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On November 20th, Chief Cabinet Secretary Minoru Kihara stated at a press conference that the recent one-way, sharp fluctuations in the yens exchange rate are worrying and require close monitoring. He pointed out, "We must be vigilant against excessive volatility and disorderly trends in the exchange rate." This statement came as the yen fell below 157 against the dollar, reaching its weakest level since January of this year. The weakening market expectations for a near-term interest rate cut by the Federal Reserve are a significant factor driving the dollars strength and putting pressure on the yen. Kihara emphasized that stable exchange rates based on economic fundamentals are crucial, and he opposed sharp fluctuations driven by speculation or market sentiment.Samsung Electronics gains widened to 5.5%.Fitch: Profitability of major Japanese banks will improve.On November 20th, the overnight SHIBOR was 1.3640%, down 5.60 basis points; the 7-day SHIBOR was 1.4600%, down 2.70 basis points; the 14-day SHIBOR was 1.5460%, down 2.20 basis points; the 1-month SHIBOR was 1.5180%, down 0.20 basis points; and the 3-month SHIBOR was 1.5790%, down 0.10 basis points.On November 20th, as the yen fell to its lowest level against the dollar in about 10 months, Bank of Japan board member Junko Koeda signaled on Thursday that an interest rate hike was possible as early as next month, emphasizing the necessity of normalizing interest rates. Speaking to local business leaders in Niigata City, Koeda said, "Given that real interest rates are currently at a significantly low level, I believe it is necessary for the central bank to proceed with interest rate normalization." Following her remarks, the yen weakened further against the dollar, indicating that investors may be awaiting a clearer signal of a rate hike. The market widely expects the Bank of Japan to raise interest rates no later than January next year, and Koedas comments reinforced expectations of a possible action in December.

Ukraine Will Block A Crucial Russian Gas Transit to Europe, Blaming Russia

Charlie Brooks

May 11, 2022 09:46

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Ukraine said on Tuesday that it will cease the flow of gas via a transit point that, according to Kiev, sends over one-third of the fuel piped from Russia to Europe through Ukraine. Kiev blamed Moscow for the action and said it would redirect the flows elsewhere.


Even after Moscow's invasion, Ukraine has remained a significant transit route for Russian gas to Europe.


The operator of Ukraine's gas infrastructure, GTSOU, has declared "force majeure" and will cease shipments through the Sokhranivka route as of Wednesday. "Force majeure" is a provision triggered when a firm is affected by circumstances beyond its control.


However, Gazprom (MCX:GAZP), which has a monopoly on Russian gas pipeline exports, said that it was "technologically impossible" to move all volumes to the Sudzha connecting point farther to the west, as GTSOU requested.


GTSOU CEO Sergiy Makogon told Reuters that Russian occupation troops have begun transporting gas flowing through Ukraine to two rebel territories supported by Russia in the country's east. He failed to provide proof.


The company stated that it was unable to operate at the Novopskov gas compressor station due to "the interference of the occupying forces in technical processes," adding that it could temporarily redirect the affected flow to the Sudzha physical interconnection point, which is located on Ukrainian territory.


Ukraine's suspension of Russian natural gas shipments via the Sokhranivka route should have no effect on the local Ukrainian market, according to Yuriy Vitrenko, the president of the state-owned energy business Naftogaz.


The national gas company of Moldova, a tiny country on Ukraine's western border, said that neither GTSOU nor Gazprom had notified them of a supply interruption.


Russian army and separatist militants have controlled the Novopskov compressor station in the Luhansk area of eastern Ukraine since shortly after Moscow launched a "special military operation" in February.


GTSOU said that it is the first compressor in the Ukraine gas transit system in the Luhansk area, the transit route for about 32,6 million cubic metres of gas per day, or a third of the Russian gas transported to Europe through Ukraine.


To fulfill its "transit responsibilities to European partners in full," GTSOU said that it will "temporarily move unavailable capacity" to the Sudzha interconnection point.


Gazprom said it had received information from Ukraine that the nation will cease gas transit to Europe through the Sokhranivka interconnector at 7:00 a.m. on Wednesday local time.


The Russian corporation said that it observed no evidence of force majeure or impediments to business as usual. Gazprom emphasized that it was fulfilling its commitments to European gas purchasers.


As punishment for the invasion of Ukraine, the United States has pushed other nations to reduce their reliance on Russian energy and has prohibited Russian oil and other energy imports.


Ned Price, a spokeswoman for the U.S. State Department, said that Tuesday's declaration does not alter the "as soon as feasible" schedule for reducing global dependency on Russian oil.

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