Tokyo yesterday sank as Japanese Prime Minister Shinzo Abe’s political future hangs in the balance over a cronyism scandal, while Asian traders moved cautiously before a crucial US Federal Reserve meeting.
After fluctuating last week on worries about a possible global trade war and US President Donald Trump’s removal of moderate voices in his cabinet, regional equities were struggling to maintain a run of gains.
Investors were also keeping an eye on Washington after another outburst by Trump against a probe by US Special Counsel Robert Mueller into claims of Russian meddling and collusion with Trump’s campaign in the 2016 presidential election.
There are fears in some quarters that Trump is planning to fire Mueller.
If he did, “all heck could break loose on markets,” AxiTrader chief market strategist Greg McKenna said.
In Japan, the Nikkei finished 0.9 percent lower as Abe and Japanese Minister of Finance Taro Aso are embroiled a scandal over the cut-price sale of government land for an elementary school to a supporter of Abe.
The Japanese Ministry of Finance has admitted altering documents related to the deal.
A weekend poll by the Asahi Shimbun found that public support had nosedived 13 percentage points from a month ago to 31 percent, the lowest since Abe took power in December 2012.
Abe has denied any wrongdoing.
Hong Kong was up 0.2 percent in the afternoon, but CK Hutchison Holdings was down 1.5 percent, after the territory’s richest person and investment tycoon Li Ka-shing (李嘉誠) on Friday last week announced that he would step down as chairman.
Elsewhere, Sydney added 0.2 percent, but Singapore fell 0.1 percent, Seoul dropped 0.8 percent and Manila lost 0.8 percent. There were also losses in Bangkok, Jakarta and Wellington.
The key event this week is the Fed’s next policy meeting, which will be the first for new Fed Chairman Jerome Powell. The bank is expected to raise interest rates again, but Powell’s remarks will be closely followed for clues about future increases, with some predicting three more this year in light of an improving economy.
“Markets are struggling to stay positive given the torrent of potential headwinds,” OANDA Asia-Pacific trading head Stephen Innes said. “Whether it’s the White House’s revolving door, an escalation of a global trade war or Japan’s brewing political scandal, markets are grappling to find an equilibrium.”
However, “when you toss in the prospect of a more hawkish Fed, it’s not surprising risk sentiment continues to trade poorly,” Innes said.
From India to China to the US, automakers cannot make vehicles — not that no one wants any, but because a more than US$450 billion industry for semiconductors got blindsided. How did both sides end up here? Over the past two weeks, automakers across the world have bemoaned the shortage of chips. Germany’s Audi, owned by Volkswagen AG, would delay making some of its high-end vehicles because of what chief executive officer Markus Duesmann called a “massive” shortfall in an interview with the Financial Times. The firm has furloughed more than 10,000 workers and reined in production. That is a further blow
Answering to a reported request by Germany to help address a chip shortage in its auto industry, the Ministry of Economic Affairs (MOEA) yesterday said that it was in talks with domestic chip suppliers. Foreign media over the weekend reported that German Minister of Economic Affairs Peter Altmaier had sent a request to Taipei to ask Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to cooperate more closely with German automakers to provide microchips and sensors, to bridge a shortage that has emerged over the past few months. The MOEA said that it had not yet received the request and could therefore not elaborate
FOCUS ON FOUNDRIES: An analyst said that some investors would be disappointed because they were expecting a larger announcement of a partnership with TSMC Intel Corp’s incoming chief executive officer Pat Gelsinger on Thursday pledged to regain the company’s lead in chip manufacturing, countering growing calls from some investors to shed that part of its business. “I am confident that the majority of our 2023 products will be manufactured internally,” Gelsinger said. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.” He plans to provide more details after officially taking over the CEO role on Feb. 15, but Gelsinger was clear that Intel is sticking with its once mighty
AWARENESS NEEDED: The central bank urged lenders to know their customers before undertaking business for them and to seek funding in conventional ways The central bank yesterday said that it would take action against four foreign lenders for their involvement in helping companies trade in the deliverable forward market in contravention of foreign-exchange regulations. Some grain merchants newly based in Taiwan have since July 2019 been practicing questionable currency-trading activity, with the help of branches and subsidiaries of six foreign banks, the monetary policymaker told an unscheduled news conference. Affiliated firms as of July last year completed currency-related deals they referred to as trading that totaled US$11 billion, which was not in sync with their real business needs, the central bank said after wrapping up
RSS