Economist, Centennial Asia Advisors

Jason Tan

Economist

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Macroeconomics

Three negatives for Japan’s recovery<ul>
<li>First, the Yen’s sharp rebound is likely to hurt competitiveness.</li>
<li>Second, exports remain under pressure - falling 4% y/y in Feb 16. While this was better than the 12.9% contraction in January, the data was flattered by distortions caused by the timing of the Lunar New Year.</li>
<li>Third, the initial soundings for wage increases this spring do not look promising, with the large companies sharply reducing the quantum of wage rises compared to last year - a discouraging…</li>
</ul>

Three negatives for Japan’s recovery
First, the Yen’s sharp rebound is likely to hurt competitiveness.
Second, exports remain under pressure - falling 4% y/y in Feb 16. While this was better than the 12.9% contraction in January, the data was flattered by distortions caused by the timing of the Lunar New Year.
Third, the initial soundings for wage increases this spring do not look promising, with the large companies sharply reducing the quantum of wage rises compared to last year - a discouraging…


Japan: Economy Languishing, Monetary Policy Questioned

<ul>
<li>
Slowing economy due to declining consumer confidence: GDP contracted 0.8% y/y in 4Q15, down from a 1.7% y/y expansion in 3Q15. The contraction stems largely from a slump in domestic demand, which is likely to fall further as consumer confidence declined to 40.1 in Feb 16, from 42.5 in Jan 16. </li>
<li>
Exports face headwinds: Exports fell 12.9% y/y in Jan 16, down from a 8.0% y/y fall in Dec 15, as China’s slowdown in particular, hurt exports. Imports contracted 18.0% y/y in Jan 16, unchanged from Dec 15…</li>
</ul>



Slowing economy due to declining consumer confidence: GDP contracted 0.8% y/y in 4Q15, down from a 1.7% y/y expansion in 3Q15. The contraction stems largely from a slump in domestic demand, which is likely to fall further as consumer confidence declined to 40.1 in Feb 16, from 42.5 in Jan 16. 

Exports face headwinds: Exports fell 12.9% y/y in Jan 16, down from a 8.0% y/y fall in Dec 15, as China’s slowdown in particular, hurt exports. Imports contracted 18.0% y/y in Jan 16, unchanged from Dec 15…


<ul>
<li>
GDP contracted 4% y/y in 4Q15, after rising 1.3% y/y in 3Q15. Investment growth was insufficient to offset weak consumer spending and trade. Overall GDP expanded 0.4% in 2015, a slight recovery from the 0% expansion in 2014.</li>
<li>
Industrial activity fell 6% m/m in Dec 15, a slight improvement from the 0.9% y/y fall in Nov 15. Index for services ticked up 0.1% y/y in Dec 15, down from the 1.5% y/y increase in Nov 15. Machinery orders fell 4.2% m/m in Dec 15, up from a decline of 14.4% m/m increase in…</li>
</ul>



GDP contracted 4% y/y in 4Q15, after rising 1.3% y/y in 3Q15. Investment growth was insufficient to offset weak consumer spending and trade. Overall GDP expanded 0.4% in 2015, a slight recovery from the 0% expansion in 2014.

Industrial activity fell 6% m/m in Dec 15, a slight improvement from the 0.9% y/y fall in Nov 15. Index for services ticked up 0.1% y/y in Dec 15, down from the 1.5% y/y increase in Nov 15. Machinery orders fell 4.2% m/m in Dec 15, up from a decline of 14.4% m/m increase in…


Japan: Economy Struggling to Find Solid Ground

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

The USD/JPY has plunged below its previous lows since November 2014. The next major support is the levels preceding the Oct-2014 BoJ QQE phase two policy easing (USD/JPY around 110).  The fall comes despite the short term yield advantage for the USD/JPY rising to its widest margin in many years.  The key driver is higher global market uncertainty sharply reducing yield-seeking behavior.  The effectiveness of unconventional QE/negative rate policies appears to have sharply diminished over the last year.  We may even be witnessing the undesirable unintended consequences of prolonged global QE coming home to roost and dampening market confidence.  Nevertheless it is hard to see any other path for the BoJ and ECB, suggesting both may opt for more negative rates and play the intervention card if currencies strength persist.  We note that in the most recent bout of global market uncertainty this year, intensifying since the BoJ opted for negative rates on 29-Jan, JPY has not strengthened more than gold.

The USD/JPY has plunged below its previous lows since November 2014. The next major support is the levels preceding the Oct-2014 BoJ QQE phase two policy easing (USD/JPY around 110).  The fall comes despite the short term yield advantage for the USD/JPY rising to its widest margin in many years.  The key driver is higher global market uncertainty sharply reducing yield-seeking behavior.  The effectiveness of unconventional QE/negative rate policies appears to have sharply diminished over the last year.  We may even be witnessing the undesirable unintended consequences of prolonged global QE coming home to roost and dampening market confidence.  Nevertheless it is hard to see any other path for the BoJ and ECB, suggesting both may opt for more negative rates and play the intervention card if currencies strength persist.  We note that in the most recent bout of global market uncertainty this year, intensifying since the BoJ opted for negative rates on 29-Jan, JPY has not strengthened more than gold.

AmpGFX - JPY Feeling the Unintended Consequences of QE

The Bank has cut the effective cash interest rate to -0.1% from +0.1% (-20bp).  Banks will be required to pay 0.1% on balances held in their current account that are above a certain threshold.In order not to tax banks too much, the BoJ has introduced a three-tier system with current account balances up to the first tier still earning 0.1%, zero on the second tier and -0.1% on the third tier.This third tier rate will be the most relevant to money market rates since, with excess reserve balances…

The Bank has cut the effective cash interest rate to -0.1% from +0.1% (-20bp).  Banks will be required to pay 0.1% on balances held in their current account that are above a certain threshold.In order not to tax banks too much, the BoJ has introduced a three-tier system with current account balances up to the first tier still earning 0.1%, zero on the second tier and -0.1% on the third tier.This third tier rate will be the most relevant to money market rates since, with excess reserve balances…

AmpGFX - Quick Take on the BoJ Shock Rate Cut

Japan

Maxis Nikkei 225 Index Fund is an exchange-traded fund incorporated in the USA. The Fund will seek daily investment results, before fees and expenses, that track the performance of the Nikkei 225 Index.

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Maxis Nikkei 225 Index Fund (NKY US)

Japan: Economy Languishing, Monetary Policy Questioned

Three negatives for Japan’s recovery First, the Yen’s sharp rebound is likely to hurt competitiveness. Second, exports remain under pressure -...

Jason Tan

Japan: Paucity of Good News

Slowing economy due to declining consumer confidence: GDP contracted 0.8% y/y in 4Q15, down from a 1.7% y/y expansion in 3Q15. The contraction...

Jason Tan

Japan: Economy Struggling to Find Solid Ground

GDP contracted 4% y/y in 4Q15, after rising 1.3% y/y in 3Q15. Investment growth was insufficient to offset weak consumer spending and trade....

Jason Tan

AmpGFX - JPY Feeling the Unintended Consequences of QE

The USD/JPY has plunged below its previous lows since November 2014. The next major support is the levels preceding the Oct-2014 BoJ QQE phase two...

Greg Gibbs

AmpGFX - Quick Take on the BoJ Shock Rate Cut

The Bank has cut the effective cash interest rate to -0.1% from +0.1% (-20bp). Banks will be required to pay 0.1% on balances held in their...

Greg Gibbs

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