Japan's overseas development agency said Monday that it has agreed to lend funds for a new $1.5-billion light rail system for Sri Lanka's congested capital Colombo.

Colombo traffic slows to an average speed of less than seven kilometres (four miles) an hour during peak times, making it one of the slowest in South Asia.

The Japan International Cooperation Agency (JICA) said it signed an agreement with Sri Lanka to provide a loan of 30.04 billion yen ($270 million).

Under the deal, Japanese technology including rolling stock and electromechanical equipment will be utilised in the project, it added.

The Light Rail Transit (LRT) system with 16 stations over 15.7 kilometres (9.8 miles) will operate on an elevated track in and around Colombo.&nbsp;

"It will fundamentally change the face of public transport in this country, ease traffic congestion and improve the environment of Colombo city," the statement said.

The Japanese loan carries an interest rate of 0.1 per cent and is repayable over 40 years with a 12-year grace period, JICA said.

Japan has already funded sections of new expressways and a key bridge to reduce traffic congestion in and out of the capital.

Sri Lanka has seen a massive rollout of ports, highways and railroads in recent years but several ambitious infrastructure projects ended up as white elephants and left the country facing a mountain of debt -- mainly to China.&nbsp;

Unable to service its loans, the government of Prime Minister Ranil Wickremesinghe leased a Chinese-built port at Hambantota to a Beijing company for $1.12 billion in 2017.

Japan's overseas development agency said Monday that it has agreed to lend funds for a new $1.5-billion light rail system for Sri Lanka's congested capital Colombo.

Japan's overseas development agency said Monday that it has agreed to lend funds for a new $1.5-billion light rail system for Sri Lanka's congested capital Colombo. Colombo traffic slows to an average speed of less than seven kilometres (four miles) an hour during peak times, making it one of the slowest in South Asia. The Japan International Cooperation Agency (JICA) said it signed an agreement with Sri Lanka to provide a loan of 30.04 billion yen ($270 million). Under the deal, Japanese technology including rolling stock and electromechanical equipment will be utilised in the project, it added. The Light Rail Transit (LRT) system with 16 stations over 15.7 kilometres (9.8 miles) will operate on an elevated track in and around Colombo. "It will fundamentally change the face of public transport in this country, ease traffic congestion and improve the environment of Colombo city," the statement said. The Japanese loan carries an interest rate of 0.1 per cent and is repayable over 40 years with a 12-year grace period, JICA said. Japan has already funded sections of new expressways and a key bridge to reduce traffic congestion in and out of the capital. Sri Lanka has seen a massive rollout of ports, highways and railroads in recent years but several ambitious infrastructure projects ended up as white elephants and left the country facing a mountain of debt -- mainly to China. Unable to service its loans, the government of Prime Minister Ranil Wickremesinghe leased a Chinese-built port at Hambantota to a Beijing company for $1.12 billion in 2017.

Japan to fund Sri Lankan light rail system

The threat of a global trade war sent stock markets sliding and investors rushing for the safety of currencies like the yen and government bonds on Friday, after US&nbsp;President Donald Trump announced tariffs on up to $60 billion of Chinese goods.

World stocks, down 3.4 per cent since Monday, are on course for their worst week since early February, when a spike in volatility sent markets into a tailspin.

European stocks fell at the open, with Germany&#39;s Dax down 1.6 per cent, the French CAC 40 1.5 per cent lower and Britain&#39;s FTSE 100 0.8 per cent in the red.

That followed large falls in the US, with the S&amp;P 500 shedding 2.5 per cent, and overnight in Asia, where the Japanese Nikkei 225 was the biggest loser slumping 4.5 per cent.

Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, although the measures have a 30-day consultation period.

China urged the United States to &quot;pull back from the brink&quot;, but investors fear Trump&#39;s tariffs are leading the world&#39;s two largest economies into a trade war with potentially dire consequences for the global economy.

China disclosed its own plans on Friday to impose tariffs on up to $3 billion of US&nbsp;imports in retaliation against the US&nbsp;tariffs on Chinese steel and aluminium products.

&quot;The equity markets are getting clobbered, which is not that surprising with fears of a trade war breaking out,&quot; said Paul Fage, a TD Securities emerging markets strategist.

With investors seeking out safer assets, many jumped into government bond markets in Europe and the United States.

US&nbsp;10-year Treasury yields, which fell almost 8 basis points on Thursday, were set for their biggest two-week fall since September. In Europe, benchmark issuer Germany&#39;s 10-year bond yield hovered close to 10-week lows struck a day earlier at around 0.52 per cent and was on track for its biggest two-week drop since August, down 13 basis points.

Many investors also turned to the yen, a currency likely to benefit from a full-fledged trade war. The Japanese currency gained 0.4 per cent against the dollar to 104.87 yen, the first time it has been below 105 since November 2016.

The Swiss franc, another currency bought in times of market uncertainty, rose 0.3 per cent versus the dollar, although it remained flat against the euro.

The dollar fell 0.2 per cent against a basket of currencies.

&quot;The FX market itself isn&#39;t sure, and its reaction to risk-off and lower bond yields across the board is to buy the yen and the Swiss franc,&quot; Kit Juckes, an FX strategist at Societe Generale, wrote in a daily note.

In commodity markets, oil prices recouped overnight losses after Saudi Arabia said that OPEC and Russian-led production curbs introduced in 2017 will need to be extended into 2019.

US&nbsp;crude futures were up 0.8 per cent at $64.79 per barrel after losing 1.3 per cent on Thursday and Brent gained 0.45 per&nbsp; cent to $69.22.

Safe-haven spot gold rose 1 per cent to $1,341 an ounce, highest since February 20.

Copper and iron prices both fell, as investors bet demand for the metals would suffer in a trade war.

Daniel Lockyer, senior fund manager at Hawksmoor Investment Management, said financial markets had got ahead of themselves and were failing to price in the risk a number of factors could trigger a sell-off.

&quot;It&#39;s not that we thought trade wars would cause the market to fall, it&#39;s that there was too much optimism priced into stock markets,&quot; he said.

The threat of a global trade war sent stock markets sliding and investors rushing for the safety of currencies like the yen and government bonds on Friday, after US President Donald Trump announced tariffs on up to $60 billion of Chinese goods

The threat of a global trade war sent stock markets sliding and investors rushing for the safety of currencies like the yen and government bonds on Friday, after US President Donald Trump announced tariffs on up to $60 billion of Chinese goods. World stocks, down 3.4 per cent since Monday, are on course for their worst week since early February, when a spike in volatility sent markets into a tailspin. European stocks fell at the open, with Germany's Dax down 1.6 per cent, the French CAC 40 1.5 per cent lower and Britain's FTSE 100 0.8 per cent in the red. That followed large falls in the US, with the S&P 500 shedding 2.5 per cent, and overnight in Asia, where the Japanese Nikkei 225 was the biggest loser slumping 4.5 per cent. Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, although the measures have a 30-day consultation period. China urged the United States to "pull back from the brink", but investors fear Trump's tariffs are leading the world's two largest economies into a trade war with potentially dire consequences for the global economy. China disclosed its own plans on Friday to impose tariffs on up to $3 billion of US imports in retaliation against the US tariffs on Chinese steel and aluminium products. "The equity markets are getting clobbered, which is not that surprising with fears of a trade war breaking out," said Paul Fage, a TD Securities emerging markets strategist. With investors seeking out safer assets, many jumped into government bond markets in Europe and the United States. US 10-year Treasury yields, which fell almost 8 basis points on Thursday, were set for their biggest two-week fall since September. In Europe, benchmark issuer Germany's 10-year bond yield hovered close to 10-week lows struck a day earlier at around 0.52 per cent and was on track for its biggest two-week drop since August, down 13 basis points. Many investors also turned to the yen, a currency likely to benefit from a full-fledged trade war. The Japanese currency gained 0.4 per cent against the dollar to 104.87 yen, the first time it has been below 105 since November 2016. The Swiss franc, another currency bought in times of market uncertainty, rose 0.3 per cent versus the dollar, although it remained flat against the euro. The dollar fell 0.2 per cent against a basket of currencies. "The FX market itself isn't sure, and its reaction to risk-off and lower bond yields across the board is to buy the yen and the Swiss franc," Kit Juckes, an FX strategist at Societe Generale, wrote in a daily note. In commodity markets, oil prices recouped overnight losses after Saudi Arabia said that OPEC and Russian-led production curbs introduced in 2017 will need to be extended into 2019. US crude futures were up 0.8 per cent at $64.79 per barrel after losing 1.3 per cent on Thursday and Brent gained 0.45 per cent to $69.22. Safe-haven spot gold rose 1 per cent to $1,341 an ounce, highest since February 20. Copper and iron prices both fell, as investors bet demand for the metals would suffer in a trade war. Daniel Lockyer, senior fund manager at Hawksmoor Investment Management, said financial markets had got ahead of themselves and were failing to price in the risk a number of factors could trigger a sell-off. "It's not that we thought trade wars would cause the market to fall, it's that there was too much optimism priced into stock markets," he said.

Global stocks slide, yen jumps, as trade war fears grip markets

Stocks around the world fell sharply on Thursday and investors moved into the yen, gold and other safe-haven assets amid more aggressive talk between the United States and North Korea.

MSCI&#39;s gauge of stocks across the globe shed 0.77 per cent, on track for its third straight day of declines as it pulled further back from all-time highs.

The Japanese yen hit an eight-week high against the US&nbsp;dollar, while spot gold also reached a two-month high.

North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the US Pacific island territory of Guam in an unusually detailed threat that further heightened tensions with the United States.

The rise in geopolitical tensions this week, which heightened after US President Donald Trump on Tuesday warned North Korea that it would face &quot;fire and fury&quot; if it threatened the United States, has drawn investor attention away from second-quarter corporate earnings season, which is winding down.

&quot;The story today is North Korea and there was nothing in the earnings that was bullish enough to pull people away from focusing on North Korea,&quot; said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

The Dow Jones Industrial Average fell 94.55 points, or 0.43 per cent, to 21,954.15, the S&amp;P 500 lost 19.51 points, or 0.79 per cent, to 2,454.51 and the Nasdaq Composite dropped 76.39 points, or 1.2 per cent, to 6,275.94.

Shares of US department stores Kohl&#39;s and Macy&#39;s were weak after their results.

The pan-European FTSEurofirst 300 index lost 1.19 per cent.

Shares of staffing firm Adecco slumped 6.4 per cent after its results.

In currencies, the yen strengthened 0.64 per cent versus the greenback at 109.37 per dollar.

&quot;The yen is the big story really. Risk aversion is still very much a concern for markets,&quot; said Shaun Osborne, chief currency strategist, at Scotiabank in Toronto.

The dollar index, which measures against a basket of currencies, fell 0.05 per cent.

The dollar weakened after news that US producer prices unexpectedly fell in July, recording their biggest drop in nearly a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

US Treasury long-dated yields dropped to six-week lows, pressured by US-North Korea tensions and the weak data that further reduced expectations of an interest rate hike in December.

Benchmark 10-year notes last rose 5/32 in price to yield 2.2255 per cent, from 2.242 per cent late on Wednesday.

The 30-year bond last rose 5/32 in price to yield 2.8107 per cent, from 2.818 per cent late on Wednesday.

In commodities, US. crude fell 0.67 per cent to $49.23 per barrel and Brent was last at $52.58, down 0.23 per cent on the day.

Spot gold added 0.7 per cent to $1,285.70 an ounce.

&quot;For now, the uptrend is very much intact in gold, reacting to external geopolitical events,&quot; said Jonathan Butler, commodities analyst at Mitsubishi in London.

The Japanese yen hit an eight-week high against the US?dollar, while spot gold also reached a two-month high

Stocks around the world fell sharply on Thursday and investors moved into the yen, gold and other safe-haven assets amid more aggressive talk between the United States and North Korea. MSCI's gauge of stocks across the globe shed 0.77 per cent, on track for its third straight day of declines as it pulled further back from all-time highs. The Japanese yen hit an eight-week high against the US dollar, while spot gold also reached a two-month high. North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the US Pacific island territory of Guam in an unusually detailed threat that further heightened tensions with the United States. The rise in geopolitical tensions this week, which heightened after US President Donald Trump on Tuesday warned North Korea that it would face "fire and fury" if it threatened the United States, has drawn investor attention away from second-quarter corporate earnings season, which is winding down. "The story today is North Korea and there was nothing in the earnings that was bullish enough to pull people away from focusing on North Korea," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. The Dow Jones Industrial Average fell 94.55 points, or 0.43 per cent, to 21,954.15, the S&P 500 lost 19.51 points, or 0.79 per cent, to 2,454.51 and the Nasdaq Composite dropped 76.39 points, or 1.2 per cent, to 6,275.94. Shares of US department stores Kohl's and Macy's were weak after their results. The pan-European FTSEurofirst 300 index lost 1.19 per cent. Shares of staffing firm Adecco slumped 6.4 per cent after its results. In currencies, the yen strengthened 0.64 per cent versus the greenback at 109.37 per dollar. "The yen is the big story really. Risk aversion is still very much a concern for markets," said Shaun Osborne, chief currency strategist, at Scotiabank in Toronto. The dollar index, which measures against a basket of currencies, fell 0.05 per cent. The dollar weakened after news that US producer prices unexpectedly fell in July, recording their biggest drop in nearly a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase. US Treasury long-dated yields dropped to six-week lows, pressured by US-North Korea tensions and the weak data that further reduced expectations of an interest rate hike in December. Benchmark 10-year notes last rose 5/32 in price to yield 2.2255 per cent, from 2.242 per cent late on Wednesday. The 30-year bond last rose 5/32 in price to yield 2.8107 per cent, from 2.818 per cent late on Wednesday. In commodities, US. crude fell 0.67 per cent to $49.23 per barrel and Brent was last at $52.58, down 0.23 per cent on the day. Spot gold added 0.7 per cent to $1,285.70 an ounce. "For now, the uptrend is very much intact in gold, reacting to external geopolitical events," said Jonathan Butler, commodities analyst at Mitsubishi in London.

As North Korea rattle drags down stocks, value of gold and yen rise

Toshiba shares plunged again Wednesday as it warned of a $6.2 billion writedown in its US nuclear power business and announced a probe into possible wrongdoing by the unit&#39;s senior executives.

One of Japan&#39;s best-known firms, Toshiba shocked investors Tuesday when it failed to report its results for April-December as scheduled then said it needed more time to sort out the situation at troubled atomic division Westinghouse Electric.

Instead it issued a grim preliminary forecast forecast a net loss of 390 billion yen ($3.4 billion) in the fiscal year to March, dragged by a huge writedown topping 700 billion yen at Westinghouse.

The revelation prompted Toshiba chairman Shigenori Shiga to quit his post.

It also said lawyers and an independent auditing firm were sifting through details of an acquisition by Westinghouse, after a whistleblower complained executives exerted &quot;inappropriate pressure&quot; over accounting at the US-based company.

The firm&#39;s Tokyo-listed stock dropped more than 13 percent at one stage before paring losses to sit at 205.9 ($1.80) by the lunch break, down 10.4 percent and extending Tuesday&#39;s eight percent selloff.

The crisis comes less than two years after the conglomerate, which makes everything from trains to memory chips, suffered an embarrassing profit-padding scandal that involved bosses pressuring subordinates to cover up weak earnings.

The company&#39;s stock has lost 60 percent since that crisis came to light in April 2015.

&quot;There is no room for optimism,&quot; said Toshihiko Matsuno, chief strategist at SMBC Friend Securities.

&quot;The share price is still higher than the low at the time of the accounting scandal when investors were pricing in the possibility of its shares being taken off the exchange,&quot; he told AFP, adding that the firm was likely working to avoid an embarrassing delisting.

&quot;Its corporate governance has been called into question and I cannot rule out the possibility that investors are pricing that scenario in&quot; again.

Numerous questions 
On Tuesday, Toshiba warned that any improper accounting at its US nuclear power unit could affect its latest earnings.

&quot;The questions surrounding Toshiba are so numerous, where do you even begin,&quot; Masahiko Ishino, an analyst at Tokai Tokyo Securities, told Bloomberg News.&nbsp;

&quot;Investors want to know what will happen to its nuclear and chip businesses, whether elevator operations and some of Toshiba&#39;s listed subsidiaries will be sold off. &nbsp;There is also the question of why the nuclear writedown happened in the first place.

The industrial giant once touted its overseas nuclear business as a future growth driver, filling a hole left after the 2011 Fukushima crisis slammed the brakes on new atomic projects in Japan.

But it turned out to be a bad bet and on Tuesday it confirmed speculation it would dramatically reduce its nuclear ambitions overseas.

It said it would stop building new atomic power plants, but would continue making related equipment.&nbsp;

And company officials have approached South Korean utility Korea Electric Power Corp about buying part of its stake in British nuclear joint venture NuGeneration.

The atomic strategy U-turn comes as Toshiba undergoes a major restructuring following its 2015 accounting scandal.

It has sold its medical devices unit to camera and copier maker Canon and most of its appliance business to China&#39;s Midea Group while it is also moving to spin off its prized memory chip unit.

(AFP)

The company shocked investors Tuesday when it failed to report its results for April-December as scheduled

Toshiba shares plunged again Wednesday as it warned of a $6.2 billion writedown in its US nuclear power business and announced a probe into possible wrongdoing by the unit's senior executives. One of Japan's best-known firms, Toshiba shocked investors Tuesday when it failed to report its results for April-December as scheduled then said it needed more time to sort out the situation at troubled atomic division Westinghouse Electric. Instead it issued a grim preliminary forecast forecast a net loss of 390 billion yen ($3.4 billion) in the fiscal year to March, dragged by a huge writedown topping 700 billion yen at Westinghouse. The revelation prompted Toshiba chairman Shigenori Shiga to quit his post. It also said lawyers and an independent auditing firm were sifting through details of an acquisition by Westinghouse, after a whistleblower complained executives exerted "inappropriate pressure" over accounting at the US-based company. The firm's Tokyo-listed stock dropped more than 13 percent at one stage before paring losses to sit at 205.9 ($1.80) by the lunch break, down 10.4 percent and extending Tuesday's eight percent selloff. The crisis comes less than two years after the conglomerate, which makes everything from trains to memory chips, suffered an embarrassing profit-padding scandal that involved bosses pressuring subordinates to cover up weak earnings. The company's stock has lost 60 percent since that crisis came to light in April 2015. "There is no room for optimism," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities. "The share price is still higher than the low at the time of the accounting scandal when investors were pricing in the possibility of its shares being taken off the exchange," he told AFP, adding that the firm was likely working to avoid an embarrassing delisting. "Its corporate governance has been called into question and I cannot rule out the possibility that investors are pricing that scenario in" again. Numerous questions On Tuesday, Toshiba warned that any improper accounting at its US nuclear power unit could affect its latest earnings. "The questions surrounding Toshiba are so numerous, where do you even begin," Masahiko Ishino, an analyst at Tokai Tokyo Securities, told Bloomberg News. "Investors want to know what will happen to its nuclear and chip businesses, whether elevator operations and some of Toshiba's listed subsidiaries will be sold off. There is also the question of why the nuclear writedown happened in the first place. The industrial giant once touted its overseas nuclear business as a future growth driver, filling a hole left after the 2011 Fukushima crisis slammed the brakes on new atomic projects in Japan. But it turned out to be a bad bet and on Tuesday it confirmed speculation it would dramatically reduce its nuclear ambitions overseas. It said it would stop building new atomic power plants, but would continue making related equipment. And company officials have approached South Korean utility Korea Electric Power Corp about buying part of its stake in British nuclear joint venture NuGeneration. The atomic strategy U-turn comes as Toshiba undergoes a major restructuring following its 2015 accounting scandal. It has sold its medical devices unit to camera and copier maker Canon and most of its appliance business to China's Midea Group while it is also moving to spin off its prized memory chip unit. (AFP)

Toshiba shares plunge again as it warns of $6.2 bn writedown

Shares in Toshiba dived more than nine percent Tuesday after the huge conglomerate delayed the release of financial results expected to include billions of dollars in losses tied to its ailing US nuclear power unit.

The firm plunged 9.45 percent to 226.2 yen ($2) after it surprised markets by saying its nine-month earnings report had &quot;not yet become available&quot;.

A spokeswoman declined to elaborate and it was not clear when the figures, originally due around noon local time (0300 GMT), would be released.

It was also unclear if company executives would still hold a previously scheduled news briefing later in the day.&nbsp;

The sell-off extended morning losses that were sparked by a report in Japan&#39;s Nikkei business daily, which said it is going to issue a warning to shareholders that its future is in jeopardy.

Shares in the firm have almost halved since late December when Toshiba first flagged huge losses in its atomic unit.

Earlier reports said Toshiba -- one of Japan&#39;s best-known firms and a cornerstone of its post-war industrial rise -- was likely to log a net loss of more than $4.0 billion in the April-December period.&nbsp;

The shortfall is linked to losses reportedly topping $6.0 billion at the troubled US nuclear business, once touted as filling a hole left after the 2011 Fukushima crisis slammed the brakes on new atomic projects in Japan.

The reported loss is related to problems with the value placed on a deal involving the purchase of a nuclear services company by Toshiba subsidiary Westinghouse Electric.

The Nikkei report said Toshiba&#39;s mounting losses would force the company to warn investors over its ability to continue as a going concern in its current form.

It would be the first such warning by the group since its birth from a 1939 merger, according to the Nikkei.

Some other reports have said Toshiba chairman Shigenori Shiga and Danny Roderick -- an executive and the former head of Westinghouse Electric -- are expected to step down.

There is speculation that Toshiba will dramatically reduce its nuclear operations and stop building new atomic power plants, but would continue designing and making reactors and other components.

Toshiba has approached South Korean utility Korea Electric Power Corp. about selling part of its stake in British nuclear joint venture NuGeneration.

In April-December 2015, Toshiba reported a 479 billion yen ($4.2 billion) net loss due largely to an embarrassing profit-padding scandal, in which bosses for years systematically pushed subordinates to cover up weak financial results.

The engineering conglomerate, which makes everything from trains to memory chips, is undergoing a major restructuring after the accounting scandal and the losses in its nuclear business.

The company has already sold its medical devices unit to Canon and most of its appliance business to China&#39;s Midea Group.

It is also moving to spin off its memory chip business to repair its battered balance sheet.&nbsp;

(AFP)

The firm's shares plunged 9.45% after it surprised markets by saying its nine-month earnings report had 'not yet become available'

Shares in Toshiba dived more than nine percent Tuesday after the huge conglomerate delayed the release of financial results expected to include billions of dollars in losses tied to its ailing US nuclear power unit. The firm plunged 9.45 percent to 226.2 yen ($2) after it surprised markets by saying its nine-month earnings report had "not yet become available". A spokeswoman declined to elaborate and it was not clear when the figures, originally due around noon local time (0300 GMT), would be released. It was also unclear if company executives would still hold a previously scheduled news briefing later in the day. The sell-off extended morning losses that were sparked by a report in Japan's Nikkei business daily, which said it is going to issue a warning to shareholders that its future is in jeopardy. Shares in the firm have almost halved since late December when Toshiba first flagged huge losses in its atomic unit. Earlier reports said Toshiba -- one of Japan's best-known firms and a cornerstone of its post-war industrial rise -- was likely to log a net loss of more than $4.0 billion in the April-December period. The shortfall is linked to losses reportedly topping $6.0 billion at the troubled US nuclear business, once touted as filling a hole left after the 2011 Fukushima crisis slammed the brakes on new atomic projects in Japan. The reported loss is related to problems with the value placed on a deal involving the purchase of a nuclear services company by Toshiba subsidiary Westinghouse Electric. The Nikkei report said Toshiba's mounting losses would force the company to warn investors over its ability to continue as a going concern in its current form. It would be the first such warning by the group since its birth from a 1939 merger, according to the Nikkei. Some other reports have said Toshiba chairman Shigenori Shiga and Danny Roderick -- an executive and the former head of Westinghouse Electric -- are expected to step down. There is speculation that Toshiba will dramatically reduce its nuclear operations and stop building new atomic power plants, but would continue designing and making reactors and other components. Toshiba has approached South Korean utility Korea Electric Power Corp. about selling part of its stake in British nuclear joint venture NuGeneration. In April-December 2015, Toshiba reported a 479 billion yen ($4.2 billion) net loss due largely to an embarrassing profit-padding scandal, in which bosses for years systematically pushed subordinates to cover up weak financial results. The engineering conglomerate, which makes everything from trains to memory chips, is undergoing a major restructuring after the accounting scandal and the losses in its nuclear business. The company has already sold its medical devices unit to Canon and most of its appliance business to China's Midea Group. It is also moving to spin off its memory chip business to repair its battered balance sheet. (AFP)

Toshiba stocks nosedive after it delays release of financial results

Asian markets were on tenterhooks on Wednesday as early state exit polls in the US&nbsp;presidential election showed wins for both candidates and no clear trend as yet, causing a nervous shift back to safe haven assets.

Asian stocks and US&nbsp;stock futures edged 0.5 per cent higher in volatile trade, while the Dollar slipped on the Yen and Euro as investors hedged against the risk of a shock win by Republican Donald Trump.

Both Trump and Democrat Hillary Clinton scored early victories in their bitter race, with Trump winning as expected in conservative Indiana, Kentucky and West Virginia and Clinton capturing liberal Vermont.

The victories in the four states were long predicted and not especially significant in a national race where opinion polls show Clinton has an edge.

Markets have tended to favour Clinton as a status quo candidate who would be considered a safe pair of hands at home on the world stage.

&quot;In contrast, a Trump victory would trigger massive uncertainty that would likely undermine risk assets at least initially, which in turn could preclude a Fed rate hike this year,&quot; warned Michelle Girard, chief US&nbsp;economist at RBS.

Much of the action was in the currency markets where the Mexican peso has become a touchstone for sentiment on the election as Trump&#39;s trade policies are seen as damaging to its export-heavy economy.

The dollar jumped 1.2 per cent on the peso as the early results were reported, after hitting its lowest in two months overnight.

The dollar backtracked 0.7 per cent on the safe haven yen to 104.48 Yen, while the Euro rose to $1.1048. Against a basket of currencies, the Dollar was off 0.2 per cent at 97.678.

Yields on 10-year US&nbsp;Treasury yields inched down to 1.849 per cent, after touching a high of 1.876 per cent.

In share markets, MSCI&#39;s broadest index of Asia-Pacific stocks outside Japan was still up 0.4 per cent, but the Nikkei rose 0.8 per cent.

Wall Street had added somewhat to Monday&#39;s stellar gains with the Dow ending up 0.4 per cent. The S&amp;P 500 gained 0.38 per cent and the Nasdaq 0.53 per cent.

Shane Oliver, head of investment strategy at fund manager AMP Capital, said the most positive outcome for US&nbsp;equities would be a Clinton win with a split Congress.

&quot;Historically, since 1927 US&nbsp;total share returns have been strongest at an average 16.7 per cent per year when there has been a Democrat president and Republican control of the House, the Senate or both.&quot;

The return only averaged 8.9 per cent when the Republicans controlled the presidency and Congress.

In commodity markets, gold edged up to $1,278.46 an ounce as the Dollar eased.

Oil took a knock from data showing a surprisingly large rise in crude stocks. US&nbsp;crude eased 19 cents to $44.79, while Brent was untraded early in the Asian day.

(Reuters)

Asian stocks and US stock futures edged 0.5 per cent higher in volatile trade, while the Dollar slipped on the Yen and Euro

Asian markets were on tenterhooks on Wednesday as early state exit polls in the US presidential election showed wins for both candidates and no clear trend as yet, causing a nervous shift back to safe haven assets. Asian stocks and US stock futures edged 0.5 per cent higher in volatile trade, while the Dollar slipped on the Yen and Euro as investors hedged against the risk of a shock win by Republican Donald Trump. Both Trump and Democrat Hillary Clinton scored early victories in their bitter race, with Trump winning as expected in conservative Indiana, Kentucky and West Virginia and Clinton capturing liberal Vermont. The victories in the four states were long predicted and not especially significant in a national race where opinion polls show Clinton has an edge. Markets have tended to favour Clinton as a status quo candidate who would be considered a safe pair of hands at home on the world stage. "In contrast, a Trump victory would trigger massive uncertainty that would likely undermine risk assets at least initially, which in turn could preclude a Fed rate hike this year," warned Michelle Girard, chief US economist at RBS. Much of the action was in the currency markets where the Mexican peso has become a touchstone for sentiment on the election as Trump's trade policies are seen as damaging to its export-heavy economy. The dollar jumped 1.2 per cent on the peso as the early results were reported, after hitting its lowest in two months overnight. The dollar backtracked 0.7 per cent on the safe haven yen to 104.48 Yen, while the Euro rose to $1.1048. Against a basket of currencies, the Dollar was off 0.2 per cent at 97.678. Yields on 10-year US Treasury yields inched down to 1.849 per cent, after touching a high of 1.876 per cent. In share markets, MSCI's broadest index of Asia-Pacific stocks outside Japan was still up 0.4 per cent, but the Nikkei rose 0.8 per cent. Wall Street had added somewhat to Monday's stellar gains with the Dow ending up 0.4 per cent. The S&P 500 gained 0.38 per cent and the Nasdaq 0.53 per cent. Shane Oliver, head of investment strategy at fund manager AMP Capital, said the most positive outcome for US equities would be a Clinton win with a split Congress. "Historically, since 1927 US total share returns have been strongest at an average 16.7 per cent per year when there has been a Democrat president and Republican control of the House, the Senate or both." The return only averaged 8.9 per cent when the Republicans controlled the presidency and Congress. In commodity markets, gold edged up to $1,278.46 an ounce as the Dollar eased. Oil took a knock from data showing a surprisingly large rise in crude stocks. US crude eased 19 cents to $44.79, while Brent was untraded early in the Asian day. (Reuters)

Dollar spooked in Asia as US polls too close to call

Traders bought the yen and dumped the South Korean won today as financial markets were jolted by news that North Korea conducted another nuclear test, reigniting geopolitical tensions. 
 
Pyongyang later said the test had confirmed that it could mount a nuclear warhead on a rocket, hours after it carried out its fifth atomic explosion. 
 
The news aggravated geopolitical tensions in the region as world powers including China struggle to rein in the country&#39;s erratic behaviour. 
 
In response, investors bought the Japanese yen, which is widely seen as a safe investment in times of turmoil and uncertainty.&nbsp; 
 
In Tokyo afternoon trading, the dollar weakened to 102.09 yen from 102.48 yen in New York, while the euro slipped to 115.15 yen from 115.40 yen. 
 
The won&nbsp;took a hit, sinking about 0.7 per cent against the greenback on the news, while Seoul&#39;s KOSPI share index dropped more than one percent. 
 
&quot;We can probably say that the market is reacting a little to signs North Korea conducted a nuclear test,&quot; Soichiro Monji, general manager for the economic research department at Daiwa SB Investments, told Bloomberg News. 
 
&quot;We&#39;re not seeing a huge amount of trading on this news, but it does contribute to a slight risk-off mood. The yen is strengthening, and shares aren&#39;t managing to rise.&quot; 
 
In other trading, the euro rose to $1.1279 from $1.1261, after the European Central Bank on Thursday left its stimulus policies unchanged. 
 
Markets have been focused on central bank policy measures with hopes fading for a September US rate hike and as the Bank of Japan meets later this month. 
 
&quot;In order for the dollar to bounce back, rate-hike expectations have to heighten,&quot; said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank in New York.&nbsp; 
 
&quot;The market will need fresh factors and that may not come until retail sales next week.&quot; 
 
(AFP) 
 
&nbsp;

Investors started buying the Yen, seen as a safe investment in times of uncertainty, after North Korea's 5th nuclear test today

Traders bought the yen and dumped the South Korean won today as financial markets were jolted by news that North Korea conducted another nuclear test, reigniting geopolitical tensions. Pyongyang later said the test had confirmed that it could mount a nuclear warhead on a rocket, hours after it carried out its fifth atomic explosion. The news aggravated geopolitical tensions in the region as world powers including China struggle to rein in the country's erratic behaviour. In response, investors bought the Japanese yen, which is widely seen as a safe investment in times of turmoil and uncertainty. In Tokyo afternoon trading, the dollar weakened to 102.09 yen from 102.48 yen in New York, while the euro slipped to 115.15 yen from 115.40 yen. The won took a hit, sinking about 0.7 per cent against the greenback on the news, while Seoul's KOSPI share index dropped more than one percent. "We can probably say that the market is reacting a little to signs North Korea conducted a nuclear test," Soichiro Monji, general manager for the economic research department at Daiwa SB Investments, told Bloomberg News. "We're not seeing a huge amount of trading on this news, but it does contribute to a slight risk-off mood. The yen is strengthening, and shares aren't managing to rise." In other trading, the euro rose to $1.1279 from $1.1261, after the European Central Bank on Thursday left its stimulus policies unchanged. Markets have been focused on central bank policy measures with hopes fading for a September US rate hike and as the Bank of Japan meets later this month. "In order for the dollar to bounce back, rate-hike expectations have to heighten," said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank in New York. "The market will need fresh factors and that may not come until retail sales next week." (AFP)

Yen up, won hit as North Korea atomic test jolts markets

The Yen rose today as Bank of Japan chief, Haruhiko Kuroda left the markets guessing the central bank&#39;s policy plans 
 
Japan&#39;s top banker promised to release fresh measures if necessary while addressing a business seminar in Tokyo.&nbsp; 
 
He held off talks of scaling back on BOJ&#39;s easing measures and recognised the drawback of the bank&#39;s negative rate policy.&nbsp; 
 
It was designed to encourage lending but has hurt commercial banks&#39; profits. 
 
He&nbsp;however, gave some solid hints about the central bank&#39;s plans to oppose a slowing economy. 
 
Meanwhile, in Tokyo afternoon trade the Dollar fell to 103.44 Yen from 103.99 Yen in New York, while the Euro came down to 115.58 Yen from 116.02 Yen in US trade on Friday. 
 
The Bank of Japan&#39;s next policy meeting is September 20. 
 
Bloomberg News quoted Yousuke Hosokawa, head of foreign-exchange sales at Sumitomo Mitsui Trust Bank,&quot;While Kuroda denied any speculation about tapering, he spurred some disappointment for those looking for clear clues on policy action this month.&quot; 
 
&quot;With markets losing direction after the US jobs data fell short of adding fuel to US rate hike expectations this month, Kuroda&rsquo;s comments were neither supportive for aggressive selling nor for buying of the Dollar,&quot; he said. 
 
The US Labor department on Friday, released US jobs data figures, revealing the economy created 151,000 net jobs in August, lower than the expected 180,000. 
 
Analysts were confused on whether the number was enough for the US Federal Reserve to raise interest rates this month. 
 
The Euro ticked up to $1.1172 from $1.1156 AFP reported. 
 
The Dollar weakened against most other Asia-Pacific currencies, including the Indonesian Rupiah, Taiwan Dollar and South Korean Won. 
 
(WION with inputs from AFP) 
 
 
 
 
&nbsp;

While the Yen rose the Dollar weakened against other Asia-Pacific currencies

The Yen rose today as Bank of Japan chief, Haruhiko Kuroda left the markets guessing the central bank's policy plans Japan's top banker promised to release fresh measures if necessary while addressing a business seminar in Tokyo. He held off talks of scaling back on BOJ's easing measures and recognised the drawback of the bank's negative rate policy. It was designed to encourage lending but has hurt commercial banks' profits. He however, gave some solid hints about the central bank's plans to oppose a slowing economy. Meanwhile, in Tokyo afternoon trade the Dollar fell to 103.44 Yen from 103.99 Yen in New York, while the Euro came down to 115.58 Yen from 116.02 Yen in US trade on Friday. The Bank of Japan's next policy meeting is September 20. Bloomberg News quoted Yousuke Hosokawa, head of foreign-exchange sales at Sumitomo Mitsui Trust Bank,"While Kuroda denied any speculation about tapering, he spurred some disappointment for those looking for clear clues on policy action this month." "With markets losing direction after the US jobs data fell short of adding fuel to US rate hike expectations this month, Kuroda’s comments were neither supportive for aggressive selling nor for buying of the Dollar," he said. The US Labor department on Friday, released US jobs data figures, revealing the economy created 151,000 net jobs in August, lower than the expected 180,000. Analysts were confused on whether the number was enough for the US Federal Reserve to raise interest rates this month. The Euro ticked up to $1.1172 from $1.1156 AFP reported. The Dollar weakened against most other Asia-Pacific currencies, including the Indonesian Rupiah, Taiwan Dollar and South Korean Won. (WION with inputs from AFP)

Bank of Japan chief leaves market confused over policy plans

The pound was sitting at three-decade lows Monday morning as currency markets were left reeling from Britain`s shock decision to leave the European Union. 
 
Sterling collapsed to its lowest level since 1985 on Friday ahead of official referendum results as early numbers suggested that the vote would surprise markets, which had widely expected voters to opt for the status quo. 
 
On Monday morning in Tokyo, the pound was at $1.3379, off $1.3670 in New York but still above $1.3229, its lowest point earlier Friday. 
 
&quot;People are finding it difficult to comprehend what Brexit implies for the future -- we don`t know yet what the magnitude of the shock will be,&quot; Steven Barrow, head of Group-of-10 strategy at Standard Bank Group in London, told Bloomberg News. 
 
The euro bought 82.07 pence against 81.31 pence, while the dollar ticked up to 102.34 Yen, from 102.21 yen on Friday. 
 
Japan`s currency surged Friday as traders scooped up the safe-haven unit, seen as a safe bet in times of turmoil. 
 
But the rally in the Yen, which had already been on the upswing before the vote, poses a threat to profits at major Japanese exporters. 
 
And Britain`s vote to leave the EU could have significant consequences for more than 1,000 Japanese firms that operate in Britain -- many of which see it as a staging point for dealing in Europe. 
 
&quot;It was very regrettable,&quot; Sadayuki Sakakibara, chairman of Keidanren, Japan`s biggest business lobby, said of the result on Friday. 
 
Japanese Prime Minister Shinzo Abe held an emergency meeting with top officials Monday morning to discuss Brexit and how to deal with the market fallout. 
 
Ahead of the meeting, Abe pointed to unspecified measures to smooth out any impact on the world`s number three economy.&nbsp; 
 
&quot;We will make thorough efforts so that (Brexit) will not negatively affect Japan`s economy and the business of small to medium-sized firms,&quot; he said, without elaborating. 
 
On Friday, Finance Minister Taro Aso pledged that Tokyo was ready to adopt strong measures to address wild volatility on financial markets. 
 
His remarks hinted at a possible market intervention to cool the surging yen. 
 
Recently, Japanese officials, including Aso, have been warning over the Yen&#39;s rise and said an intervention was possible. However, such a move could put Japan on a collision course with its G20 counterparts, who have agreed to hold off stepping into forex markets to manipulate their currencies. 
 
Officials from the Bank of Japan (BoJ) were at the meeting on Monday. The BoJ has said it was ready to lean on a currency swap agreement it has with other major central banks to supply liquidity for markets in an effort to counter the wild volatility. 
 
(AFP)

Japanese Prime Minister Shinzo Abe held an emergency meeting with top officials Monday morning to review Brexit and the market fallout

The pound was sitting at three-decade lows Monday morning as currency markets were left reeling from Britain`s shock decision to leave the European Union. Sterling collapsed to its lowest level since 1985 on Friday ahead of official referendum results as early numbers suggested that the vote would surprise markets, which had widely expected voters to opt for the status quo. On Monday morning in Tokyo, the pound was at $1.3379, off $1.3670 in New York but still above $1.3229, its lowest point earlier Friday. "People are finding it difficult to comprehend what Brexit implies for the future -- we don`t know yet what the magnitude of the shock will be," Steven Barrow, head of Group-of-10 strategy at Standard Bank Group in London, told Bloomberg News. The euro bought 82.07 pence against 81.31 pence, while the dollar ticked up to 102.34 Yen, from 102.21 yen on Friday. Japan`s currency surged Friday as traders scooped up the safe-haven unit, seen as a safe bet in times of turmoil. But the rally in the Yen, which had already been on the upswing before the vote, poses a threat to profits at major Japanese exporters. And Britain`s vote to leave the EU could have significant consequences for more than 1,000 Japanese firms that operate in Britain -- many of which see it as a staging point for dealing in Europe. "It was very regrettable," Sadayuki Sakakibara, chairman of Keidanren, Japan`s biggest business lobby, said of the result on Friday. Japanese Prime Minister Shinzo Abe held an emergency meeting with top officials Monday morning to discuss Brexit and how to deal with the market fallout. Ahead of the meeting, Abe pointed to unspecified measures to smooth out any impact on the world`s number three economy. "We will make thorough efforts so that (Brexit) will not negatively affect Japan`s economy and the business of small to medium-sized firms," he said, without elaborating. On Friday, Finance Minister Taro Aso pledged that Tokyo was ready to adopt strong measures to address wild volatility on financial markets. His remarks hinted at a possible market intervention to cool the surging yen. Recently, Japanese officials, including Aso, have been warning over the Yen's rise and said an intervention was possible. However, such a move could put Japan on a collision course with its G20 counterparts, who have agreed to hold off stepping into forex markets to manipulate their currencies. Officials from the Bank of Japan (BoJ) were at the meeting on Monday. The BoJ has said it was ready to lean on a currency swap agreement it has with other major central banks to supply liquidity for markets in an effort to counter the wild volatility. (AFP)

Pound weak on post-Brexit fallout

Traders said central banks of India and Korea sold dollars to curb fall of their currencies

At least two Asian central banks were suspected of intervening in their currency markets on Friday, according to traders, as global financial markets went into a tailspin after Britain voted to leave the European Union in a historic vote. Multiple traders said the Bank of Korea was thought to have sold dollars to curb the won's fall as the local currency dropped, while the Reserve Bank of India likely sold dollars through state-owned banks to prevent the rupee from falling further. An official at the Bank of Korea declined to comment, but South Korea's Vice Finance Minister Choi Sang-Mok said the government will make all efforts to minimize the impact from Brexit. "Regarding foreign exchange trade, we will use all usable options to stabilize markets, including launching smoothing operations,” he said. A senior policymaker aware of the Reserve Bank of India's plans for Brexit-related market management said that the central bank is "prepared to deal with any volatility." Separately, Japan's finance minister Taro Aso said he is carefully monitoring market developments and will respond as and when needed in the currency markets. A statement from the G7 group of leading industrial economies was expected on Friday. The question will be whether there is any coordinated intervention to ease monetary policy by global central banks, though room for maneuver is modest. "The ECB has few additional options left, yet it could announce more targeted purchases of peripheral sovereign bonds in the case investors start betting against the euro again,” said Markus Schomer, chief economist at Pinebridge Investments. The yen surging to its strongest levels against the dollar in two-and-a-half years, briefly breaking through the 100-yen-to-the-dollar level. Sterling suffered its biggest one-day fall of more than 9 percent against the dollar, hitting its lowest level in three decades. Japanese stocks sank, pushing the Nikkei 225 index down more than 8 percent to its lowest since October 2014, and a similar decline in the Nikkei futures triggered circuit breakers. Money markets were volatile. Fed fund futures effectively moved to pricing in a tiny U.S. rate cut from a rate increase in July. Japan's Deputy Chief Cabinet Secretary Hiroshige Seko told reporters the government was worried about market moves, saying sudden shifts because of the British vote were undesirable. The yen's strength due to its safe-haven status has been a frustration for Japanese authorities, who want a weaker currency to support exports and the economy. But they have been unable to garner support for intervention to weaken it from other major economies, most notably the United States. The 100-yen-per-dollar level has been seen as a pivotal point to test the patience of Japan's monetary officials on intervention. Morgan Stanley expects the dollar to fall to 90 yen as investors seek the Japanese currency out as a relative safe haven, and a further 15-20 percent downside for European equities from current levels. The Australian dollar, often sold off in times of heightened market stress, fell heavily against the dollar and the yen. Traditional stress markers such as interbank dollar funding rates in Singapore and Hong Kong were broadly steady, but treasury bill and front end government bond yields fell. "Because of this matter, we have made preparation in many aspects. We have reserved sufficient liquidity and we are able to handle in different situations," Hong Kong Financial Secretary John Tsang told reporters in the airport on Friday morning before he flew out to Beijing. The Hong Kong Monetary Authority has asked banks to maintain ample cash conditions with them. No unscheduled monetary liquidity injection operations have been taken so far, according to an HKMA spokeswoman. The Singapore stock exchange played its part in trying to reduce volatility by raising margins on Nikkei futures traded on its exchange. The People's Bank of China injected 170 billion yuan ($25.9 billion) on Friday, taking the net injection for the week to 340 billion yuan, the biggest in two months. But that was seen more about averting a cash squeeze at the end of the half year next week, as has happened previously, rather than responding to the Brexit vote. Still, the yuan fell to its weakest level against the U.S. dollar since January 2011 while its offshore counterpart slipped to its weakest level in more than four months. The Philippines' central bank said on Friday it was closely monitoring the foreign exchange market and remains prepared to act to ensure orderly transactions and smooth volatility. (Reuters)

Asian central banks, policymakers wade in to calm markets after Brexit vote

Asian shares edged up and Sterling stood close to its peak for the year on Thursday, as investors were cautiously optimistic that British voters would opt to remain in the European Union at a referendum later in the session.&nbsp; 
 
Two opinion polls published late on Wednesday, a few hours before voters were due to begin to cast their votes, showed the &quot;Remain&quot; camp gaining momentum in the closely divided campaign. 
 
MSCI&#39;s broadest index of Asia-Pacific shares outside Japan edged up 0.2 per cent in early trading, shrugging off modest overnight losses on Wall Street. 
 
Japan&#39;s Nikkei share average rose 0.3 per cent. 
 
&quot;Markets seem to have almost entirely priced in a &#39;Remain&#39; vote win, meaning that the market moves and volatility around the vote may be far less than many had been expected,&quot; wrote Angus Nicholson, market analyst at IG in Melbourne. 
 
&quot;Nonetheless, markets are still incredibly nervous and some sharp market moves are likely over the next 24 hours,&quot; he said. 
 
Sterling rose to $1.4847, its highest against the dollar in 2016, and was last up 0.6 per cent at $1.4798. 
 
The perceived safe-haven Yen also slipped on receding fears of the market turmoil that would likely follow if Britain were to pull out of the EU. 
 
The dollar added 0.2 per cent to 104.69 Yen , while the euro gained 0.5 percent to 118.54 yen . 
 
The euro rose 0.2 per cent to $1.1322 , while the dollar index, which tracks the greenback against a basket of six rival currencies, slipped 0.1 per cent to 93.582. 
 
On the US data front, home resales rose to a more than nine-year high last month against a backdrop of historically low mortgage rates, adding to recent upbeat second quarter data. 
 
Crude oil prices rose after settling down more than 1 per cent on Wednesday after the U.S. government reported a smaller-than-expected inventory drawdown. 
 
Brent added 0.7 per cent to $50.23 a barrel after shedding 1.5 per cent on Wednesday, while U.S. crude was up 0.8 per cent at $49.53 after giving up 1.4 per cent in the previous session. 
 
Spot gold plumbed a two-week low of $1,260.36 an ounce and was last down 0.4 per cent at $1,261.24. 
 
(Reuters) 
&nbsp;

Sterling rose to its highest against Dollar in 2016 and Yen slipped on diminishing fears of a market turmoil that would follow if Britain were to pull out of EU

Asian shares edged up and Sterling stood close to its peak for the year on Thursday, as investors were cautiously optimistic that British voters would opt to remain in the European Union at a referendum later in the session. Two opinion polls published late on Wednesday, a few hours before voters were due to begin to cast their votes, showed the "Remain" camp gaining momentum in the closely divided campaign. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 per cent in early trading, shrugging off modest overnight losses on Wall Street. Japan's Nikkei share average rose 0.3 per cent. "Markets seem to have almost entirely priced in a 'Remain' vote win, meaning that the market moves and volatility around the vote may be far less than many had been expected," wrote Angus Nicholson, market analyst at IG in Melbourne. "Nonetheless, markets are still incredibly nervous and some sharp market moves are likely over the next 24 hours," he said. Sterling rose to $1.4847, its highest against the dollar in 2016, and was last up 0.6 per cent at $1.4798. The perceived safe-haven Yen also slipped on receding fears of the market turmoil that would likely follow if Britain were to pull out of the EU. The dollar added 0.2 per cent to 104.69 Yen , while the euro gained 0.5 percent to 118.54 yen . The euro rose 0.2 per cent to $1.1322 , while the dollar index, which tracks the greenback against a basket of six rival currencies, slipped 0.1 per cent to 93.582. On the US data front, home resales rose to a more than nine-year high last month against a backdrop of historically low mortgage rates, adding to recent upbeat second quarter data. Crude oil prices rose after settling down more than 1 per cent on Wednesday after the U.S. government reported a smaller-than-expected inventory drawdown. Brent added 0.7 per cent to $50.23 a barrel after shedding 1.5 per cent on Wednesday, while U.S. crude was up 0.8 per cent at $49.53 after giving up 1.4 per cent in the previous session. Spot gold plumbed a two-week low of $1,260.36 an ounce and was last down 0.4 per cent at $1,261.24. (Reuters)

Asia stocks, Sterling rise as Brexit anxiety abates

<div style="text-align: justify;">If Britons vote to take their country out of the European Union on June 23, no corner of the global financial market complex will emerge unscathed. 
The invisible thread that links assets as diverse as gold, bank stocks, the Japanese Yen and government bonds would be yanked sharply by Brexit, an event the Bank of England said on Thursday risks &quot;adverse spill-overs to the global economy&quot;. 
With global interest rates and bond yields the lowest on record, central banks running low on crisis-fighting tools and the post-2008 economic recovery flagging, that thread could quickly unravel, with serious consequences for all markets.&nbsp; 
So why will the will of one country&#39;s people in one referendum have such a profound impact on global markets? 
The answer is partly how inter-connected global markets are, and partly timing - the world economic cycle is already very long in the tooth and central banks have far fewer options open to them after nearly a decade of extraordinary policy support. 
Interest rates, yields 
 
Global interest rates are their lowest for 5,000 years, according to Bank of America, but central banks could still cut them further. That could mean the US&nbsp;Federal Reserve reversing its slow-starting tightening cycle, and European Central Bank and Bank of Japan rates going deeper into negative territory. 
Lower rates would also depress bond yields even further, tightening the screw on central and commercial banks. 
 
Over $8 trillion worth of sovereign bonds already carry a negative yield, according to JP Morgan. This means holders of Japanese, German and Swiss debt are paying these governments for the privilege of lending to them, in some cases out to 20 years. 
 
They are willing to accept they will not get all their money back. Even deeper negative yields would increase these losses, raising further doubt that these are truly &quot;safe haven&quot; assets. 
 
But the immediate economic and political uncertainty after a Brexit vote would likely be so great that demand for these bonds would rise anyway, pulling yields even lower. Yield curves, the difference between short- and longer-dated bond borrowing costs, would flatten further. 
 
They are already their flattest for years around the developed world, meaning the premium investors expect for holding longer-dated bonds is shrinking. This is often an ominous signal of low inflation or deflation, and slowing economic growth or possibly recession. 
 
If &quot;core&quot; bond yields would likely fall, yields on lower-rated and riskier bonds would likely rise, widening the spread between the two. This would increase the financing pressure on a wide range of companies around the world and governments in euro zone &quot;periphery&quot; countries like Greece, Italy and Spain. 
 
Banks - Central and Commercial 
 
Flat yield curves are bad news for banks, who make money from borrowing short-term at low rates and lending longer-term at higher rates. Financial stocks have been hit hard this year as the curve flattening has accelerated. 
 
Euro zone banks are down 30 per cent this year, Japanese banks 35 per cent, UK banks 20 per cent, and US banks 10 per cent. 
 
Banks are also being squeezed by negative deposit rates. The ECB, Bank of Japan and Swiss National Bank all charge banks for depositing cash. 
 
It may even become cheaper for banks to put billions of yen, Euros or Francs of their customers&#39; cash in vaults- a possibility German lender Commerzbank is examining. 
 
As for central banks, any move deeper into the uncharted world of negative interest rates would be taken reluctantly. 
 
In the case of the ECB, declining yields would further cut the amount of bonds eligible for purchase as part of its quantitative easing stimulus programme. That would make its inflation target of just under 2 per cent much harder to achieve, in turn putting its credibility under even greater scrutiny. 
 
Financial Planning 
 
Just as the 2007-08 financial crisis was caused by unprecedented stress in the banking system, analysts fear Brexit fallout could again threaten to block the global financial system&#39;s plumbing. 
 
Banks have recovered from 2007-08, but stresses are already appearing in more obscure pockets of dollar-based FX and rates markets that are hitting levels more associated with periods of crisis. The premium for Dollars over Yen in the cross currency basis market is its highest in years. 
 
Spreads between Libor rates and overnight index swap (OIS) rates, broadly a measure of investors&#39; perception of credit risk in the banking system, are also widening. In normal conditions, Libor/OIS spreads should be virtually zero. 
 
Stocks 
 
World stocks are in their longest bull run in history that began on March 9, 2009. But Wall Street&#39;s peak was reached over a year ago, profit growth has slumped, and companies are reluctant to reinvest their record cash piles. 
 
European stocks are down 13 per cent this year, Japan down 20 per cent, and Wall Street is flat. Would they be able to withstand the political, economic and investment shock a Brexit would likely deliver, especially with risk appetite so fragile? 
 
Currencies 
 
Like 2008, a vote for Brexit would almost certainly increase demand for the pre-eminent currency in global trade, banking and financial market trading: the Dollar. 
 
Dollar credit to non-US banks stands at almost $10 trillion, according to the Bank for International Settlements, of which $3.3 trillion is in emerging markets. A stronger Dollar will increase the overall debt burden for these companies, and many emerging market countries, who would be forced to draw down their FX reserves to counter the expected capital outflow and downward pressure on their currencies. 
 
Japan&#39;s Yen, another safe-haven currency, would probably rise too, perhaps as much as 14 per cent, according to Goldman Sachs. This would not be welcome in Tokyo, where policymakers are struggling to kill off deflation once and for all, stoke inflation, reflate the economy and heal the banking system. A higher exchange rate would be damaging on all those fronts. 
 
(Reuters)</div>

World stocks are in their longest bull run in history that began on 9 March, 2009

If Britons vote to take their country out of the European Union on June 23, no corner of the global financial market complex will emerge unscathed. The invisible thread that links assets as diverse as gold, bank stocks, the Japanese Yen and government bonds would be yanked sharply by Brexit, an event the Bank of England said on Thursday risks "adverse spill-overs to the global economy". With global interest rates and bond yields the lowest on record, central banks running low on crisis-fighting tools and the post-2008 economic recovery flagging, that thread could quickly unravel, with serious consequences for all markets. So why will the will of one country's people in one referendum have such a profound impact on global markets? The answer is partly how inter-connected global markets are, and partly timing - the world economic cycle is already very long in the tooth and central banks have far fewer options open to them after nearly a decade of extraordinary policy support. Interest rates, yields Global interest rates are their lowest for 5,000 years, according to Bank of America, but central banks could still cut them further. That could mean the US Federal Reserve reversing its slow-starting tightening cycle, and European Central Bank and Bank of Japan rates going deeper into negative territory. Lower rates would also depress bond yields even further, tightening the screw on central and commercial banks. Over $8 trillion worth of sovereign bonds already carry a negative yield, according to JP Morgan. This means holders of Japanese, German and Swiss debt are paying these governments for the privilege of lending to them, in some cases out to 20 years. They are willing to accept they will not get all their money back. Even deeper negative yields would increase these losses, raising further doubt that these are truly "safe haven" assets. But the immediate economic and political uncertainty after a Brexit vote would likely be so great that demand for these bonds would rise anyway, pulling yields even lower. Yield curves, the difference between short- and longer-dated bond borrowing costs, would flatten further. They are already their flattest for years around the developed world, meaning the premium investors expect for holding longer-dated bonds is shrinking. This is often an ominous signal of low inflation or deflation, and slowing economic growth or possibly recession. If "core" bond yields would likely fall, yields on lower-rated and riskier bonds would likely rise, widening the spread between the two. This would increase the financing pressure on a wide range of companies around the world and governments in euro zone "periphery" countries like Greece, Italy and Spain. Banks - Central and Commercial Flat yield curves are bad news for banks, who make money from borrowing short-term at low rates and lending longer-term at higher rates. Financial stocks have been hit hard this year as the curve flattening has accelerated. Euro zone banks are down 30 per cent this year, Japanese banks 35 per cent, UK banks 20 per cent, and US banks 10 per cent. Banks are also being squeezed by negative deposit rates. The ECB, Bank of Japan and Swiss National Bank all charge banks for depositing cash. It may even become cheaper for banks to put billions of yen, Euros or Francs of their customers' cash in vaults- a possibility German lender Commerzbank is examining. As for central banks, any move deeper into the uncharted world of negative interest rates would be taken reluctantly. In the case of the ECB, declining yields would further cut the amount of bonds eligible for purchase as part of its quantitative easing stimulus programme. That would make its inflation target of just under 2 per cent much harder to achieve, in turn putting its credibility under even greater scrutiny. Financial Planning Just as the 2007-08 financial crisis was caused by unprecedented stress in the banking system, analysts fear Brexit fallout could again threaten to block the global financial system's plumbing. Banks have recovered from 2007-08, but stresses are already appearing in more obscure pockets of dollar-based FX and rates markets that are hitting levels more associated with periods of crisis. The premium for Dollars over Yen in the cross currency basis market is its highest in years. Spreads between Libor rates and overnight index swap (OIS) rates, broadly a measure of investors' perception of credit risk in the banking system, are also widening. In normal conditions, Libor/OIS spreads should be virtually zero. Stocks World stocks are in their longest bull run in history that began on March 9, 2009. But Wall Street's peak was reached over a year ago, profit growth has slumped, and companies are reluctant to reinvest their record cash piles. European stocks are down 13 per cent this year, Japan down 20 per cent, and Wall Street is flat. Would they be able to withstand the political, economic and investment shock a Brexit would likely deliver, especially with risk appetite so fragile? Currencies Like 2008, a vote for Brexit would almost certainly increase demand for the pre-eminent currency in global trade, banking and financial market trading: the Dollar. Dollar credit to non-US banks stands at almost $10 trillion, according to the Bank for International Settlements, of which $3.3 trillion is in emerging markets. A stronger Dollar will increase the overall debt burden for these companies, and many emerging market countries, who would be forced to draw down their FX reserves to counter the expected capital outflow and downward pressure on their currencies. Japan's Yen, another safe-haven currency, would probably rise too, perhaps as much as 14 per cent, according to Goldman Sachs. This would not be welcome in Tokyo, where policymakers are struggling to kill off deflation once and for all, stoke inflation, reflate the economy and heal the banking system. A higher exchange rate would be damaging on all those fronts. (Reuters)

Tracing global market thread that could be unraveled by Brexit

Asian stocks turned lower today and the Yen surged after the Bank of Japan (BOJ) refrained from taking further stimulus steps, hours after the Federal Reserve&#39;s (Fed&#39;s) own review had struck a cautious note on its policy outlook. 
 
The Dollar was already under pressure after the Fed left interest rates unchanged overnight and became slightly less hawkish. While signalling that it still expected two rate hikes this year, the Fed also said slower economic growth would crimp the pace of monetary policy tightening in future years. 
 
Spreadbetters expected Europe to follow Asia&#39;s lead and saw a lower open for Britain&#39;s Financial Times Stock Exchange (FTSE), Germany&#39;s Deutscher Aktienindex (DAX) and France&#39;s Cotation Assist?e en Continu (CAC).&nbsp; 
 
The BOJ kept monetary policy steady and stuck to its optimistic view of the economy today even as renewed yen rises and slumping stock prices threaten to derail a fragile economic recovery. 
 
While the BOJ&#39;s decision did not come as a big surprise, expectations that the central bank will take action next month increased. But for now uncertainty over whether Britain will vote to quit the European Union is strengthening the Yen because of the Japanese currency&#39;s safe-haven status. 
 
&quot;The Bank of Japan are in a pickle and more than most will be really hoping that the UK don&#39;t vote to &#39;leave,&#39; or USD/JPY will be trading below 100 Yen and they will have to do something amazingly punchy just to stabilise assets,&quot; wrote Chris Weston, chief market strategist at IG in Melbourne. 
 
&quot;On the other hand, even if the UK votes to &#39;remain&#39; and risk assets undergo some sort of relief rally, domestic inflation expectations shouldn&#39;t pick up greatly and they may need to ease in this scenario anyhow.&quot; 
Morgan Stanley Capital International&#39;s (MSCI) broadest index of Asia-Pacific shares outside Japan was last down 0.9 per cent.&nbsp; 
 
Japan&#39;s Nikkei hit a two-month intraday low and was last down 2.6 per cent. 
 
South Korea&#39;s Kospi lost 0.8 per cent and Hong Kong&#39;s Hang Seng dropped 1.9 per cent. 
 
On the whole, investors were still cautious on worries Britain may vote to leave the European Union, which saw US stocks fall for a fifth straight session overnight despite the Fed&#39;s subdued view on interest rates. 
 
While the US central bank kept policy steady as widely expected and lowered its economic projections, it did signal that it still planned to raise rates twice in 2016. 
 
However, the Fed&#39;s conviction appeared shakier with six of its 17 policymakers projecting just one increase this year. Only one Fed policymaker had done so when economic forecasts were last issued in March. 
 
&quot;Although the Fed&#39;s projection tout two rate hikes, a rate hike in July is highly unlikely, which makes it questionable whether the Fed can raise rates twice in its three policy meetings left by the end of year,&quot; said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank. 
 
The greenback was down 1.5 per cent at 104.400 Yen after hitting 104.320, its lowest since September 2014. 
 
The Yen also hit its highest level since January 2013 against the Euro and a four-year peak versus the Australian Dollar. 
 
The Euro inched up 0.1 per cent to $1.1272 after gaining 0.5 per cent overnight.&nbsp; 
 
The 10-year Treasury note yield slipped to a four-month trough of 1.545 per cent and added pressure on the Dollar. 
 
The recent bout of global risk aversion generated by Brexit fears have boosted safe-havens like government debt, sending the German and Japanese benchmark 10-year yields to record lows this week. 
 
The Brexit concerns also saw US crude oil fall 1 per cent to $47.52 a barrel, on track for a sixth straight day of losses. Brent crude was down 0.8 per cent at $48.59 a barrel. 
 
Spot gold touched $1,301.40 an ounce, highest since May 3, thanks to the Fed&#39;s seemingly more cautious approach to monetary tightening. Higher interest rates tend to diminish the appeal of non-yielding gold. 
(Reuters)

Bank of Japan's uncertainty over whether Britain would vote to quit the EU is strengthening the yen due to its safe-haven status

Asian stocks turned lower today and the Yen surged after the Bank of Japan (BOJ) refrained from taking further stimulus steps, hours after the Federal Reserve's (Fed's) own review had struck a cautious note on its policy outlook. The Dollar was already under pressure after the Fed left interest rates unchanged overnight and became slightly less hawkish. While signalling that it still expected two rate hikes this year, the Fed also said slower economic growth would crimp the pace of monetary policy tightening in future years. Spreadbetters expected Europe to follow Asia's lead and saw a lower open for Britain's Financial Times Stock Exchange (FTSE), Germany's Deutscher Aktienindex (DAX) and France's Cotation Assist?e en Continu (CAC). The BOJ kept monetary policy steady and stuck to its optimistic view of the economy today even as renewed yen rises and slumping stock prices threaten to derail a fragile economic recovery. While the BOJ's decision did not come as a big surprise, expectations that the central bank will take action next month increased. But for now uncertainty over whether Britain will vote to quit the European Union is strengthening the Yen because of the Japanese currency's safe-haven status. "The Bank of Japan are in a pickle and more than most will be really hoping that the UK don't vote to 'leave,' or USD/JPY will be trading below 100 Yen and they will have to do something amazingly punchy just to stabilise assets," wrote Chris Weston, chief market strategist at IG in Melbourne. "On the other hand, even if the UK votes to 'remain' and risk assets undergo some sort of relief rally, domestic inflation expectations shouldn't pick up greatly and they may need to ease in this scenario anyhow." Morgan Stanley Capital International's (MSCI) broadest index of Asia-Pacific shares outside Japan was last down 0.9 per cent. Japan's Nikkei hit a two-month intraday low and was last down 2.6 per cent. South Korea's Kospi lost 0.8 per cent and Hong Kong's Hang Seng dropped 1.9 per cent. On the whole, investors were still cautious on worries Britain may vote to leave the European Union, which saw US stocks fall for a fifth straight session overnight despite the Fed's subdued view on interest rates. While the US central bank kept policy steady as widely expected and lowered its economic projections, it did signal that it still planned to raise rates twice in 2016. However, the Fed's conviction appeared shakier with six of its 17 policymakers projecting just one increase this year. Only one Fed policymaker had done so when economic forecasts were last issued in March. "Although the Fed's projection tout two rate hikes, a rate hike in July is highly unlikely, which makes it questionable whether the Fed can raise rates twice in its three policy meetings left by the end of year," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank. The greenback was down 1.5 per cent at 104.400 Yen after hitting 104.320, its lowest since September 2014. The Yen also hit its highest level since January 2013 against the Euro and a four-year peak versus the Australian Dollar. The Euro inched up 0.1 per cent to $1.1272 after gaining 0.5 per cent overnight. The 10-year Treasury note yield slipped to a four-month trough of 1.545 per cent and added pressure on the Dollar. The recent bout of global risk aversion generated by Brexit fears have boosted safe-havens like government debt, sending the German and Japanese benchmark 10-year yields to record lows this week. The Brexit concerns also saw US crude oil fall 1 per cent to $47.52 a barrel, on track for a sixth straight day of losses. Brent crude was down 0.8 per cent at $48.59 a barrel. Spot gold touched $1,301.40 an ounce, highest since May 3, thanks to the Fed's seemingly more cautious approach to monetary tightening. Higher interest rates tend to diminish the appeal of non-yielding gold. (Reuters)

Yen surges after Bank of Japan refrains from offering more stimulus, Asian stocks down

Japanese stocks suffered their biggest daily percentage drop in a month today hit by a stronger Yen, while global concerns such as the upcoming Brexit vote and worries about Japan&#39;s fiscal policies sapped risk appetite. 
 
The Nikkei share average fell 2.3 per cent to 16,562.55, the biggest daily drop since May 2. 
 
The already pressured dollar sank further against the yen after Bank of Japan board member Takehiro Sato reiterated his view that the BOJ should consider its 2 per cent inflation target as a long-term goal with room for flexibility, rather than one with a rigid deadline. 
 
That meant the BOJ should modify its current massive asset buying programme, which was intended to be a short-term move aimed at shocking the public out of its deflationary mindset. 
 
The broader Topix declined 2.2 per cent to 1,331.81 and the JPX-Nikkei Index 400 fell 2.3 per cent to 12,004.95.

The Nikkei share average fell 2.3 per cent to 16,562.55, the biggest daily drop since May 2. The upcoming Brexit vote and worries about Japan's fiscal policies play their part

Japanese stocks suffered their biggest daily percentage drop in a month today hit by a stronger Yen, while global concerns such as the upcoming Brexit vote and worries about Japan's fiscal policies sapped risk appetite. The Nikkei share average fell 2.3 per cent to 16,562.55, the biggest daily drop since May 2. The already pressured dollar sank further against the yen after Bank of Japan board member Takehiro Sato reiterated his view that the BOJ should consider its 2 per cent inflation target as a long-term goal with room for flexibility, rather than one with a rigid deadline. That meant the BOJ should modify its current massive asset buying programme, which was intended to be a short-term move aimed at shocking the public out of its deflationary mindset. The broader Topix declined 2.2 per cent to 1,331.81 and the JPX-Nikkei Index 400 fell 2.3 per cent to 12,004.95.

Nikkei hit by strong Yen, suffers biggest drop in a month

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