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Tag Archives: Japan

LNG sector transformation underway as long-term contracts dwindle

Global LNG procurement trends are undoubtedly shifting toward shorter contracts with smaller volumes and increasingly flexible commercial terms. With many long-term supply contracts set to roll off in the coming years, renewals are likely to be for shorter timeframes. The traditional 15-20 year agreements that underpin LNG projects will be much harder to come by, and only long-term contracts by large core suppliers such as Qatar will continue to form the backbone of global LNG supply. The...

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Japan’s nuclear power generation ramps up in 2019 but hurdles lie ahead

Dynamics in the Japanese power market have been a major bearish force acting on the global LNG market this year. Weak power demand, increasing renewable generation, notably solar, and higher nuclear output have depressed fossil fuel needs, and LNG in particular, as S&P Global Platts Analytics highlighted in a recent report. Ahead of the Platts Analytics Client Seminar in Singapore, Bruno Brunetti and Andre Lambine explore key aspects of the Japanese power market. Japan’s nuclear...

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The Mechanics of Absurdity

Over the past few decades, the central banks, including the Federal Reserve (Fed), have relied increasingly on interest rates to help modify economic growth. Interest rate management is their tool of choice because it can be effective and because central banks regulate the supply of money, which directly effects the cost to borrow it. Lower interest rates incentivize borrowers to take on debt and consume while dis-incentivizing savings. Regrettably, a growing consequence of favoring...

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Japan: Fall Like Germany, Or Give Hope To The Rest of the World?

After trading overnight in Asia, Japan’s government bond market is within a hair’s breadth of setting new record lows. The 10-year JGB is within a basis point and a fraction of one while the 5-year JGB has only 2 bps to reach. It otherwise seems at odds with the mainstream narrative at least where Japan’s economy is concerned. Record lows in Germany, those seem to make sense. By every account, the German economy is in trouble. So obvious, even the notoriously frugal government is floating...

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Not Bond Bull, The Bull of Bonds

In January 2018, Bill Gross was at it again. Famous for being the longtime public face of PIMCO, he’d acquired as much notoriety for being the boy who cried bear. By the way he talked and by what he predicted, you’d have to think the US Treasury had visited some horrible circumstance on a young Bill early in his life. It’s like he was possessed with unnatural hatred bonds for some reason. Gross: Bond bear market confirmed today. 25 year long-term trendlines broken in 5yr and 10yr maturity...

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Factoring the Lumps in the (global) Slump

The British manufacturing sector pulled the English economy into contraction for the first time since 2012. Real GDP declined by 0.2% Q/Q in the second quarter of 2019, another minus sign to add to the growing global list. Goods production fell sharply, down 2.3% in Q2 from Q1. It was the biggest decline since 2009. And it is being blamed on Brexit “uncertainty.” The most powerful forces in the entire world right now are, we are told, varying brands of the stuff. There’s Brexit, populists,...

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PBOC Continues to Check CNY Fall While Euro has Shrugged Off Italy’s Political Turmoil

Overview:  The S&P 500 gapped higher yesterday and posted its largest gain in two months.  Most of Asia Pacific but China and Hong Kong advanced. The three-day recovery in the MSCI Asia Pacific was insufficient to offset the losses at the start of the week, and the benchmark finished lower for the third consecutive week.  Europe's Dow Jones Stoxx 600 is paring yesterday's 1.6% gain, which was the largest in almost two months. US shares are trading with a heavier bias in Europe.   ...

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Yield Plunge: Running Out of Dollars, and Excuses

As of today’s close, there are only 22 trading days in the entire history of Japan’s government bonds (JGB) where the yield (or “yield”) on its 10-year paper has been more negative. Those 22 all came clustered together in June and July 2016. In other words, Japan’s bond market is today comparable only to that one period at the utter depths of Euro$ #3. This Euro$ #4 isn’t just a US problem or one for Europe. There is no either/or. It is perfectly clear in showing up across all the majors, as...

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Asian LNG landscape shifts as emerging markets liberalize

Demand growth in the global LNG market will not only hinge on new infrastructure and growing economies. It will also require an influx of additional buyers entering the market in search of clean, reliable and affordable energy. Nowhere is this more true than in Asia where steps have already been made to open up markets, add new participants and promote price discovery. However, demand prospects are very different in the established Northeast Asian market compared with the emerging economies...

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