Japan GDP unexpectedly accelerates in first quarter as firms boost investment

 By Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) - Japan's economy expanded much faster than initially expected over January to March as companies ramped up capital investment, underscoring the central bank's view that recovery from last year's recession is gaining momentum.

The economy grew an annualised 3.9 percent in the first three months of this year, Cabinet Office data showed on Monday, handily beating a preliminary estimate of a 2.4 percent gain, and topping a median market estimate for 2.7 percent growth.

"This is a pretty positive figure and shows the recovery is picking up pace," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"Non-manufacturers are boosting spending on expectations that private consumption will recover, so this should serve as a key driver of growth," he said.

Capital spending rose 2.7 percent from the previous quarter, much more than a preliminary estimate of 0.4 percent growth and bigger than a 2.3 percent expansion projected in a Reuters poll.

Taking advantage of a weak yen (JPY=), a number of Japanese manufacturers are shifting production back to Japan from China and elsewhere. Panasonic has pulled back some production of room air-conditioners and Canon 7751.T has repatriated some output of high-end copiers.

Analysts say record profits and ample cash have finally started spurring firms such as industrial robot maker Fanuc Corp to increase capital investment.

SERVICE-SECTOR INVESTMENT ON THE RISE

The data is welcome news for the government and the Bank of Japan, which are hoping that expectations of a steady economic recovery will spur companies and households to boost spending.

A pick-up in capital expenditure is key for the success of premier Shinzo Abe's stimulus policies, which aim to reflate the economy out of stagnation by changing companies' perception that deflation will persist.

"The Japanese economy is returning to growth orbit," Abe's spokesman Yasuhisa Kawamura told reporters on the sidelines of a summit of Group of Seven leaders on Sunday.

The upgrade reflected a Ministry of Finance survey issued last week, which showed corporate capital spending grew in January-March at the fastest pace in a year.

The MOF survey, which is used to calculate revised GDP data, showed a notable increase in non-manufacturers' spending.

Rapid expansion of online and mobile businesses is driving investment on distribution and inventory networks by retailers and wholesalers, while hotels and theme parks are renovating to draw in customers, including foreign tourists attracted by a weak yen.

"Non-manufacturers may also be investing more on automation to meet a shortage of labour," noted Norinchukin's Minami.

(Additional reporting by Ritsuko Ando and Izumi Nakagawa; Editing by Eric Meijer)

Source:https://uk.finance.yahoo.com/news/japan-first-quarter-gdp-revised-000139767.html

Oil prices fall as China's crude imports tumble, OPEC keeps production high

 By Henning Gloystein

SINGAPORE (Reuters) - Crude oil prices fell on Monday as China's oil imports dropped sharply and markets were expected to be increasingly oversupplied following OPEC's decision to keep its production targets unchanged.

China, the world's biggest net oil importer, bought nearly a quarter less crude in May than it did in the previous month, according to official data. Its imports of oil products also fell just over six percent while product exports fell 10 percent.

China's fall in imports came after the Organization of the Petroleum Exporting Countries (OPEC) agreed on Friday to stick to its policy of high output, which stands above 30 million barrels per day, exacerbating worries about a glut in a market where millions of barrels of crude are stored without a buyer.

"Crude demand/supply remains in excess of supplies," said Yasushi Kimura, president of the Petroleum Association of Japan (PAJ) after OPEC's decision.

Front-month Brent futures dropped 38 cents to $62.93 a barrel by 0602 GMT. U.S. crude was at $58.69 per barrel, down 44 cents, and analysts said oil prices would likely fall further.

"The oil market still looks like it is heading for trouble ... Even if year-on-year U.S. supply growth does slow dramatically in Q2, with OPEC producing at 31 million bpd, the oil market surplus, although shrinking in H2, is set to persist for the whole year," Barclays said on Monday.

"This means that global oil stocks, already at record highs, will continue to climb, resulting in further downward pressure on prices and a likely re-widening of Brent’s contango, as the market seeks out increasingly expensive capacity to store the excess crude and products," it added.

OPEC ministers said the group may even exceed the 30 million bpd target, especially if there is rising production and exports from Libya, Iraq or Iran.

"We forecast that Saudi and other low-cost producers will continue to increase output as this is the next logical step to maximizing revenues in the face of shale oil's scalability," Goldman Sachs said, adding that the global oil market would remain oversupplied in 2016.

Adding to the glut, analysts also expect U.S. drilling to start increasing again in the second half of this year following 26 weeks of declines.

Drilling fell after crude prices dropped to six-year lows in January, but a modest recovery and reduced operating costs are allowing U.S. drillers to operate at costs that would have been previously unviable.

(Additional reporting by Osamu Tsukimori in TOKYO; Editing by Alan Raybould and Tom Hogue)

Source:https://uk.finance.yahoo.com/news/oil-prices-fall-chinas-crude-035412285.html

Gold ticks up, but still near 11-week low on U.S. rate outlook

 By A. Ananthalakshmi

SINGAPORE (Reuters) - Gold ticked up on Monday after a three-day losing streak but was still hovering near an 11-week low as a strong U.S. jobs report boosted expectations of a U.S. interest rate rise in September.

Spot gold inched up 0.1 percent to $1,172.86 an ounce by 0647 GMT.

The metal had fallen to $1,162.35 on Friday, its lowest since March 19, after data showed U.S. job growth accelerated sharply in May and wages picked up. Nonfarm payrolls increased 280,000 last month, the largest gain since December.

The report, indicating signs of strong momentum in the U.S. economy, bolstered expectations the Federal Reserve will begin to raise rates in September and sent the dollar to a 13-year peak against the yen.

"The technicals of the markets have deteriorated to such an extent that they will now likely drive precious prices lower, as the theme of a stronger dollar and the imminent rise in U.S. rates again dominate sentiment," said INTL FCStone analyst Edward Meir.

Higher U.S. rates could diminish demand for non-interest-paying bullion, while a stronger dollar makes gold more expensive for holders of other currencies and reduces the metal's safe-haven appeal.

Investor positioning in bullion continued to reflect bearish sentiment.

Further outflows were seen in SPDR Gold Trust, the world's top gold-backed exchange-traded fund, with holdings dropping 0.17 percent to 708.70 tonnes on Friday, the lowest since mid-January.

Hedge funds and money managers cut net long positions in gold and silver in the week ended June 2, U.S. Commodity Futures Trading Commission data showed on Friday.

"Gold ETF holdings are near their 2015 lows and seem to be contributing to gold's gradual decline since mid-May," said MKS Group trader James Gardiner. "Higher bond yields and a stronger dollar are also continuing to put pressure on the metal."

Benchmark 10-year U.S. Treasury yields posted their steepest weekly jump in nearly two years on Friday after the jobs report.

The next major support level for gold is around the March low of $1,142, although there are also signs of strong support in the mid-to-low 60s, he said.

In mining news, South Africa's Association of Mineworkers and Construction Union said on Sunday it would launch a wildcat strike if its rival union and gold mining companies impose a wage deal on its members.

Strikes could potentially lower production levels and lend support to prices.

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and Alan Raybould)

Source:https://uk.finance.yahoo.com/news/gold-ticks-holds-near-11-035608194.html

FB - Technical Analysis

Technical Indicators (Daily)



Source:http://lusitanianstraders.blogspot.pt/2015/06/fb-technical-analysis_3.html

Japan stocks retreat, euro higher as Greece deadline looms

Japanese shares extended losses Wednesday after ending a 12-day rally in the previous session, while the euro edged higher following upbeat eurozone inflation data as traders track Greece's debt reform talks ahead of a repayment deadline.

Tokyo retreated 0.42 percent in the morning, Sydney lost 0.52 percent and Shanghai eased 0.10 percent, but Hong Kong added 0.91 percent and Seoul was 0.29 percent higher.

Dealers moved out of Japanese equities for a second day after the Nikkei chalked up an impressive rally not seen since 1988, at the height of the country's stock market bubble.

Selling was fuelled by a pick-up in the yen, which on Tuesday hit its weakest level against the dollar in more than 12 years.

The greenback fell with US stocks on Wednesday owing to concerns about the lack of progress in Greece's talks with its creditors on overhauling its bailout terms.

The Dow lost 0.16 percent, the S&P 500 dipped 0.10 percent and the Nasdaq shed 0.13 percent.

On currency markets the dollar was at 123.93 yen early Wednesday against 124.09 in New York. The greenback briefly touched 125.05 yen in Asia Tuesday.

The euro bought $1.1168 and 138.43 yen from $1.1152 and 138.39 yen in US trade.

With a deadline for Greece to repay some of its debt on Friday, the country's leaders and its creditors have exchanged reform proposals, although there are still fears an agreement may not be reached.

Investors were spooked Tuesday when Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers said he was unimpressed with progress.

His remarks come as Greek Prime Minister Alexis Tsipras prepares to meet European Commission President Jean-Claude Juncker in Brussels on Wednesday evening.

There are worries that if Greece defaults on its debts the country could end up tumbling out of the eurozone.

"The euro clearly has the ability to lead the dollar higher or lower across the board, and really that vulnerability stems from very different potential outcomes you get from the negotiations between Greece and its creditors," Raiko Shareef, a markets strategist at Bank of New Zealand, told Bloomberg News.

The single currency was also boosted by data showing eurozone inflation climbed to 0.3 percent in May -- the first rise in five months and raising hopes the region is recovering -- while Germany and Spain released solid labour reports.

The results came ahead of Wednesday's meeting of the European Central Bank and a subsequent news conference with ECB Chief Mario Draghi.

Oil prices slipped after sharp gains on Tuesday fuelled by the weaker dollar. US benchmark West Texas Intermediate for July delivery fell 36 cents to $60.90 while Brent crude for July eased 32 cents to $65.17.

Gold fetched $1,194.06 compared with $1,190.90 late Tuesday.

Source:https://uk.finance.yahoo.com/news/japan-stocks-retreat-euro-higher-030145335.html

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