Asia Economist and CEO, Centennial Asia Advisors

Manu Bhaskaran

Asia Economist and CEO

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Macroeconomics

Japanese Yen: The weakening has only just started <ul><li>
Both domestic and external demand weakening: Tertiary industry activity fell 0.1% m/m sa in February after +0.7% gain in January. The Nikkei-Markit Manufacturing PMI fell to a new low in April, with production and new orders falling sharply. Exports contracted 6.8% y/y in Mar 16, down from a 4.0% y/y decline in Feb 16. The even more precipitous import decline of 14.9% showed the dismal state of domestic demand. The earthquake in southern Japan is…</li></ul>

Japanese Yen: The weakening has only just started 
Both domestic and external demand weakening: Tertiary industry activity fell 0.1% m/m sa in February after +0.7% gain in January. The Nikkei-Markit Manufacturing PMI fell to a new low in April, with production and new orders falling sharply. Exports contracted 6.8% y/y in Mar 16, down from a 4.0% y/y decline in Feb 16. The even more precipitous import decline of 14.9% showed the dismal state of domestic demand. The earthquake in southern Japan is…

Weaker Yen Bad News for Asian Currencies; Brexit Risks Fall

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

The BoJ’s deep throat policy makes sense this time around after the shock tactics back-fired in January.  The market is being massaged to expect comprehensive easing including a further rate cut aimed at a weaker JPY.  This time around expect most of the action ahead of the BoJ meeting next week.  JPY may weaken near term, but will face significant resistance toward 115 and may be volatile after the meeting with little net new direction.  We continue to see market risks building in China; weak corporate bonds, rising yields, steadily declining CNY against its basket, steady capital outflow and lagging equities.  AUD has been boosted by iron ore and oil, but is diverging recently and may also be reflecting constrained confidence in China, notwithstanding recent improvement in economic activity.  We had returned our focus to long gold in recent days, but it may work better against a short JPY position.

The BoJ’s deep throat policy makes sense this time around after the shock tactics back-fired in January.  The market is being massaged to expect comprehensive easing including a further rate cut aimed at a weaker JPY.  This time around expect most of the action ahead of the BoJ meeting next week.  JPY may weaken near term, but will face significant resistance toward 115 and may be volatile after the meeting with little net new direction.  We continue to see market risks building in China; weak corporate bonds, rising yields, steadily declining CNY against its basket, steady capital outflow and lagging equities.  AUD has been boosted by iron ore and oil, but is diverging recently and may also be reflecting constrained confidence in China, notwithstanding recent improvement in economic activity.  We had returned our focus to long gold in recent days, but it may work better against a short JPY position.

AmpGFX - BoJ's Deep Throat and China Market Risks Make Way for Higher Gold/JPY

The rise in JPY is highlighting global risk aversion that may persist for several months.  A key contributing factor may be increasing fear leading up to the Brexit vote, removing EUR as a potential save haven.  While Japan may threaten intervention to prevent excessive and rapid moves in the JPY, few see this policy being used to draw a line in the sand.  A strong JPY may induce more aggressive policy easing by the BoJ later this month, placing further downward pressure on global yields.  The market will continue to doubt the Fed will hike rates even if its economy performs well in light of heightened global uncertainty. Low yields may tend to underpin global asset markets but choppy and directionless trading appears likely. The skittishness of global markets may increase volatility and make it difficult to trade with conviction on fundamental developments, perhaps leading to surprising and counterintuitive moves, including a deeper fall in USD/JPY.  In this environment we continue to see a case for long gold positions.

The rise in JPY is highlighting global risk aversion that may persist for several months.  A key contributing factor may be increasing fear leading up to the Brexit vote, removing EUR as a potential save haven.  While Japan may threaten intervention to prevent excessive and rapid moves in the JPY, few see this policy being used to draw a line in the sand.  A strong JPY may induce more aggressive policy easing by the BoJ later this month, placing further downward pressure on global yields.  The market will continue to doubt the Fed will hike rates even if its economy performs well in light of heightened global uncertainty. Low yields may tend to underpin global asset markets but choppy and directionless trading appears likely. The skittishness of global markets may increase volatility and make it difficult to trade with conviction on fundamental developments, perhaps leading to surprising and counterintuitive moves, including a deeper fall in USD/JPY.  In this environment we continue to see a case for long gold positions.

AmpGFX - JPY Strength Adds to Global Uncertainty and the Case for Gold

Asia Economic Research, Centennial Asia Advisors

Asees Bajaj

Asia Economic Research

<ul>
<li>Japan switched on a radar station on Yonaguni island in the East China Sea on 28 Mar, affording itself a permanent intelligence post close to Taiwan and a group of disputed islands.</li>
<li>Japan is also planning to strengthen its military presence in the East China Sea by increasing its Self-Defense Force to almost 10,000 personnel and installing missile batteries that will enable Japan to employ a defensive curtain along the disputed islands.</li>
</ul>Implications: Another sign of opposition to Chinese…


Japan switched on a radar station on Yonaguni island in the East China Sea on 28 Mar, affording itself a permanent intelligence post close to Taiwan and a group of disputed islands.
Japan is also planning to strengthen its military presence in the East China Sea by increasing its Self-Defense Force to almost 10,000 personnel and installing missile batteries that will enable Japan to employ a defensive curtain along the disputed islands.
Implications: Another sign of opposition to Chinese…

Economist, Centennial Asia Advisors

Jason Tan

Economist

Three negatives for Japan’s recovery<ul>
<li>First, the Yen’s sharp rebound is likely to hurt competitiveness.</li>
<li>Second, exports remain under pressure - falling 4% y/y in Feb 16. While this was better than the 12.9% contraction in January, the data was flattered by distortions caused by the timing of the Lunar New Year.</li>
<li>Third, the initial soundings for wage increases this spring do not look promising, with the large companies sharply reducing the quantum of wage rises compared to last year - a discouraging…</li>
</ul>

Three negatives for Japan’s recovery
First, the Yen’s sharp rebound is likely to hurt competitiveness.
Second, exports remain under pressure - falling 4% y/y in Feb 16. While this was better than the 12.9% contraction in January, the data was flattered by distortions caused by the timing of the Lunar New Year.
Third, the initial soundings for wage increases this spring do not look promising, with the large companies sharply reducing the quantum of wage rises compared to last year - a discouraging…


Japan: Economy Languishing, Monetary Policy Questioned

Japan

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Weaker Yen Bad News for Asian Currencies; Brexit Risks Fall

Japanese Yen: The weakening has only just started Both domestic and external demand weakening: Tertiary industry activity fell 0.1% m/m sa in...

Manu Bhaskaran

AmpGFX - BoJ's Deep Throat and China Market Risks Make Way for Higher Gold/JPY

The BoJ’s deep throat policy makes sense this time around after the shock tactics back-fired in January. The market is being massaged to expect...

Greg Gibbs

AmpGFX - JPY Strength Adds to Global Uncertainty and the Case for Gold

The rise in JPY is highlighting global risk aversion that may persist for several months. A key contributing factor may be increasing fear leading...

Greg Gibbs

Tensions in the East China Sea

Japan switched on a radar station on Yonaguni island in the East China Sea on 28 Mar, affording itself a permanent intelligence post close to...

Asees Bajaj

Japan: Economy Languishing, Monetary Policy Questioned

Three negatives for Japan’s recovery First, the Yen’s sharp rebound is likely to hurt competitiveness. Second, exports remain under pressure -...

Jason Tan

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