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A survey released by the Japanese government on Monday, August 31, revealed that a severe labor shortage remains the primary reason Japanese companies are hiring foreign workers. This highlights the Japanese economys reliance on overseas labor, even as Prime Minister Sanae Takaichi seeks to tighten regulations targeting non-Japanese residents. A multi-option survey conducted by the Ministry of Health, Labour and Welfare showed that 68.2% of companies cited alleviating labor shortages as the reason for hiring foreigners. This reason has remained the top choice every year since the survey began in 2023. Approximately 56% of companies stated that they recruit based on the abilities and qualifications of foreign workers; 18% indicated they hoped to promote workplace internationalization. With Japans declining population and aging workforce, companies are increasing their recruitment of foreign workers to fill labor gaps, leading to a significant increase in the number of foreign workers. A report released this month by Teikoku Databank showed that more than half of companies reported a shortage of full-time employees. The survey also revealed that nearly 30% of companies reported an insufficient number of non-regular employees.Japans construction orders fell 13.4% year-on-year in July, compared with 2.3% in the previous month.Japans housing starts rose 8.19% year-on-year in July, below the expected 7.8% and the previous months 18.60%.August 31 - According to data released by Nepals National Disaster Risk Reduction Authority, as of 9:00 a.m. local time on August 31, the death toll from the landslide disaster in Nepal has risen to 903, with 4,247 people still missing.On August 31st, to further deepen the reform of medical insurance payment methods, promote the dynamic adjustment of the disease-based payment grouping scheme, and continuously optimize supporting mechanisms such as special case negotiation, the National Healthcare Security Administration organized two special symposiums on the disease-based payment special case negotiation mechanism on the afternoon of August 25th. In conjunction with the upcoming release of the disease-based payment 3.0 grouping scheme, the symposiums sought opinions and suggestions from local healthcare security departments and medical institutions on improving the special case negotiation mechanism. Participants offered suggestions on strengthening management, optimizing processes, and improving efficiency, and generally agreed that the special case negotiation mechanism has played a positive role in alleviating medical institutions concerns about admitting difficult and critically ill patients and supporting the application of new clinical drugs, consumables, and technologies.

Weekly Fundamental Euro Forecast: September ECB Hike Odds Stay Elevated

Cory Russell

Aug 08, 2022 15:03

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A REVIEW OF EUROPE WEEK

The Euro gained ground versus six of its seven main peers during a generally favorable week. The EUR/JPY rate had the best performance, rising by +0.87 percent after suffering significant losses earlier in the week. The euro saw gains against the three currencies that make up commodities:


EUR/AUD rates rose by 0.68 percent, EUR/CAD rates rose by 0.63 percent, and EUR/NZD rates moved up by 0.29 percent. Rates for EUR/CHF also increased by 0.68 percent, marking their first increases after falling for seven straight weeks. Following the release of the July US employment data, EUR/USD rates were the lone decliner, falling by -0.45 percent.

QUIET EUROZONE ECONOMIC CALENDAR

The economic calendar for the Eurozone is considerably calmer than in recent weeks during the second week of August. Only one "high" rated data release is scheduled for the next days, while there are less than ten "medium" rated releases. The summer's "dog days" have arrived.


The following are the significant events on the Eurozone economic calendar for the next week:

The final July German inflation rate (HICP) data will be made public at 6 GMT on Wednesday, August 10. At 8 GMT, the final Italian inflation rate (HICP) data for July is expected.


The French IEA oil market report will be released at 8 GMT on Thursday, August 11.


The final French inflation rate (HICP) report will be announced at 6:45 GMT on Friday, August 12, while the 2Q'22 French unemployment rate will be released at 5:30 GMT. At 7 GMT, the last Spanish July inflation rate (HICP) announcement is expected. At 8 GMT, the June Italian trade balance data will be released. At 9 GMT, the June industrial output data for the Eurozone will be released.

EXPECTATIONS FOR ECB RATE HIKES EVOLVE

The European Central Bank has maintained a stance that implies the difference between the main interest rates of the ECB and other significant central banks will continue to close after underperforming for most of 2021 and 2022.


Rates markets are discounting a 100% likelihood of a 25 bps rate rise in September and an 88 percent possibility of a 50% rate hike, which would raise the ECB's main rate to 0.50 percent, after the central bank delivered a 50 bps rate hike in July, the greatest increase of this kind since 2000. The ECB's key rate is expected to increase to 1.13 percent by the end of 2022, according to rate markets. The ECB is still trying to strike a compromise between worries over multi-decade high inflation, slowing economy, and a revived Eurozone debt crisis.

10-YEAR YIELDS FOR FRENCH, GERMAN, GREEK, ITALIAN, PORTUGUESE, AND SPANISH (AUGUST 2020 TO AUGUST 2022) (CHART 1)

As of now, the ECB's efforts to stop bond market fragmentation, or the expansion of yield gaps as during the 2010s Eurozone debt crisis, are succeeding. The Transmission Protection Instrument (TPI), an anti-fragmentation instrument that allows the ECB to sell part of its core debt holdings and use the profits to buy peripheral debt, only seems to have been implemented lately. If the Euro is to have any chance of launching a more major rise over the coming months, the ECB's attempts to stop yield spreads from expanding must continue to be successful.

Positioning for CFTC COT Euro Futures (August 2020 to August 2022) (CHART 2)

Regarding positioning, the CFTC's COT for the week ending August 2 shows that traders reduced their net-short holdings in the euro from 41,875 to 37,541 contracts. The eight-week stretch of net-short positioning for the euro is the longest since March 2020. There is still a chance for a rally to cover short positions.