Free Trial
US STOCKS

Late Equity Roundup: Late Rebound

EURJPY TECHS

The 144.25 Bull Trigger Remains Exposed

US EURODLR FUTURES

BLOCK, Late Sale

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI (London)
Repeats Story Initially Transmitted at 22:30 GMT Jun 18/18:30 EST Jun 18
By Hiroshi Inoue
     TOKYO (MNI) - The Bank of Japan's Tankan survey of business sentiment is
expected to be modestly lower in July as downside risks to the global economy
grow, although capital expenditure plans are likely to be revised up, but the
Bank doesn't believe those revised numbers will fully reflect intensifying
global trade tensions, MNI understands.
     The BOJ sees no need to change its baseline scenario that Japan's recovery
is continuing and will likely leave policy unchanged when its two-day policy
meeting ends Thursday.
     With many companies set to face their shareholders later in June, they are
unlikely to highlight weaknesses and revise investment plans lower going in to
those meetings, instead basing their projections on the climate in the previous
fiscal year.
     The BOJ feels revised plans put forward in June each year are normally a
better gauge of capex than the preliminary March numbers, but this year it feels
downside risks to the economy are not being fully acknowledged by major
companies, whose sentiment is being driven but their buoyant profit levels.
     Downside risks to the global economy have increased following U.S.
President Donald Trump's early May announcement of 25% tariffs on $200 billion
of Chinese goods and the subsequent retaliation from Beijing, with fears it will
stall the nascent recovery seen as Q2 got underway.
     Smaller firms will also publish their revised capex plans on July 1, with
the BOJ seeing the data as more reliable, as these firms can react to economic
trends far quicker.
     --LACK OF DATA
     As the BOJ awaits hard data to show how the economy fared in May as the
Sino-U.S. dispute kicked up a notch, the Tankan capex revisions - along with
Bank official's interactions with companies -- will give a clear view at whether
the virtuous cycle between corporate profits and spending is sustainable.
     Both industrial production and export data - key drivers of Japan's economy
- were judged by the BOJ to have bottomed out in Q1, although China's sluggish
recovery in Q2 may have hampered exports of semi-conductors and chip-making
equipment, stalling a recovery.
     Japan's May trade data will be released Wednesday, as the BOJ gathers for a
two-day policy-setting meeting. May industrial production will be released on
June 28.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.