Monday, 14 May 2007

Japan's trade surplus surges, as does China's stock market

The Japanese economy seems to be coping well with the slowdown in the US economy. From Bloomberg:

Japan's current account surplus widened to a record in March, as exports to Asia and Europe helped counter slower growth in shipments to the U.S.

The surplus expanded 36.9 percent to 3.32 trillion yen ($28 billion) from a year earlier, the Ministry of Finance said in Tokyo today, more than the 2.95 trillion yen median estimate of 28 economists surveyed by Bloomberg News...

The trade surplus surged 62.1 percent, the fastest pace in three years, to a record, the Finance Ministry said.

Exports rose 9.6 percent, as a weaker yen increased the value of shipments...

Imports fell 1 percent, the first drop in three years, as oil prices were lower than a year earlier...

The income surplus...increased 13.2 percent to a record in March, today's report showed.

Oil price increases picked up pace in April though.

Japan's wholesale inflation accelerated in April as the cost of oil and other commodities rose, the Bank of Japan said today. An index of energy and raw materials prices paid by companies climbed 2.2 percent in April from a year earlier after increasing 2 percent in March, the Bank of Japan said.

Despite its booming economy, though, China got a respite from inflation in April. Again from Bloomberg:

Consumer prices gained 3 percent in April from a year earlier after rising 3.3 percent in March, the National Bureau of Statistics said today. The central bank's target ceiling for inflation in 2007 is 3 percent...

April's inflation rate was less than the 3.1 percent median estimate of 17 economists surveyed by Bloomberg News. Month-on- month, consumer prices declined 0.1 percent...

Money supply growth exceeded the government target for a third month in April and lending accelerated, the People's Bank of China said yesterday. The 17.1 percent gain in M2, the broad measure, outpaced the government's 2007 target of 16 percent...

Growth in M1...outpaced M2 for the fifth straight month, suggesting households are still switching money to be readily available for stock market investing. The gain was 20 percent.

That last paragraph certainly sounds about right. From AFP/CNA:

Investors are throwing money into China's share markets and the fever is nowhere more apparent than in the speculative trade involving the mountain of the bourses' money-losing companies.

Take Jiaozuo Xin'an Science and Technology. Last year the chemical maker lost 218.3 million yuan (US$28.4 million) but its share price has inexplicably tripled in the last three months.

According to various media reports the inexorable rise was triggered by rumours that the troubled firm was in talks to serve as a shell for a back-door listing of a securities brokerage.

The group denied it repeatedly, but its share price only climbed higher - a reflection of how China's overheated stock markets are defying economic logic and will eventually cause major economic fallout.

But no fallout today as Chinese stocks were up again, the Shanghai Composite Index rising 0.6 percent to close at 4,046.392.

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