US companies’ profits have exceeded forecasts by 4.6%, the European ones by 2% and Japanese firms by 6.7%. This has fuelled a strong rally in the stock markets in just a few weeks. But is there room for the markets to rise further?
Japan’s Prime Minister, Shinzo Abe, called a snap election on Monday, cashing in on the increase in popular support for his hard line against North Korea’s ballistic missile programme.
Yoichi Funabashi and Harry Dempse via Caixin |Yoichi Funabashi and Harry Dempse via Caixin | Sino-Japanese relations have been stuck in a political quagmire for over six years. Tensions over the Senkaku/Diaoyu Islands have resurfaced time and time again since September 2010, when a Chinese fishing boat rammed two Japanese coast guard ships and its captain was arrested by the Japanese.
Japan’s Prime Minister Shinzo Abe signed on Thursday a political agreement on the EU-Japan trade deal, which would be likely completed within months,expectedly by January. Officials said it was not clear at this stage how the EU-Japan deal would be ratified in Europe. Full national ratification gives every national parliament and some regional ones a veto.
Benjamin Cole | Japan has put together a string of five straight quarters of real growth, along with declining unemployment and minute amounts of inflation. Some have recently termed Abenomics “a big success.”
Monetary and fiscal stimulus policies have failed to reactivate consumer confidence in Japan and it declined into a light, but cronic deflation of 0.3% in 2016.
Benjamin Cole | The econosphere is again rumbling about Chinese debt and China banks, evidently forgetting the long serious faces made many times about Chinese debt and China banks in the recent past. But China keeps growing. Japan is another story that defies Western orthodox macroeconomics.
Julius Baer | Japan’s Q2 growth missed forecasts, confirming expectations for a sluggish economy, on weak exports and business investment. GDP expanded at an annualised pace of 0.2%, missing estimates for a 0.7% increase.
UBS | Non-Japan Asian private debt is now the highest in the world for any major region and is climbing toward 170% of GDP. As we have argued in our Debtopia thesis since 2013, rising leverage will increasingly result in diminishing marginal benefits to economies and profits when debt becomes excessive.
Guntram B. Wolff via Caixin | G-20 ministers in Shanghai appeared to be aware of the importance of structural work. In particular, there was agreement in our panel discussions that the Base Erosion and Profit Shifting (BEPS) project of the OECD was an essential element to deal with tax avoidance and ensure that profits are taxed where economic activity generating it takes place.