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On November 18th, Barclays economists stated in their quarterly outlook that the yen is likely to remain under pressure given Japanese Prime Minister Sanae Takaichis policy stance leaning towards "Abenomics." Given the yens high sensitivity to fiscal risks, further fiscal expansion is expected to keep USD/JPY at higher levels. Barclays recommends investors continue to hold long positions in USD/JPY.On November 18th, a CLSA research report indicated that PetroChinas (00857.HK) share price recently hit a new high, approaching the HK$9 mark, a level not seen during the past three years of declining oil prices. The report believes that the companys solid third-quarter results suggest that even if oil prices remain around US$60 per barrel for the remainder of the year, it is still likely to exceed market expectations for the full year. Despite the recent share price increase, the full-year dividend yield is expected to reach 6%, providing investors with a defensive option. Furthermore, the companys guidance for capital expenditure in 2025 is RMB 262 billion, a 5% year-on-year decrease, the first year-on-year decline in three years. Coupled with a low net debt ratio, the report believes the company has room to increase its full-year dividend payout ratio, which was 52% last year. The report raises PetroChinas H-share target price from HK$8.8 to HK$10, maintaining an "Outperform" rating.Jefferies: Raises its price target for Ford Motor (FN) from $12 to $15; raises its price target for General Motors (GM.N) from $55 to $75.Jefferies raised its price target for Ctrip (TCOM.O) from $85 to $88.On November 18th, CICC issued a research report initiating coverage of Guoquan (02517.HK) with an "Outperform" rating and a target price of HK$4.9. Guoquans retail-oriented strategy caters to consumers needs for home-cooked meals by offering a variety of delicious and affordable family-friendly dining products. CICC projects the companys earnings per share to be RMB 0.16 and RMB 0.2 for this year and next year, respectively, implying a CAGR of over 35% from 2024 to 2026.

As the BoJ ponders a YCC expansion, EUR/JPY continues to decline, falling below 142.60

Alina Haynes

Apr 06, 2023 11:52

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After plunging below 142.60 during the Asian trading session, the EUR/JPY pair's three-day losing trend was extended. Renewed rumors of an expansion of the Bank of Japan's (BoJ) Yield Curve Control (YCC) are exerting immense pressure on the cross.

 

The Japanese economy is experiencing gradual wage growth, and inflation is expected to respond to recent increases in crude oil prices. Analysts at Wells Fargo believe the BoJ will take advantage of a tactical opportunity to further modify its policy settings in the fourth quarter of 2022, and are inclined toward a meeting in October. They added that this timeframe is optimal for a smooth policy adjustment, as monetary easing from the Federal Reserve (Fed) and other major central banks should alleviate yield pressure.

 

In particular, the Bank of Japan (BoJ) will raise the target yield for 10-year Japanese government bonds (JGBs) from 0% to 0.25% and increase the tolerance interval surrounding this target to +/- 75 basis points.

 

Accelerating PMIs in the Eurozone provide support for the European Central Bank's sustained rate hikes. (ECB). S&P Global reported a Composite PMI of 53.7 on Wednesday, which was higher than the previous release of 52.0 but below expectations of 54.1, the highest level in the past ten months.

 

According to Reuters, S&P Global issued the following statement: "Manufacturing production increased slightly, but the service sector had the greatest impact on March's accelerated growth."

 

Wednesday, ECB policymaker Boris Vuji stated regarding interest rate forecasts, "The majority of the rate-hiking cycle has passed." He added, "We may require additional rate increases to address core inflation."

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