WORLDWIDE : HEADLINES
Largest faction of Japan’s ruling party backs Suga to replace Abe as PM: NHK
TOKYO – Japan’s top government spokesman, Yoshihide Suga, has won the backing of the largest faction of the ruling party to become its next leader, public broadcaster NHK reported on Tuesday, making him a strong front-runner to become the next premier.
Japan’s chief cabinet secretary and a long-time lieutenant of outgoing Prime Minister Shinzo Abe, Suga is widely expected to stay the policy course set out by Abe, including the “Abenomics” strategy aimed at reviving the economy and keeping it afloat amid the COVID-19 pandemic.
Suga has not publicly announced his candidacy for leader of the Liberal Democratic Party (LDP) but has indicated privately that he intends to run, a source told Reuters. Media reported he would formally announce his intention to run on Wednesday.
The party’s leader will almost certainly become prime minister because of its majority in the lower house of parliament. The new leader will replace Abe, who abruptly announced on Friday he was stepping down for health reasons.
Full coverage: REUTERS
South Korea’s exports fall for sixth month but demand seen picking up
SEOUL – South Korean exports fell for a sixth straight month in August, mainly due to fewer working days, but global demand is starting to pick up thanks to easing lockdown measures in key trading partners.
Outbound shipments tumbled 9.9% in August from a year earlier, government data showed, faster than July’s 7.1% fall but slower than an 11.5% decline tipped in a Reuters survey.
Excluding the calendar effect, per-day exports slid 3.8%, the smallest decline in seven months.
South Korea is the first major exporting economy to report monthly trade data, providing an early guide to the health of global shipments.
“Exports will continue to recover during the second half and turn positive next year,” said Chun Kyu-yeon, economist at Hana Financial Investment.
“Global demand are clearly showing recovery along with economic resumptions,” she added.
Full coverage: REUTERS
WORLDWIDE : FINANCE / ECONOMY / STOCK MARKET
Asian stocks edge lower after Wall Street dips in month-end trade
NEW YORK – Asian stocks were set to weaken on Tuesday following a softer Wall Street close while the dollar slipped as markets digested new Federal Reserve comments that suggested rates will stay low for an extended period.
Australia’s S&P/ASX 200 lost 0.89% in early trading, while Japan’s Nikkei 225 fell 0.22%, Hong Kong’s Hang Seng index futures lost 0.38%.
Wall Street declines overnight were caused by month-end portfolio rebalancing “rather than a new trend in equities,” said Rodrigo Catril, senior FX strategist at NAB Market Research in Sydney.
The Dow Jones Industrial Average and the S&P 500 ended in the red, while the Nasdaq rose solidly. The S&P gained more than 7% for the month to notch its best August since 1986 in what is traditionally a softer month for stock performance.
Full coverage: REUTERS
Oil rises in shift to risk assets as U.S. dollar slides
MELBOURNE – Oil prices rose in early trade on Tuesday, reversing overnight losses, as investors shifted to risk assets and out of the safe-haven U.S. dollar, which slid to a more than two-year low.
Brent crude LCOc1 futures climbed 27 cents, or 0.6%, to $45.55 a barrel at 0055 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 21 cents, or 0.5%, to $42.82 a barrel.
Both benchmark contracts fell around 1% on Monday on worries about oil oversupply with global demand stuck below pre-COVID levels.
The dollar =USD was last down 0.04% at 92.146 against a basket of currencies, after hitting its lowest since May 2018, continuing to fall in the wake of the U.S. Federal Reserve’s policy shift on inflation announced last week.
Full coverage: REUTERS
Dollar nurses losses on rate outlook, Aussie looks to RBA
TOKYO – The dollar languished near multi-year lows against most major currencies on Tuesday as the Federal Reserve’s new policy framework continued to fuel bets that U.S. rates will stay lower for longer than other countries.
The Australian dollar traded near a two-year high against the greenback ahead of a Reserve Bank of Australia (RBA) policy meeting later on Tuesday to gauge policymakers’ views on the economy.
The yen was hemmed into a narrow range as politicians jockeyed to choose a new premier following Prime Minister Shinzo Abe’s shock resignation last week.
The U.S. data calendar this week is full of important releases on manufacturing, durable goods, and employment, but positive results are unlikely to halt the dollar’s decline due to strong expectations that rates will remain extremely low.
“The dollar is week not only against G10 currencies but also against emerging market currencies,” said Minori Uchida, head of global market research at MUFG Bank in Tokyo.
Full coverage: REUTERS
