Latest news with #Liberal Democratic Party
Reuters
a day ago
- Business
- Reuters
Yen gains broadly as Japan's Ishiba stays on; dollar weakens
NEW YORK, July 21 (Reuters) - The yen climbed across the board on Monday after beleaguered Japanese Prime Minister Shigeru Ishiba vowed to hang on as leader even though his ruling coalitionlost its majority in Sunday's upper house elections, an outcome that was not exactly a shock and has been mostly priced in. Investors braced for market disquiet ahead of a deadline on U.S. tariff negotiations. Japanese markets were closed for a public holiday, leaving the yen as the main indicator of possible investor angst. The dollar, on the other hand, fell against most currencies, in line with the decline in U.S. Treasury yields, analysts said. In afternoon trading, the Japanese currency gained 1% to 147.315 yen per dollar, although not far off from the 3-1/2-month low of 149.19 yen hit last week as investors fretted about Japan's political and fiscal outlook. The yen also nudged 0.4% higher against the euro to 172.27 and against sterling to 198.64, up 0.4%. Ishiba's Liberal Democratic Party returned 47 seats, short of the 50 it needed to ensure a majority in Japan's 248-seat upper chamber, where half the seats were up for grabs. He vowed to stay on in his role even as some of his own party discussed his future and the opposition weighed a no-confidence motion. "The elections were not as awful an outcome for the Prime Minister Shigeru Ishiba as analysts had predicted. The PM's party managed to minimize seat losses and Ishiba was not forced to resign his position," said Juan Perez, director of trading at Monex USA in Washington. "This overall plays as a welcome tune for Japanese yen developments since the reality is far more optimistic than anticipated with the PM promising to stay in power and work out differences in coming up with fiscal policy." The election result, while not entirely a shock to markets, also comes at a tricky time for a country trying to get a tariff deal with U.S. President Donald Trump before an August 1 deadline. Investor focus has also been firmly on Trump's global tariff salvos, with a Financial Times report last week indicating the U.S. president was pushing for steep new tariffs on European Union products. U.S. Commerce Secretary Howard Lutnick said on Sunday he was confident the United States can secure a trade deal with the EU, but said August 1 was a hard deadline for tariffs to kick in. EU diplomats said the bloc was exploring a broader set of counter measures against the U.S. as prospects for an acceptable trade agreement fade, even though a negotiated solution was still their preferred option. The euro was up 0.4% at $1.1681, while sterling last fetched $1.3488, up 0.6%. The European Central Bank is due to meet this week and is expected to hold rates steady after a string of cuts, while investor attention has been on whether the Federal Reserve succumbs to pressure from Trump to cut interest rates. In the United States, Trump appeared near the point of trying to dismiss Fed Chair Jerome Powell last week, but backed off with a nod to the market disruption that would likely follow. The U.S. central bank is widely expected to hold rates steady at its July meeting. U.S. Treasury Secretary Scott Bessent on Monday said the entire Fed needed to be examined as an institution and whether it had been successful. Speaking with CNBC, he cited what he called "fear-mongering over tariffs" despite the emergence thus far of little, if any, inflationary effect. "If this were the (Federal Aviation Administration) and we were having this many mistakes, we would go back and look at why. Why has this happened?" he said. "All these PhDs over there, I don't know what they do." Traders are fully pricing in a Fed rate cut by the October meeting with the odds of a second rate cut this year not fully priced in yet. The dollar index , which measures the U.S. currency against six others, was down 0.5% at 97.969. "I think the dollar topped out last week, while foreign currencies have bottomed, so foreign currencies have come back stronger here," said Marc Chandler, chief market strategist, at Bannockburn Forex in New York. "I think the dollar is very much connected to interest rates. The 10-year yield is off more than six basis points." In cryptocurrencies, bitcoin fell more than 1% to $116,788 , with investors profiting from recent gains in the run-up to the signing into law the GENIUS Act last Friday.
CNA
a day ago
- Business
- CNA
Yen gains broadly as Japan's Ishiba stays on; dollar weakens
NEW YORK :The yen climbed across the board on Monday after beleaguered Japanese Prime Minister Shigeru Ishiba vowed to hang on as leader even though his ruling coalition lost its majority in Sunday's upper house elections, an outcome that was not exactly a shock and has been mostly priced in. Investors braced for market disquiet ahead of a deadline on U.S. tariff negotiations. Japanese markets were closed for a public holiday, leaving the yen as the main indicator of possible investor angst. The dollar, on the other hand, fell against most currencies, in line with the decline in U.S. Treasury yields, analysts said. In afternoon trading, the Japanese currency gained 1 per cent to 147.315 yen per dollar, although not far off from the 3-1/2-month low of 149.19 yen hit last week as investors fretted about Japan's political and fiscal outlook. The yen also nudged 0.4 per cent higher against the euro to 172.27 and against sterling to 198.64, up 0.4 per cent. Ishiba's Liberal Democratic Party returned 47 seats, short of the 50 it needed to ensure a majority in Japan's 248-seat upper chamber, where half the seats were up for grabs. He vowed to stay on in his role even as some of his own party discussed his future and the opposition weighed a no-confidence motion. "The elections were not as awful an outcome for the Prime Minister Shigeru Ishiba as analysts had predicted. The PM's party managed to minimize seat losses and Ishiba was not forced to resign his position," said Juan Perez, director of trading at Monex USA in Washington. "This overall plays as a welcome tune for Japanese yen developments since the reality is far more optimistic than anticipated with the PM promising to stay in power and work out differences in coming up with fiscal policy." The election result, while not entirely a shock to markets, also comes at a tricky time for a country trying to get a tariff deal with U.S. President Donald Trump before an August 1 deadline. TARIFF UNCERTAINTY Investor focus has also been firmly on Trump's global tariff salvos, with a Financial Times report last week indicating the U.S. president was pushing for steep new tariffs on European Union products. U.S. Commerce Secretary Howard Lutnick said on Sunday he was confident the United States can secure a trade deal with the EU, but said August 1 was a hard deadline for tariffs to kick in. EU diplomats said the bloc was exploring a broader set of counter measures against the U.S. as prospects for an acceptable trade agreement fade, even though a negotiated solution was still their preferred option. The euro was up 0.4 per cent at $1.1681, while sterling last fetched $1.3488, up 0.6 per cent. The European Central Bank is due to meet this week and is expected to hold rates steady after a string of cuts, while investor attention has been on whether the Federal Reserve succumbs to pressure from Trump to cut interest rates. In the United States, Trump appeared near the point of trying to dismiss Fed Chair Jerome Powell last week, but backed off with a nod to the market disruption that would likely follow. The U.S. central bank is widely expected to hold rates steady at its July meeting. U.S. Treasury Secretary Scott Bessent on Monday said the entire Fed needed to be examined as an institution and whether it had been successful. Speaking with CNBC, he cited what he called "fear-mongering over tariffs" despite the emergence thus far of little, if any, inflationary effect. "If this were the (Federal Aviation Administration) and we were having this many mistakes, we would go back and look at why. Why has this happened?" he said. "All these PhDs over there, I don't know what they do." Traders are fully pricing in a Fed rate cut by the October meeting with the odds of a second rate cut this year not fully priced in yet. The dollar index, which measures the U.S. currency against six others, was down 0.5 per cent at 97.969. "I think the dollar topped out last week, while foreign currencies have bottomed, so foreign currencies have come back stronger here," said Marc Chandler, chief market strategist, at Bannockburn Forex in New York. "I think the dollar is very much connected to interest rates. The 10-year yield is off more than six basis points." In cryptocurrencies, bitcoin fell more than 1 per cent to $116,788, with investors profiting from recent gains in the run-up to the signing into law the GENIUS Act last Friday. Currency bid prices at 21 July 07:54 p.m. GMT Descripti RIC Last U.S. Pct YTD Pct High Low on Close Change Bid Bid Previous Session Dollar 97.87 98.402 -0.53 per cent -9.79 per cent 98.507 97.6 index 98 Euro/Doll 1.169 1.1631 0.51 per cent 12.92 per cent $1.1717 $1.1 ar 615 Dollar/Ye 147.34 148.74 -0.98 per cent -6.4 per cent 148.51 147. n 1 Euro/Yen 172.25 172.97 -0.42 per cent 5.53 per cent 172.83 171. 93 Dollar/Sw 0.7982 0.8019 -0.46 per cent -12.04 per cent 0.8021 0.79 iss 67 Sterling/ 1.3486 1.341 0.58 per cent 7.84 per cent $1.351 $1.3 Dollar 405 Dollar/Ca 1.3684 1.3726 -0.3 per cent -4.83 per cent 1.3731 1.36 nadian 72 Aussie/Do 0.6523 0.6509 0.25 per cent 5.45 per cent $0.6538 $0.6 llar 5 Euro/Swis 0.933 0.9317 0.14 per cent -0.67 per cent 0.9334 0.93 s 14 Euro/Ster 0.8666 0.8661 0.06 per cent 4.75 per cent 0.8673 0.86 ling 51 NZ 0.597 0.5961 0.2 per cent 6.74 per cent $0.5984 0.59 Dollar/Do 39 llar Dollar/No 10.1656 10.1576 0.02 per cent -10.62 per cent 10.2129 10.1 rway 413 Euro/Norw 11.882 11.8169 0.55 per cent 0.96 per cent 11.8933 11.8 ay 18 Dollar/Sw 9.5816 9.6426 -0.63 per cent -13.03 per cent 9.6812 9.55 eden 14 Euro/Swed 11.2018 11.2214 -0.19 per cent -2.32 per cent 11.2539 11.1 en 899
Bloomberg
2 days ago
- Business
- Bloomberg
Japan's Ishiba Vows to Stay on, EU to Prepare US Trade Retaliation Plan
Japanese Prime Minister Shigeru Ishiba said he intended to stay on even as his ruling coalition suffered a historic setback in an upper house election on Sunday, an outcome that may further unsettle markets. The ruling Liberal Democratic Party along with longtime partner Komeito lost its majority in the chamber, public broadcaster NHK reported, saying the bloc failed to win the 50 seats it needed to maintain control. That marks the first time since 1955 that a leader from the storied Japanese party will govern the country without a majority in at least one of the legislative bodies. Today's guests: Aneka Beneby, Julius Baer Portfolio Manager, Phoenix Kalen, Société Générale Corporate & Investment Banking Head of Emerging Markets Research, Philippe Chryssicopoulos, UBS Global Co-Head of the Global Industrials Group & Global Head of Infrastructure and Power. (Source: Bloomberg)
Japan Times
2 days ago
- Business
- Japan Times
Consumption tax cut not a given even after Upper House election
A consumption tax cut that was such a pivotal issue in Sunday's Upper House election is not a foregone conclusion given the political realities of a minority government and the economic realities of Japan, some analysts say. In the historic vote, the Liberal Democratic Party-Komeito coalition lost its majority and now controls neither house of parliament, although it still has the Cabinet. It has stood firmly against lowering the consumption tax — which is currently set at 10% for most items and 8% for food and beverages — while most opposition parties have called for a reduction of the tax or simply abolishing it. The problem for the opposition parties is that they might not be able to agree on enough to be effective against a coalition that remains the largest bloc in both houses despite lacking a majority. 'It's probably quite difficult for them to find common ground,' Tomohisa Ishikawa, chief economist at the Japan Research Institute, said of the opposition. Markets may also make consumption tax cuts difficult. Investors were already rattled ahead of the election, in part on the possibility that government revenues could take a hit with the implementation of policies pushed by the opposition. The yield on 30-year Japanese government bonds surged to a record 3.2% last week, and that on 20-year JGBs hit the highest level since November 1999. Bond prices move inversely to yields. "I believe the recent rise in the yield on superlong-term bonds was a sign that Japan's fiscal risks were being taken more seriously,' said Daiju Aoki, regional chief investment officer at UBS SuMi Trust Wealth Management. Prime Minister Shigeru Ishiba stood firm on his stance against the tax cuts right up through election day on concerns about the fiscal stability of the country. 'If we were to implement such a policy, how would we secure funding for social welfare programs?' he said Sunday. While pressure on the government to spend more will undoubtedly increase post-election, Aoki said a tax cut may be implemented in a way that won't seriously hurt fiscal soundness. 'By teaming up with parties against a massive government bond issuance, the LDP and Komeito can still form a majority,' he said. Virtually all opposition parties stress the need for a consumption tax cut, but details are different. The Constitutional Democratic Party of Japan (CDP), which is the largest opposition party and is led by former Prime Minister Yoshihiko Noda, is looking to make food nontaxable for one year. Noda, who is considered to be on the side of fiscal discipline, said his party would only advocate a consumption tax cut that's fully funded and not dependent on bond issuance. The LDP and Komeito could work with the CDP to minimize the fiscal risk, if a consumption tax cut really becomes a policy option, Aoki said. 'In that sense, there might be some short-term volatility, but if the bond market recognizes that there won't be a massive tax cut, I think this will help curb an excessive rise of long-term rates," he said. Pro-fiscal spending parties remain popular, and this does add an element of uncertainty. The Democratic Party for the People (DPP) won 17 seats on Sunday and now has 22. It has said that tax relief can be backed by issuing government bonds. The DPP hopes to temporarily lower the consumption tax rate on all products to 5% until real wages start rising again. Sanseito, which significantly increased its presence by winning 14 seats, advocates eventually abolishing the consumption tax altogether, saying the government can issue bonds to finance the policy. Reiwa Shinsengumi and the Japanese Communist Party have also proposed scrapping the consumption tax. Nippon Ishin no Kai plans to reduce the 8% tax on food to zero for two years.
Yahoo
2 days ago
- Politics
- Yahoo
Japan PM hangs on after 'extremely regrettable' election
Japanese Prime Minister Shigeru Ishiba clung on Monday even after his coalition suffered what he called an "extremely regrettable" election result, as painful new US tariffs loom. In Sunday's election Ishiba's Liberal Democratic Party (LDP), which has governed almost continuously since 1955, and its partner Komeito fell a projected three seats short of retaining a majority in the upper house. Voters angry at inflation turned to other parties, notably the "Japanese first" Sanseito, which made strong gains with its "anti-globalist" drive echoing the agenda of populist parties elsewhere. "I even think (the LDP) should have lost more," 25-year-old Kazuyo Nanasawa, who voted for a small ultra-conservative party, told AFP, adding that Ishiba should quit. The debacle comes only months after Ishiba's coalition was forced into a minority government in the more powerful lower house, in the LDP's worst result in 15 years. But asked late Sunday if he intended to remain in office, Ishiba told local media: "That's right." "Changes in the external environment, such as the international situation, or natural disasters, cannot wait for the political situation to improve," Ishiba told a news conference on Monday. "For this reason, although I'm acutely aware of our grave responsibility for the election results, in order to not let politics become stagnant, I believe I must fulfil my responsibility as the party with the most votes and to the people of the country, while listening carefully and sincerely to the voices of the local people," he said. It was unclear in any case who might step up to replace Ishiba now that the government needs opposition support in both chambers to pass legislation. LDP supporter Takeshi Nemoto, 80, told AFP that a new leadership contest "would be a losing battle" for the party, further complicating tariff talks with US President Donald Trump's administration. "Diplomacy is under pressure at the moment," agreed Shuhei Aono, 67. "Who is going to take care of it? I think (Ishiba) cannot easily withdraw." - 'Japanese first' - The election saw 125 seats in the 248-seat upper house contested. The coalition needed 50 of those but local media reported they only won 47, with the LDP winning 39 and Komeito eight, giving them 122 deputies. Second-placed was the Constitutional Democratic Party of Japan (CDP), which won 22 contested seats, followed by the Democratic Party For the People (DPP) with 17. The right-wing Sanseito party won 14 seats. Sanseito wants "stricter rules and limits" on immigration, opposes "radical" gender policies, and wants a rethink on decarbonisation and vaccines. It was forced last week to deny any links to Moscow -- which has backed populist parties elsewhere -- after a candidate was interviewed by Russian state media. The opposition is fragmented, and chances are slim that the parties can form an alternative government, Hidehiro Yamamoto, politics and sociology professor at the University of Tsukuba, told AFP. Expanding the coalition would be difficult, with the DPP the most likely partner "on the condition that (the government) delivers some of the positive fiscal measures, such as tax cuts," he said. More likely is that Ishiba will continue needing opposition support on a case-by-case basis to pass legislation. - Trump tariffs - After years of stagnant or falling prices, consumers in the world's fourth-largest economy have been squeezed by inflation since Russia's 2022 invasion of Ukraine. In particular, the price of rice has doubled, squeezing many household budgets despite government handouts. Not helping is lingering resentment about an LDP funding scandal, and US tariffs of 25 percent due to bite from August 1 if there is no trade deal. Japanese imports are already subject to a 10 percent tariff, while the auto industry, which accounts for eight percent of jobs, is reeling from a 25 percent levy. On Monday tariffs envoy Ryosei Akazawa left on his eighth visit to Washington. "We will achieve an agreement that is beneficial to both Japan and the US, based on the concept of investment rather than tariffs," said Ishiba. kh-nf-stu/mtp
