NEWSLETTER
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Thursday / December 23
Japan GDP
The Japanese government will announce its largest annual budget on Friday, with a spending bill of 107.6 trillion yen ($943 billion) for the fiscal year starting next April.
The first budget compiled by Prime Minister Fumio Kishida's government, covers major anti-Covid-19 measures, social security spending to support the rapidly aging population, and military spending to deal with threats from China, according to Reuters.
Japanese bond plan
Japan plans to issue 40-year government bonds worth 4.2 trillion yen in the new fiscal year. This is an increase of 17% despite the government's plans to cut bond issuance overall.
This will be the third year in a row for the 40-year bond issuance, which is closely watched by the market and reflects solid demand from life insurers at the end of the yield curve.
Sources told Reuters that Prime Minister Fumio Kishida's initial debt issuance plan expects general calendar sales of Japanese Government Bonds (JGB) to be around 200 trillion yen, or about 20 trillion less than this year.
Sources said that while the government has increased its issuance of 40-year bonds, it has also abandoned the idea of issuing super-long bonds every month.
Growth forecast
The Japanese Cabinet Office announced that it has raised its growth forecasts for the next fiscal year, which will begin in April, saying that Japan expects its gross domestic product (GDP) to hit a record despite risks from the Omicron variant and supply constraints.
The growth projection has been upgraded to 3.2% for fiscal 2022 from the 2.2% real GDP growth forecast seen in the mid-year review in July, due to the record extra stimulus budget approved by parliament this week.
This figure will be the fastest growth since fiscal year 2010, when the economy grew by 3.3% following the global financial crisis.
Officials said stimulus spending is expected to increase GDP by 1.5% this fiscal year and 3.6% next fiscal year.
However, the government has lowered its real GDP forecasts for Japan to 2.6% from 3.7% previously in the current fiscal year ending in March, as the protracted COVID-19 pandemic and supply constraints in chip manufacturing affected the recovery.
Given these factors, the government said that the expectation of the economy returning to pre-pandemic levels has been postponed to next March.
Harsh Covid measures in China
Many cities in China have decided to quarantine domestic travelers from other parts of the country to prevent the spread of coronavirus infections during the upcoming holiday season.
China enters the Golden Week holiday for the Lunar New Year from January 31 to February 6, after a three-day New Year holiday in January. Hundreds of millions of workers and employees travel from the manufacturing center cities to their hometowns to see their families in different, often remore corners of China during this period.
The Chinese cabinet announced a three-tier alert system that categorizes the level of infection spread for each region. Residents in moderate to high-risk areas have been told to avoid unnecessary travel to other areas. Those who had to travel to different regions were required to present evidence that the PCR test performed in the previous 48 hours was negative.
The restrictions imposed by Beijing are particularly harsh. Visitors to the capital from areas where even a single infection has been confirmed in the last 14 days have been ordered to undergo PCR testing and a two-week health monitoring. According to the Japanese Nikkei newspaper, similar measures were introduced in Dalian.
The cities of Tianjin, Zhengzhou and Nanchang will order visitors from areas classified as medium to high risk to quarantine for two to three weeks, the same requirement will apply to incoming foreigners.
Pfizer approval
The U.S. Food and Drug Administration (FDA) authorized the use of Pfizer's Covid-19 pill on Wednesday, a drug that infected patients can take at home to stay out of the hospital.
The FDA's decision Wednesday allows doctors to prescribe the drug to high-risk patients aged 12 years and older, shortly after symptoms develop early in the disease course.
The FDA said the drug Paxlovid works safely and will be an important tool in reducing hospital admissions and deaths.
Researchers hope antivirals like Paxlovid will be effective against the new strains because of the way they work.
US stocks
U.S. stocks rallied on Wednesday, continuing to recover from a three-day streak of losses fueled by fears from the omicron variant.
The Dow Jones Industrial Average rose 261.19 points, or 0.7%, to 35,753.89 points, extending its two-day gain above 800 points.
S&P500 rose 1% to 4,696.56 as the Nasdaq Composite Index saw an increase 1.2% to 15,521.89.
The Japanese government will announce its largest annual budget on Friday, with a spending bill of 107.6 trillion yen ($943 billion) for the fiscal year starting next April.
The first budget compiled by Prime Minister Fumio Kishida's government, covers major anti-Covid-19 measures, social security spending to support the rapidly aging population, and military spending to deal with threats from China, according to Reuters.
Japanese bond plan
Japan plans to issue 40-year government bonds worth 4.2 trillion yen in the new fiscal year. This is an increase of 17% despite the government's plans to cut bond issuance overall.
This will be the third year in a row for the 40-year bond issuance, which is closely watched by the market and reflects solid demand from life insurers at the end of the yield curve.
Sources told Reuters that Prime Minister Fumio Kishida's initial debt issuance plan expects general calendar sales of Japanese Government Bonds (JGB) to be around 200 trillion yen, or about 20 trillion less than this year.
Sources said that while the government has increased its issuance of 40-year bonds, it has also abandoned the idea of issuing super-long bonds every month.
Growth forecast
The Japanese Cabinet Office announced that it has raised its growth forecasts for the next fiscal year, which will begin in April, saying that Japan expects its gross domestic product (GDP) to hit a record despite risks from the Omicron variant and supply constraints.
The growth projection has been upgraded to 3.2% for fiscal 2022 from the 2.2% real GDP growth forecast seen in the mid-year review in July, due to the record extra stimulus budget approved by parliament this week.
This figure will be the fastest growth since fiscal year 2010, when the economy grew by 3.3% following the global financial crisis.
Officials said stimulus spending is expected to increase GDP by 1.5% this fiscal year and 3.6% next fiscal year.
However, the government has lowered its real GDP forecasts for Japan to 2.6% from 3.7% previously in the current fiscal year ending in March, as the protracted COVID-19 pandemic and supply constraints in chip manufacturing affected the recovery.
Given these factors, the government said that the expectation of the economy returning to pre-pandemic levels has been postponed to next March.
Harsh Covid measures in China
Many cities in China have decided to quarantine domestic travelers from other parts of the country to prevent the spread of coronavirus infections during the upcoming holiday season.
China enters the Golden Week holiday for the Lunar New Year from January 31 to February 6, after a three-day New Year holiday in January. Hundreds of millions of workers and employees travel from the manufacturing center cities to their hometowns to see their families in different, often remore corners of China during this period.
The Chinese cabinet announced a three-tier alert system that categorizes the level of infection spread for each region. Residents in moderate to high-risk areas have been told to avoid unnecessary travel to other areas. Those who had to travel to different regions were required to present evidence that the PCR test performed in the previous 48 hours was negative.
The restrictions imposed by Beijing are particularly harsh. Visitors to the capital from areas where even a single infection has been confirmed in the last 14 days have been ordered to undergo PCR testing and a two-week health monitoring. According to the Japanese Nikkei newspaper, similar measures were introduced in Dalian.
The cities of Tianjin, Zhengzhou and Nanchang will order visitors from areas classified as medium to high risk to quarantine for two to three weeks, the same requirement will apply to incoming foreigners.
Pfizer approval
The U.S. Food and Drug Administration (FDA) authorized the use of Pfizer's Covid-19 pill on Wednesday, a drug that infected patients can take at home to stay out of the hospital.
The FDA's decision Wednesday allows doctors to prescribe the drug to high-risk patients aged 12 years and older, shortly after symptoms develop early in the disease course.
The FDA said the drug Paxlovid works safely and will be an important tool in reducing hospital admissions and deaths.
Researchers hope antivirals like Paxlovid will be effective against the new strains because of the way they work.
US stocks
U.S. stocks rallied on Wednesday, continuing to recover from a three-day streak of losses fueled by fears from the omicron variant.
The Dow Jones Industrial Average rose 261.19 points, or 0.7%, to 35,753.89 points, extending its two-day gain above 800 points.
S&P500 rose 1% to 4,696.56 as the Nasdaq Composite Index saw an increase 1.2% to 15,521.89.
