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March 4th - Bank of Japan Governor Kazuo Ueda stated on Wednesday that a significant increase in wage levels is needed for Japan to sustainably achieve its 2% inflation target. Speaking in parliament, Ueda said, "The Bank of Japan cannot exert a strong influence on real wage growth," which depends primarily on medium- to long-term labor productivity. He added, "However, we will implement monetary policy to ensure that Japan sustainably and stably achieves its inflation target while wages grow."Bank of Japan Governor Kazuo Ueda: If the economic and price trends are in line with our forecasts, we will continue to raise interest rates.Japans household consumer confidence index for February was 40, below the expected 38.2 and the previous reading of 37.9.March 4th - Since the outbreak of conflict in the Middle East this week, the yen has continued to weaken, deviating from its traditional safe-haven asset role, and Tokyo traders are preparing for possible government intervention. The yen has depreciated by about 1% since last Friday, to 157.2 yen to the dollar. Traders say this contrasts sharply with previous periods of geopolitical tension. Neil Newman, Japan strategist at Astris Advisory, said, "The yen is no longer a safe-haven asset. Companies stopped doing so about four years ago. They are now under pressure to the opposite, encouraged to invest overseas, and are still doing so on a large scale. In Japans current economic environment, there is no incentive to repatriate funds." Analysts say the yens unexpected weakness highlights structural changes and vulnerabilities in the Japanese economy. The market has been assessing the impact of Sanae Takashis expanded fiscal spending plan and her opposition to further interest rate hikes by the Bank of Japan. Tai Hui, chief market strategist for Asia Pacific at JPMorgan Asset Management, said increased exchange rate volatility has significantly reduced the yens appeal as a hedging currency. Geopolitical conflicts have also increased Japans exposure to rising energy prices and upside inflation risks.Bank of Japan Governor Kazuo Ueda: (When asked whether Japanese Prime Minister Sanae Takaichi expressed reservations about raising interest rates during their meeting in February) The two exchanged general views on economic and price developments.

Dow Jones Rallies 0.7% as Walmart, Home Depot Earning Lift Retail Sector

Alice Wang

Aug 17, 2022 14:54



Wall Street is mixed as retailers rise on strong earnings and growth stocks decline on an increase in yield.


On Tuesday, US equity markets were mixed as strong earnings from major retailers and better-than-anticipated growth in the US Industrial Production in July lifted stocks that are sensitive to opinions about the state of the US economy, but a subsequent increase in US bond yields hurt rate-sensitive big tech/growth names. As a consequence, after reaching new multi-month highs over 13,700 earlier in the session, the Nasdaq 100 index was last down about 0.3%, while the Dow Jones was last up about 0.7% after reaching its best levels since mid-April in the 34,200s.


After reaching its best levels since mid-April at 4,325 earlier in the session, the S&P 500 index encountered resistance around its 200-Day Moving Average at 4,326 and was last trading almost flat on the day at the 4,300 mark. The S&P 500 is now trading almost 18% higher than its yearly lows in the 3,600s set back in June. The main US index last reached its 200DMA back on April 21.


This year's inflation surge has peaked and should now ease, evidence that the US is holding up better than expected in the face of extreme price pressures, and earnings that have held up better than expected, as most recently demonstrated by Walmart and Home Depot, have all contributed to the recent run higher. In other words, there is growing hope that the US economy will have a "soft landing," in which the Fed manages to reduce inflation without raising interest rates too high and causing a downturn.

Home Depot jumps 4.1%, while Walmart increases 5.5%

The stock prices of two of the biggest US retailers, Walmart and Home Depot, increased on Tuesday after both companies reported profit figures that were stronger than anticipated before the start of US trading. Given that the business had just recently issued a profit warning, Walmart's downward adjustment to its new full-year profit prediction wasn't as awful as anticipated. Although store traffic was down and prices were up, Home Depot nonetheless outperformed top-line profits forecasts.


Lowe's, Target, TJX Companies, and Kroger were all able to record strong intra-day gains thanks to Walmart and Home Depot's strong results. As a result, the S&P 500 GICS Consumer Staples and Consumer Discretionary sectors had increases of 1.2% and 0.9%, respectively, making them the top performers. Information technology saw a decline of 0.6%, followed by communication services (-0.3%), health care (-0.4%), energy (-0.4%), and real estate (-0.5%).


Regarding some of the well-known brands, Tesla fell closer to 1.0% while Alphabet, Apple, and Microsoft all fell by 0.5%. Due to the positive outlook for the retail industry, Amazon almost increased by 1.0%.

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