are also shifting away from smaller boutique Asia-Pacific-based FoHF managers and are instead looking to invest with more established North American managers that still offer exposure to Asia-Pacific-based hedge funds," said Ross Ford, manager of hedge fund profiles for Preqin. (3/4) LinkedInFacebookTwitterEmail this Story
  • Singapore Exchange may soon see Japanese IPOs
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    Plans by Japan's Tosei Corp. to launch a secondary offering on the Singapore Exchange may herald renewed interest by Japanese companies in introducing IPOs on the market, industry players say. "In terms of Japanese companies, Tosei's the first in a long while, so this listing is a really good test bed for Japanese companies who want to list in Singapore," observed Ernst & Young country manager Max Loh. The Business Times (Singapore) (3/4) LinkedInFacebookTwitterEmail this Story

  • Japan re-emerges as top foreign holder of U.S. securities
    With US$1.8 trillion in holdings of U.S. securities as of last June, Japan topped China as the world's leading foreign holder, according to figures from the U.S. Treasury Department. At that time, Japan held US$314 billion in U.S. equities, US$63 billion in short-term debt securities, US$200 billion in asset-backed securities and US$259 billion in long-term debt securities. Yomiuri Shimbun (Japan)/Jiji Press (3/2) LinkedInFacebookTwitterEmail this Story
  Industry & Regulatory Update 
  • Taiwan's FSITC is penalized over stock manipulations
    Citing stock manipulations by three former fund managers, Taiwan's Financial Supervisory Commission ordered state-run First Securities Investment Trust Co. to provide a plan for compensating harmed investors and suspended it from launching new funds. "FSITC should also examine its internal control mechanism in two weeks and file a report on how it plans to improve," the commission said. The Taipei Times (Taiwan) (3/5) LinkedInFacebookTwitterEmail this Story
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