Rise in government bond yields in Europe
May 21, 2021 (Fri) cloudy
• A movement to protect gig workers who take on one-off jobs via the internet, in terms of social security and other aspects, is emerging.
In addition to expanding the scope of workers' compensation by the Japanese government, Spain decided to treat them as equal to workers who have signed an employment contract.
Due to the impact of the novel coronavirus, unemployment has risen and gig workers have surged.
• Prime Minister Yoshihide Suga participated in the 26th International Exchange Conference "The Future of Asia," online speech on the 20th with discussions on Asia's politics and economy ministries.
Referring to the spread of COVID-19 in Asia, he stated that efforts would be made to secure safe and effective vaccines fairly, including for developing countries.
He emphasized driving a strong recovery in Asia, a "growth center of the world," by balancing decarbonization and digitalization as dual engines of the economy.
• U.S.-made Moderna and U.K.-made AstraZeneca coronavirus vaccines are expected to be approved for manufacturing and sales as early as the 21st.
After the Pharmaceuticals and Medical Devices Agency’s committee meeting on the 20th, approval is to be formally granted by Minister of Health, Labour and Welfare Tamura.
Both require two doses per person, with a 4-week interval between doses for Moderna and a 4–12 week interval for AstraZeneca, which is longer than Pfizer's 3 weeks.
AstraZeneca can be stored refrigerated at 2–8°C, while Moderna must be stored frozen at around -20°C.
• The government plans to consult on adding Okinawa Prefecture to the COVID-19 state of emergency and lifting the "priority measures to prevent the spread" in Ehime Prefecture.
If Okinawa is added, the period is from May 23 to June 20.
• The Biden administration in the United States is rolling out climate change measures.
First, instruct the government body that coordinates intelligence agencies, including the CIA, to study the impacts of climate change.
Also called for establishing a new dedicated bureau responsible for developing decarbonization technologies.
• The sharp drop in crypto assets (cryptocurrencies) is a factor destabilizing financial markets.
Bitcoin plunged as much as 30% on U.S. time 19, prompted by regulatory tightening moves in China.
From a peak of around $64,800 in April, it fell to half in just one month.
The rapid market changes have major ripple effects on other asset classes and raise concerns about linkages with equities and other estimates.
• The representative cryptocurrency Bitcoin fell by as much as 30% at one point on the 19th to around $30,000.
Ethereum dropped more than 40%. Tesla's stock price also fell by more than 5% at times.
The Dow Jones Industrial Average continued to fall, with the decline at one point exceeding 580 points.
The trigger was the stance of Chinese financial authorities toward tightening regulations.
The Bank of China Association notified financial institutions on the 18th that they must not provide services involving virtual currencies directly or indirectly.
• According to Coinbase’s Q1 2021 trading volume data, individual investors accounted for 35% and institutional investors for 65% among cryptocurrency trading volumes in the U.S.
In terms of asset holdings, individuals accounted for 45% and institutional investors for 65%.
The recent crash again highlighted the challenges piled up in cryptocurrencies as investment assets.
When selling surged on the 19th, major exchanges such as Coinbase, Binance, and Japan's BitFlyer experienced connectivity issues and trading was temporarily unavailable.
• Ford Motor and SK Innovation of Korea announced on the 20th the establishment of a joint venture for automotive batteries.
They will invest roughly 600 billion yen in the U.S. to build a new automobile battery plant.
A US-Korean battery alliance will be born, following GM and LG Chem.
• The government has begun reviewing regulations for the operation of "flying cars" for full-scale introduction in the 2030s.
As the first step, to be able to transport people during the Osaka-Kansai Expo in 2025,
Toyota <7203> [closing price 8665 yen] and others will discuss at a government-industry working group to be established by June.
Planning system design with an eye toward urban use in the 2030s.
• The Ministry of Finance on the 20th released an April trade statistics quick report showing exports up 38.0% year-on-year to 7.1811 trillion yen, the highest April on record.
Driven by semiconductor manufacturing equipment and automobiles. Supported by recovery in China and the U.S.
• The Cabinet Office on the 20th projected that private demand in the April–June machine orders survey will rise 2.5% quarter-on-quarter for the private sector (excluding ships and power).
Manufacturing is expected to grow by 7.0%, while non-manufacturing is expected to rise by 2.7%.
The Cabinet Office maintained its view that there are signs of a recovery but the pace is uneven.
• Bond yields are rising across Europe.
Germany's 10-year government bond yield rose to around the negative 0.07% level, suggesting a possible exit from negative territory for the first time in about two years.
This is due to easing COVID-19 restrictions amid improving infection conditions and expectations of inflation from reopening economies.
• The U.S. Federal Reserve is quietly preparing for an exit from its large-scale monetary easing.
In the FOMC minutes released on the 19th, participants mentioned starting discussions on tapering the balance sheet and assets purchases, including U.S. government bonds.
However, with the caveat that it will occur at some point in the future.
• The Biden administration is strengthening dialogue with Russia to curb deteriorating relations.
On the 19th, the U.S. postponed sanctions aimed at impeding the export of Russian natural gas to coincide with a meeting of foreign ministers with Russia.
• As of 4:00 p.m. on May 20, global COVID-19 cases and deaths (collected by Johns Hopkins University): 164.91 million cases and 3, Details by region follow
U.S. 33,026,739 (67,1) India 25,772,440 (3,874) Brazil 15,812,055 (2,641) France 5,978,650 (141) Turkey 5,151,036 (238) Russia 4,908,794 (384)
U.K. 4,468,366 (3) Italy 4,172,525 (149) Germany 3,627,822 (235) Spain 3,625,928 (66) Argentina 3,411,160 (494) Colombia 3,161,126 (452)
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5/22 (Sat) [Koron Asa Seminar] Special Lecture: Hideaki Sakurai online solo (recorded 21st)
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5/29 (Sat) [Koron Asa Seminar] Masami Okamoto: The Green Season (Tokyo, Hatchobori)
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