Bank of Japan board discussed factors for exiting ultra-loose policy, September meeting summary shows
The Bank of Japan’s policymakers evaluated a number of conditions that must be met before ending the central bank’s ultra-loose policy during its September meeting.
“Sustainable and stable achievement of the price stability target, accompanied by wage increases, has not yet come in sight, and thus the Bank needs to patiently continue with monetary easing under yield curve control,” the BOJ’s summary of opinions stated.
One board member highlighted how the second half of the fiscal year ending March 2024 will mark an “important period” for determining whether the price stability target will be achieved.
“Even if the Bank were to terminate its negative interest rate policy, this can be considered as continuation of monetary easing if real interest rates remain negative. It is important for the Bank to carefully provide communication on this,” another board member was quoted saying.
In September, Japan’s central bank held its stance and left rates unchanged, on the back of “extremely high uncertainties” on the growth outlook domestically and globally.
—Lee Ying Shan
Japan manufacturing sentiment improves, Tankan index shows
Sentiment of Japan’s big manufacturers improved to a score of 9 in the third quarter, up from 5 in the previous three months, the closely-watched central bank tankan survey showed.
The figure beats Reuters’ forecasts for a reading of 6.
The survey also reflected that large firms are looking to increase capital expenditure by 13.6% for the current fiscal year ending March 2024.
—Lee Ying Shan
CNBC Pro: Veteran EM investor Mark Mobius reveals the 2 tech giants that are key to any portfolio
Veteran emerging markets investor Mark Mobius has named two tech giants as key stocks in any portfolio investing in developing economies.
Mobius said the Chinese technology giants “could be the foundation of any portfolio” despite recent volatility. They are “still making good profits,” he said, despite the “incredible” decline in their share prices over the past three years.
— Ganesh Rao
China reports factory activity expansion in September
China’s factory activity in September expanded for the first time April, data from the National Bureau of Statistics showed on Saturday.
China’s PMI climbed to 50.2 in September from 49.7 in the previous month, beating Reuters’ expectations of 50.0.
A reading above the 50-point level marks an expansion, while a figure below the 50-mark indicates a contraction. China’s non-manufacturing PMI also inched up to 51.7 from a previous reading of 51.
Similarly, a private-sector survey reflected an expansion in China’s factory activity, albeit at a slowed pace.
The Caixin/S&P Global manufacturing PMI dipped to 50.6 in September from 51.0., the survey showed on Sunday, missing forecasts of 51.2.
“Manufacturing conditions across China improved slightly for the second consecutive month in September,” the press release stated.
“However, confidence regarding the year-ahead remained relatively subdued, which in turn contributed to a drop in employment at Chinese manufacturing plants,” the report added.
—Lee Ying Shan
CNBC Pro: Goldman Sachs names 6 global stocks to play the energy transition — giving one over 90% upside
Goldman Sachs is bullish on one sector it describes as the “largest source of renewable energy in the world.”
It named several global stocks that are slated to benefit from the global push toward sustainability and the renewable energy transition.
— Amala Balakrishner
Lawmakers avoiding shutdown should be good for markets, financial group partner says
Lawmakers were able to pass a continuing resolution and evade a government shutdown on Saturday. The bill keeps the government operating for 45 more days, allowing more time for legislators to finalize funding proposals.
This development should be welcome news for the market and offer a boost coming off a tough week, according to Jamie Cox, managing partner at Harris Financial.
“There’ll be a lot of unwinding of government shutdown selling from last week, which will be good,” he said.
— Alex Harring
Fed’s preferred inflation gauge shows price increases eased in August
A key inflation reading showed price increases slowing in August.
The core PCE index rose 0.1% month over month in August, and 3.9% year over year, the Bureau of Economic Analysis said Friday.
Economists surveyed by Dow Jones were expecting core increases of 0.2% and 3.9%.
Both readings were lower than July, when the core readings were 0.2% and 4.3%. The PCE is the Federal Reserve’s preferred inflation dataset.
— Jesse Pound
Aluminum prices hit multi-month high as winning month nears end
Aluminum prices hit a high not seen in multiple months in the final trading day of what’s shaping up to be the best month since January.
The metal traded as high as $2,334 per metric tonne. That’s the most expensive since May 9, when it reached $2,338.50.
Aluminum is up about 4% week to date. If that holds, it would mark its fifth winning week out of the last six.
Those gains have pushed the metal up about 5.7% on the month, with just Friday’s session left. That performance marks the best since January, when aluminum gained around 11.2%.
— Alex Harring, Gina Francolla