Japan’s Government May Raise Assesment

Japan’s government may raise its economic assessment in May for the first time in more than 3 years - Japanese Press

Japan’s Cabinet Office Comments

Japan’s cabinet office to maintain economic assessment in April - Nikkei

BOJ Governor Shirakawa on the Wires

The BOJ’s Governor Shirawkawa noted that it is highly likely the Japanese economy will keep worsening, adding that Japan’s exports are deteriorating significantly.

•  The BOJ will do all it can to support economy
• The uncertainty over the economy and prices is very high.
• Japan’s economy likely to have worsened since BoJ’s Jan outlook.

Japan’s Finance Minister Yosano Comments

Finance Minister Yosano: Japan’s fiscal situation is “severe”, finding funding for stimulus is a big challenge
- To release revised economic forecast before submitting extra budget.

Bobbys Corner-Open Market- 3.31.2009

Good Morning:

The JPY dropped vs. the USD as the markets await a plan for a stimulus plan to revive the Japanese economy.  Overnight- JPY crosses helped lift the Euro,AUD, and GBP.  Speculation that the reason for the drop in the JPY vs. the Euro is that the ECB may refrain from further interest rate cuts.

European stocks are higher this morning as commodities producers rose and Marks & Spencer in the UK posted higher than expected sales.  US Futures are pointing to a higher opening this morning.  Asian shares lost ground.

Oil:$49.67                                         Gold:$916.50

Todays Data:
CaseShiller Home Price:                                prior: 150.66
Chi PMI-                                  exp: 34.0          prior: 34.2
Cons Conf:                              exp: 27.0          prior: 25.0

HAVE A GREAT DAY & GOOD LUCK

Japanese Finance Minister Official Comments

Japan Senior Fin Min Official: Does not expect G-20 to discuss USD as key currency

BoJ Monthly Report Release

BOJ MONTHLY REPORT: ECONOMY DETERIORATED SIGNIFICANTLY AND IS LIKELY TO KEEP WORSENING
- Pace of output cuts to slow with lower inventories
- Bond issues by lower-rated firms are depressed; Fall in CP issuance has slowed
- Financial conditions remain tight
- Expects consumption to weaken further based on poor employment and income conditions
- On-year CPI may start to contract due to weak domestic demand
- Overseas economic conditions continue deteriorating

CHF Remains Weak Following Intervention

The EURCHF continues to strengthen as the USDCHF is consolidating huge gains made earlier thanks to the Swiss National Bank intervening to prevent the risk of further deflation.  This drastic move occurred as the firm CHF was clearly a concern for the SNB.  Behind possibly the worst Swiss recession in 30 years, the export-dependent economy needed a spark and this move will hopefully provide that.

As this is the first move by a central bank in this global economic crisis, the question now is who, if anyone is next?  There has been much discussion for the last few months about Japan intervening.  The deepening economic crisis and risk aversion had allowed the JPY to firm to alarming levels.  However, we have seen a slight swing as the JPY did lose steam and soften up with the Japanese fiscal year coming to an end and JPY selling.  But the strong JPY threat remains with comments from former Japanese vice Minister of Finance Sakakibara “Mr. Yen” predicting that the USDJPY will range from 70 to 100 in 2009.

Masahiro Sato, joint general manager of the treasury division at Mazuho Trust & Banking Co. does not see Japanese intervention anytime soon:

“Competitive currency devaluation is not likely in Japan now because the risks of sparking trade friction are too great. The Swiss can get away with this because of the relatively small size of their economy and the limited role they play in the global economy,” Sato said. “A weaker currency is not necessarily a cure-all, because it can fuel capital flight. Japan certainly doesn’t want to take on that risk. Japan’s homework (task) from the G7 is fiscal stimulus, so it should focus on that.”

The EURCHF is just off highs (1.5395) made hours ago.  The USDCHF has failed to get back to yesterday’s high as renewed risk appetite has somewhat weakened the USD.

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