Tag Archives: Prime minister

Japanese Prime Minister Dismissed; Yen Drops

Secretary-general Ichiro Ozawa of Japanese prime minister Yukio Hatoyama’s party, have asked Hatoyama to step down from his post, Yukio Ubukata, the vice secretary- general of the party said in a TV Asahi program Sunday, according to Bloomberg. There’s now a frenetic  activity in the forex markets.

 

Prime minister of Japan, Yukio Hatoyama

 

Secretary-general Ubukata says he expects both to resign before an upper house election next month.

Hatoyama refused to resign during a meeting of senior party officials yesterday, Kyodo News reported.

These short messages have triggered frenetic activity in the forex markets, with the yen dropping against most major currencies.

The Asian markets are about to open, but we can clearly see the reaction in the markets.

HERE’S SOME SNAP SHOTS AT 11:30 PM CET

GBPJPY:

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USDJPY:

EURJPY:

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Related by The Swapper:

Japan Struggle To Weaken Yen

Currency: The Weapon of Choice in Trade Wars

IIF Warns Of Dollar Collapse

New Japanese FX Intervention Fail; Gold At $1300

EUR Knocked Off Its Pedestal

Confusion Reigns

Japanese FX Intervention: A Game Changer

 

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Ireland To Cancel All Bond Sale In 2010

According to Bloomberg, Irish prime minister Brian Cowen says that his government decided to cancel all bond auctions for the rest of the year because of “turbulence” in bond markets. In addition, the state is already funded into next year, Cowen says.


“We are funded until next May,” Cowen said when he made the comments in an interview with national broadcaster RTE, Bloomberg reports.

“There has been such turbulence in the markets, since we don’t require those funds immediately why would we be going to get funds at rates such as 6.8 or 6.9 percent,” he said.

And apparently the remarks had some impact in the financial markets, as seen on the latest updated chart from Markit Credit Research:

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Yields for Irish bonds retreated lower after the government confirmed expectations of the total cost for Anglo Irish bailout to fall into the €30-35 billion range.

The 5yrs CDS for Ireland was about 15 bps tighter as well, quoting at 455 bps in late hours of Thursday’s trading.

“There is still uncertainty around the fate of subordinated debt-holders for Anglo Irish but their “contribution” to bailout costs are expected to be substantial,” Otis Casey, vice President at Markit writes in a update.

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Summer's Over; Greek Protests Continues

About 15,000 protesters marched through the city center Sunday ahead of prime minister George Papandreou’s first speech after his summer vacation, chanting slogans such as “get the IMF out of Greece” and “make the banks pay for the crisis.” The Greek PM says no new austerity measures is needed if the country stayed its fiscal course. However, the people in the streets are still a bit skeptical; the police arrested a 49-year-old man for attempting to throw a shoe at Papandreou.

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“I have every confidence that at the end of the year we will have reduced, in accordance with our commitments and decisions, the deficit by 40 percent,” Papandreou said in Thessaloniki, northern Greece, yesterday.

“As long as we are progressing well, there is no need for any new measures.”

Papandreou also said his government averted “certain default” by agreeing to wage and pension cuts and tax increases in return for a 110 billion-euro ($139.5 billion) emergency-loan package from Euro-area nations and the International Monetary Fund on May 2.

The measures have hit employment and spending, with the economy shrinking for a second year and inflation rising to the highest since Greece adopted the euro.

The government plans to cut the budget deficit to 8.1 percent of gross domestic product this year from 13.6 percent last year.

Papandreou said a debt restructuring would have been catastrophic.

He also took the opportunity to announce a cut in taxes on retained earnings for companies to 20 percent in 2011 from 24 percent, and emphasized that the 4% tax cut will provide incentives to create jobs.

According to Bloomberg, about 15,000 protesters marched through the city center yesterday ahead of Papandreou’s speech, chanting slogans such as “get the IMF out of Greece” and “make the banks pay for the crisis.”

Police arrested and then released a 49-year-old man for attempting to throw a shoe at Papandreou.

Starting The Tax Hunt

Officials from the EU, IMF and European Central Bank, called the “troika” in Greece, begin a new round of visits in Athens tomorrow, primarily to discuss Greece’s planning for the 2011 budget, which is due to be submitted to parliament early next month.

The country expects to receive a second installment from the troika, of 9 billion euros, this week.

Papandreou said the country has begun seeking information from international banks to hunt down Greeks with accounts abroad who aren’t paying their taxes. A measurement already embraced by several other countries, amongst them USA and Estonia.

Look To Norway!

Greece’s economy contracted in the second quarter more than originally estimated, shrinking 1.8 percent from the first quarter. From a year earlier, GDP declined 3.7 percent.

The jobless rate in June slid to 11.6 percent from 12 percent in May.

Markets will be gradually convinced of Greece’s progress, Papandreou said, pointing to purchases of Greek debt by Norway’s $450 billion Government Pension Fund Global.

The extra yield that investors demand to hold Greek 10-year bonds compared with German bunds rose as high as 957 basis points on Sept. 8, just 16 points short of the record touched on May 7.

For those who are not too familiar with the investment strategy of the Norwegian Pension Fund, I’d like to add that at least 10% of total its total bond holdings are already invested in the PIGS-countries, (the fund refuse to disclose its holdings in Ireland), 50% of its equity investments are placed in the tumbling Chinese stock market and the so-called “Oil Fund” is the fourth largest shareholder in BP.

The smartest investment they’ve done so far is shorting the banks in Iceland just before they went down.

The Norwegian Pension Fund Global owns 1% of all the listed shares in the world, and 2% of all European.

Related by the Econotwist:

Default Now Or Default Later; Greece Still Withholding Critical Data

Morgan Stanley: Governments WILL Default

Brussels Tells Athens To Shut Up And Take The Pain

Greece About To Enter The Death Spiral

A European Revolution by December?

2000yr-Old Secret Organization Makes Threats Against Greek Navy Supplier

EU: Trading Bailouts For Weapons

Greece: Corruption Behind Crisis

Norway’s Government Pension Fund Takes $25bn Hit

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