Japanese Consumer Price Index accelerates

November 11, 2021 (Thursday) Clear

・The second Kishida Cabinet was inaugurated on the 10th after the Prime Minister's appointment ceremony and the ministers' accreditation ceremony at the Imperial Palace.

Foreign Minister Yoshimasa Hayashi, the former Minister of Education, Culture, Sports, Science and Technology, was appointed, with other ministers reappointed from the first cabinet.

A plan for an economic stimulus package expected to exceed 30 trillion yen will be decided on the 19th.

・On the 10th, the government disclosed concrete measures for grants to businesses, a pillar of the economic measures.

A maximum of up to 2.5 million yen will be provided to small and medium-sized enterprises across all industries affected by the spread of COVID-19.

(Nikkei, front page)

・On the 10th, the U.S. Labor Department announced that October's Consumer Price Index rose 6.2% year over year, accelerating from September's 5.4%.

The rise reached the 6% range for the first time since November 1990, marking six consecutive months of growth above 5%.

In addition to supply constraints from goods and labor shortages, price increases were notable across broad areas such as gasoline and food.

・The colossal 30 trillion-yen-plus economic stimulus is likely to be characterized by policy goals that are somewhat inconsistent.

A key pillar of the measures is a 100,000 yen grant to everyone under 18, agreed upon by the ruling party.

・U.S. pharmaceutical giant Merck announced on the 10th that it had signed a supply agreement with the Japanese government for the COVID-19 oral antiviral drug candidate “Molnupiravir.”

160,000,000 doses will be supplied to Japan for about $1.2 billion (about 130 billion yen).

・The government will create a new subsidy program to support the modernization of semiconductor plants and other domestic production.

As many factories have aged, subsidies will cover part of the costs for installing the latest manufacturing equipment and for fire prevention measures.

・Tosho Tokyo Financial HD <8616> [Closing price 379 yen] Asia Blockchain (distributed ledger) will form a trading alliance for digital securities.

In addition to supporting the issuance of digital securities backed by real estate,

frameworks will be established to facilitate the sale and purchase of digital securities in Asia, including Japan, Thailand, and Korea.

・There is a clear divergence between the bond market and the stock market regarding future prospects.

Bond markets, supported by the easing of monetary policy by central banks around the world, are wary of volatility as the support wanes.

On the other hand, stocks are being buoyed by optimistic corporate earnings and the economy.

If bond volatility spreads to stocks, there is a risk of a sharp reaction.

・Global hedge funds are expanding.

Assets under management in October rose to over $4.4 trillion (about 460 trillion yen) for the first time.

In rising stock markets, funds employing “equity hedges,” a strategy combining stock buying and selling, performed well, and

as the yield curve flattened for bonds, macro funds that analyze the overall economy and monetary policy also posted gains.

・Chinese game companies face a “triple squeeze” from regulatory tightening by authorities.

New game approvals have been halted since July, and stricter regulations on children's game usage and market exclusion by app distributors are expanding.

This could lead to consolidation among small and medium-sized game developers.

・China Association of Automobile Manufacturers announced on the 10th that October's new car sales fell 9.4% year on year to 2,332,000 units.

It marked the sixth consecutive month of decline year on year, but the negative rate narrowed to single digits.

The association indicated that “semiconductor shortages have somewhat improved.”

・French President Macron announced on the 9th that construction of nuclear power plants would resume.

He explained that stable power supply is essential.

・Number of new coronavirus infections and deaths worldwide as of 4:00 PM on 11/10, compiled by Johns Hopkins University: Global total 481,000 (8,396 deaths)

United States 80005 (1,672) India 11,466 (460) Brazil 10,948 (183) United Kingdom 33,044 (264) Russia 37,999 (1,183) Turkey 28,662 (196)

France 12,565 (46) Iran 8,305 (112) Argentina 1,349 (22) Spain 0 (0) Colombia 2,199 (39) Germany 41,286 (237)

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