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Asian shares accelerate as Samsung beats profit projections





Asian stocks ascended on sixth day as Samsung Electronics Co. shares leaped following its quarterly profit surpassed predictions and traders anticipated Bank of Japan's monetary policy decision. The MSCI Asia Pacific Index climbed 0.2% to 129.23 in Tokyo. Samsung surged 3.8% on better than expected profit in the third quarter, as the weaker Korean won bolstered component revenue and dampened the effect of price reductions on Galaxy smartphones. Also, Japan's Topix index gained 0.2%, while South Korea's Kospi index added 0.4%. Chinese markets are still closed for a holiday, while Hong Kong is yet to resume trading.


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Taiwan CPI Rises Unexpectedly In September


Taiwan's consumer prices increased unexpectedly in September, figures from the Taiwan National Statistics showed Wednesday. The consumer price index rose 0.28 percent year-over-year in September, confounding economists' expectations for a 0.5 percent fall. In August, prices had fallen the same 0.5 percent. Food prices grew 5.85 percent annually in September and health costs went up by 0.31 percent. Meanwhile, costs for transport and communication declined 6.59 percent and clothing prices dropped by 0.67 percent. On a monthly basis, consumer prices climbed 0.68 percent in September. In a separate report, the statistical office announced that wholesale prices fell at a slower pace of 8.6 percent yearly in September, following a 9.4 percent decrease in August. Economists had expected a 8.8 percent decline for the month. Prices have been falling since September last year. Month-on-month, wholesale prices edged up 0.09 percent. Import prices plunged 12.2 percent in September from a year ago, while it rose 0.07 percent from the preceding month.


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Japan August Current Account Surplus Y1.653 Billion





Japan posted a current account surplus of 1.653 billion yen in August, the Ministry of Finance said on Thursday. That exceeded forecasts for a surplus of 1.226 billion yen following the 1.808 billion yen surplus in July. The trade balance came in at a deficit of 326.1 billion yen following the 108.0 billion yen shortfall in the previous month. Exports added 3.6 percent on year to 5.857 trillion yen after climbing 4.6 percent to 6.544 trillion in July. Imports slipped an annual 4.9 percent to 6.184 trillion yen after dipping 6.5 percent to 6.652 trillion yen a month earlier. The capital account reflected a shortfall of 10.1 billion yen, the ministry said, while the financial account saw a surplus of 1.938 trillion yen. The adjusted current account balance was a surplus of 1.590 trillion yen, topping expectations for 1.226 trillion yen and up from 1.321 trillion yen a month earlier.


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Global market at risk of new financial crisis, says IMF





The International Monetary Fund warned the world is at risk of a fresh financial crisis leading to global recession if governments and policymakers misgovern market stability risks. IMF's head of financial stability José Viñals said the bad scenario does not depend on severe presumptions at all, indicating the increase in risk premiums and corporate defaults among emerging economies, and decrease in appetite for riskier assets. The institution, in its bi-annual global financial stability report, imitated the effects of the pressing financial perils in emerging markets turning sour from another shock to confidence or policy mishaps. IMF projected spending growth would slide sharply in advanced and emerging economies, resulting in a shortfall in output of 2.4% by 2017. Global growth would face the likelihood of slumping below 2% for a year.


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Moody's: Philippines Rating Resilient to Slowing Growth in Asia, Outlook Stable





Moody's Investors Service says that the Philippines' Baa2 government bond rating reflects the resilience of its economy to the current headwinds buffeting neighboring countries and emerging markets as a whole. Further, the stable outlook reflects Moody's expectation that positive economic and fiscal trends will be sustained over the next 1-2 years. However, these will be balanced against the persistent weaknesses in the sovereign's credit profile. Moody's conclusions were contained in its credit analysis on the Philippines, and which examines the sovereign in four categories: economic strength, which is assessed as "high"; institutional strength "moderate (+)"; fiscal strength "moderate"; and susceptibility to event risk "low". The report constitutes an annual update to investors and is not a rating action. Moody's report notes that domestic demand has cushioned the effects of weaker exports amid slowing growth in much of the Asia Pacific region. At the same time, the external risks to the government's external liquidity and funding conditions arising from the prospective tightening by the US Federal Reserve are manageable. Internally, although political noise has increased ahead of general elections next year, Moody's does not expect the improvements in institutional strength to reverse. Reform momentum has been largely sustained, leading to improved assessments of competitiveness and governance. However, bottlenecks in fiscal expenditure continue to weigh on growth and could threaten the government's capacity to meet its goal of increasing infrastructure spending to at least 5% of GDP by 2016. Nevertheless, the government's Public Private Partnership Program has gained some traction, following a slow start at the outset of the Aquino administration. Moody's expects government debt as a share of GDP to fall for a fifth consecutive year in 2015 as fiscal deficits remain narrower than budgeted. Both the public and private sector have also relied less on cross-border sources of financing in recent years, leading to improved external debt ratios and lowering the country's susceptibility to volatile capital flows. Nevertheless, the government's revenue--as measured against GDP--is low and debt affordability remains weak when compared to investment-grade peers, although both ratios have improved in recent years, says the rating agency. The relatively high proportion of government debt denominated in foreign currency renders the Philippines susceptible to currency risks, although this has also improved recently. In addition, the country's GDP per capita is among the lowest for investment-grade countries.


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JPMorgan’s Chang Says Fed Rate Hike Would Help Emerging Markets





Joyce Chang, global head of research at JPMorgan Chase & Co., said a U.S. Fed rate hike would help emerging markets by lowering uncertainty that has kept investors from taking on risk there. Last month, official kept the rate near zero to see if slower growth in China undermines their forecast that U.S. inflation will move back to the Fed's 2% target. David Fernandez, head of fixed-income, currencies and commodities research for the Asia Pacific region at Barclays Plc, said during the panel discussion that emerging markets would benefit if the U.S. Federal Reserve increased rates.


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BoJ Minutes: Economic Recovery Remains On Track





Members of the Bank of Japan's monetary policy board said that the country's economic recovery is expected to continue, minutes from the bank's September 14 and 15 meeting revealed on Tuesday. At the meeting, decided to maintain its target of raising the monetary base at an annual pace of about JPY 80 trillion. It also kept its benchmark lending rate unchanged at 0 to 0.10 percent. "Japan's economy has continued to recover moderately, although exports and production are affected by the slowdown in emerging economies. Overseas economies -- mainly advanced economies -- have continued to grow at a moderate pace, despite the slowdown in emerging economies," the minutes said. Exports and industrial production have been more or less flat. This was a downgrade from its earlier view that exports and industrial production have been picking up. Inflation expectations appear to be rising, the minutes said, due to the effects of the decline in energy prices. "The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is about 0 percent. Inflation expectations appear to be rising on the whole from a somewhat longer-term perspective. The year-on-year rate of increase in the CPI is likely to be about 0 percent for the time being, due to the effects of the decline in energy prices," the minutes said. Downside risks include the health of commodity exporters and emerging markets, economic momentum in Europe and the pace of the economic recovery in the United States. The central bank will continue to take steps as needed to achieve its goals, the minutes said. "Quantitative and qualitative monetary easing (QQE) has been exerting its intended effects, and the Bank will continue with QQE, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate," the minutes said. Also on Tuesday, the BoJ said that overall bank lending in Japan was up 2.6 percent on year in September, coming in at 491.312 trillion yen. That was shy of forecasts for 2.7 percent, which would have been unchanged from the previous month. Excluding trusts, bank lending also was up 2.6 percent to 427.163 trillion yen. That was beneath forecasts for 2.8 percent, which would have been unchanged from the August reading. Lending from trusts gained 2.2 percent to 64.149 trillion yen, while lending from foreign banks added 0.2 percent to 1.926 trillion yen.


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Senior Fed official urges delay in raising rates





Federal Reserve Governor Lael Brainard said the US central bank should not rush in increasing interest rates as global risks are clouding the overall US outlook, indicating risk management considerations call for an opportunity to wait if the perils diminish. Even though the outlook for domestic demand is good, global factors are “weighing on net exports and inflation,” and the foreign risks seemed inclined to the downside,” Brainard added. Fed officials voted to defer a rate hike to wait for more evidences on how slowing growth in China influences the US outlook. The official refused to disclose if she favored increasing rates this year or in 2016.


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South Korea Leading Index Gains 0.2% In August - Conference Board





The leading economic index in South Korea was up 0.2 percent in August, the Conference Board said on Wednesday, following the 0.3 percent decline in July. The positive contributor was the yield of government public bonds. Negative contributors included the value of machinery orders, stock prices, private construction orders, the index of inventories to shipments and real exports FOB. The coincident index was up 0.2 percent, down from 0.4 percent in the previous month. The positive contributors were total employment, the wholesale and retail sales component, monthly cash earnings and industrial production.


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Singapore central bank eases monetary policy to bolster growth





Singapore's central bank dwindled monetary policy for the second time this year, seeking to revive growth in the country. In a statement, the Monetary Authority of Singapore said it will downsize the slope of its currency band, lowering the rate at which its dollar will advance. The central bank retained the width of the band and the center. The trade ministry said the country thwarted a technical recession in the third quarter, gaining 0.1% from the last three months, when it dropped to 2.5%. We have noticed some uncertainties which “threw some debate on the next MAS move,” said Christy Tan, Head of Markets Strategy at National Australia Bank Ltd. In January, the MAS held an unscheduled meeting and disclosed it would cut the slope of the band, while maintaining modest, gradual appreciation of the Singaporean dollar.


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