Connect with us

Stock Markets

Japan PM Kishida surprises with comfortable election win

By Elaine Lies

Published

on

Japan PM Kishida surprises with comfortable election win
© Reuters.

By Elaine Lies

TOKYO (Reuters) – Japanese Prime Minister Fumio Kishida on Monday prepared to tackle major policy decisions, including trying to pass an extra budget, after leading his ruling party to an unexpectedly strong election win to solidify his status in a fractious party.

Stocks surged to a one-month high on relief the Liberal Democratic Party (LDP) held onto its single-party majority in defiance of predictions – although it did lose a handful of seats, including that of party secretary-general Akira Amari.

The results are likely to embolden Kishida, only in power a month and with little yet to show in terms of policy successes, allowing him to put his stamp on the office ahead of an upper house election next year.

Kishida, a soft-spoken former banker who has yet to stamp his mark on the premiership, has hewed to traditional policies of the party’s right wing, pushing to increase military spending to counter a more assertive China.

He has also promised to address wealth inequality, touting a “new capitalism” as the world’s third-largest economy struggles to rebound from the coronavirus pandemic.

“The overall trend is in favour of stability. The LDP cleared the hurdles it absolutely had to,” said Tobias Harris, senior fellow at the Center for American Progress.

“We’ll see a lot of stimulus,” he said.

Japanese shares jumped on Monday, with the index hitting a one-month high on hopes for a stable government and more government spending.

STABLE MAJORITY

While initial exit polls on Sunday suggested the LDP would have to rely on its junior coalition partner, Komeito, to keep a majority, the conservative party – in power for all but a few years since its founding in 1955 – instead won a solid majority on its own.

In the end, the LDP claimed 261 seats against the 276 it held before the election – an absolute stable majority that will give it control of parliamentary committees and ease passage of legislation, including key budget proposals.

A poorer showing would have heightened expectations that Kishida could follow predecessor Yoshihide Suga in becoming another short-term premier in the wake of Shinzo Abe, Japan’s longest-serving premier, who stepped down last year due to ill health.

The party did take some notable hits, including the loss by Amari, in his single-seat district, and a former economy minister and the leader of one the party’s factions, Nobuteru Ishihara, who lost to an opposition candidate in a western Tokyo district.

Analysts said the fall of such stalwarts, in contrast to the massive victories of younger lawmakers such as Taro Kono and Shinjiro Koizumi, could potentially signal a change of generations in the LDP.

“If we’re in a post-COVID and post-Abe (era), then the question is what are the new policy agendas that Japan has to face, not just in the next year or two but long-term,” said Kenneth McElwain, professor of political science, University of Tokyo.

Media reported Amari would resign his party post but there was no immediate news on a possible successor, which could have an impact on policy, particularly Kishida’s goal of trying to pull together an extra budget this year, in what would be a tight schedule.

Stock Market

The Bank of England buys government bonds instead of a planned sale

Published

on

UK government bonds Bank of England

The Bank of England buys government bonds. It was decided to suspend the start of the previously announced government bond sales program and instead will start buying government bonds amid a sharp rise in their yields.

“UK government bonds Bank of England will start to buy from September 28. The purpose of these purchases is to return to normal market conditions. Purchases will be made in any scale, which is necessary to achieve the goal,” – said in a statement of the British Central Bank.

The yield on U.K. 10-year government bonds reached 4.611 percent in Wednesday’s trading, recording the highest increase since 1957 since the beginning of the month. After the Bank of England’s announcement, yields fell about 45 basis points to 4.07%. The news also caused yields on other government bonds around the world to fall.

The surge in yields on British government debt is caused by the previously announced large-scale tax cuts, which, according to British authorities, will increase the budget deficit in the current fiscal year by more than 70 billion pounds.

Earlier, we reported that Goldman lowered its recommendation on global equities for the next 3 months to “below market”.

Continue Reading

Stock Market

Goldman Sachs stock forecasts: Goldman has downgraded its recommendation for global stocks for the next 3 months to “below market”

Published

on

Goldman Sachs stock forecasts

A new Goldman Sachs stock forecast has emerged. Analysts at U.S. bank Goldman Sachs Group Inc. (NYSE:GS) have downgraded their recommendation for global stocks for the next three months to “below market” and maintained an “above market” recommendation for cash amid recessionary risks, Bloomberg writes.

“Current stock valuations may not fully reflect the risks involved, and there’s a chance they will drop even further before they bottom out. Also have a disappointing Goldman Sachs economic forecast,” the Goldman strategist team, led by Christian Muller-Glissmann, wrote.

BlackRock, the world’s largest company by assets under management, advises investors to “divest from most stocks.”

Experts at Morgan Stanley (NYSE:MS) and JPMorgan Asset Management previously laid out similar concerns after the world’s top central banks signaled their firm’s resolve to fight inflation, sending global stocks plunging in the past few days.

Goldman analysts last week sharply lowered their forecast for the value of the U.S. S&P 500 stock index for the end of this year, to 3,600 points from the previously expected 4,300 points. The day before, the indicator finished trading at 3655 points.

Earlier, we reported that European stock markets are trading contradictoryly.

Continue Reading

Stock Market

European stock markets are trading contradictory today

Published

on

biggest european stock markets

During today’s trading the major European stock markets do not show unified dynamics. The composite index of the largest companies in the region, Stoxx Europe 600, decreased by 0.18% to 389.68 points.

European stock markets trading today

British stock index FTSE 100 was down 0.06%, while German DAX gained 0.19% and French CAC 40 gained 0.16%. Italian FTSE MIB rose by 1%. Spanish IBEX 35 decreased by 0.34%.

The British financial company Virgin Money UK PLC was among the leaders of the fall in the components of the Stoxx Europe 600 index, falling by 6.7%.

Shares of the Swiss manufacturer of heating and ventilation systems rose 8.4% as Berenberg’s experts improved their recommendations on the company’s securities and raised their price target.

Concerns about the state of the global economy are growing amid persistently high inflation and aggressive measures by major central banks to curb it, writes CNBC.

The elections in Italy are also in the spotlight. The Italian Democratic Party acknowledged defeat in early parliamentary elections that took place on Sunday, reported the media.

The market is also pressed by continuing geopolitical tensions with the ongoing “referendums” in several regions of Ukraine.

Meanwhile, the level of business confidence in the German economy in September fell to 84.3 points from 88.6 points in August, according to a report by the research organization IFO.

Earlier we reported that the yield of British government bonds rose to a 14-year high.

Continue Reading

Trending

©2021-2022 Letizo All Rights Reserved