2025-09-18 04:51
BOJ may hike rates in October if tankan not bad, stocks hold up, says former official Shimoda Solid corporate profits, wage hikes lay groundwork for BOJ hike Shimoda says there is doubt Takaichi can push policies that weaken yen TOKYO, Sept 18 (Reuters) - The Bank of Japan could raise interest rates in October even if Sanae Takaichi, a proponent of aggressive monetary easing, wins the ruling party's leadership race and becomes the next premier, former central bank executive Tomoyuki Shimoda said on Thursday. Seen as a leading candidate to win the race on October 4, Takaichi stands out for her vocal opposition to the BOJ's rate hikes and her calls to ramp up spending to reflate the economy. Sign up here. The prospect of her becoming Japan's next prime minister has led some market players to buy yen and Japanese government bonds on the view it could discourage the BOJ from hiking rates. But Shimoda, who has experience serving at the BOJ's monetary affairs department, expects the outcome of the leadership race, including a possible victory by Takaichi, to have a limited impact on monetary policy. "While she could advocate bigger fiscal spending, I doubt Takaichi can pursue policies that could weaken the yen," Shimoda told Reuters in an interview. A weak yen gives exports a boost, but it has been a source of concern for policymakers because it lifts import costs and has been a factor in inflation staying well above the BOJ's 2% target. A yen fall below 150 to the dollar may also draw complaints from the U.S. administration, which is pursuing a weak-dollar policy that would give U.S. exports a boost, Shimoda said. The BOJ will likely raise rates at its October 29-30 meeting if stock prices stay firm and its "tankan" business sentiment survey, due on October 1, does not worsen much, he said. "Corporate profits aren't bad and structural labour shortages will push up wages. Persistent rises in food costs will also keep inflation elevated," said Shimoda, who is currently an academic at Japan's Rikkyo University. "The environment for a rate increase is falling into place." The BOJ is widely expected to keep interest rates steady at 0.5% at a two-day meeting ending on Friday. A Reuters poll showed a majority of economists expect another 25-basis-point hike by year-end. But those surveyed were split on the timing, with bets centring on October and January. Takaichi is known as an advocate of an "Abenomics"-style mix of fiscal and monetary stimulus. Under deceased premier Shinzo Abe, the BOJ deployed a huge asset-buying programme in 2013 to pull Japan out of deflation. Her main rival is Shinjiro Koizumi, whose views on BOJ policy are little known. The BOJ exited its massive, decade-long stimulus last year and raised short-term rates to 0.5% in January on the view Japan was on the cusp of durably achieving its 2% inflation target. With inflation staying above 2% for well over three years, the BOJ has signalled its readiness to keep hiking rates. The yen's moves have historically had a major impact on BOJ decisions. Its exit from ultra-loose policy and a hike in rates to 0.25% last year came at a time when the yen's plunge to near two-decade lows drew political calls for higher rates. After sliding past 160 per dollar last year, the yen is now hovering around 146. https://www.reuters.com/business/boj-may-raise-rates-october-even-if-takaichi-wins-leadership-race-says-ex-cbank-2025-09-18/
2025-09-18 04:41
Sept 18 (Reuters) - The Trump administration is drawing up plans to use tariff revenue to fund a program to support U.S. farmers, the Financial Times reported on Thursday, citing agriculture secretary Brooke Rollins. "There may be circumstances under which we will be very seriously looking to and announcing a package soon," Rollins told the newspaper in an interview on Wednesday. Sign up here. Rollins said financing the bailout with “tariff income that is now coming into America” was “absolutely a potential.” The White House did not immediately respond to a Reuters request for comment. The report follows pressure from farm groups after China stopped purchases of soybeans from the U.S. in their tit-for-tat trade dispute, and as tariffs have pushed up costs for fertiliser, machinery and other imported inputs. Agriculture has emerged as a major point of contention between China and the U.S. as the superpowers are locked in a tariff war launched by President Donald Trump. https://www.reuters.com/world/us/trump-tariffs-could-fund-bailout-us-farmers-agriculture-secretary-tells-ft-2025-09-18/
2025-09-18 04:38
A look at the day ahead in European and global markets from Gregor Stuart Hunter: As Vladimir Lenin had it, just as there are decades where nothing happens, there are weeks where decades happen. The same is broadly true in central banking, with this one towards the busier end of the spectrum. Sign up here. Markets are digesting the U.S. central bank's moves, which saw the Federal Open Market Committee delivering a widely expected 25 basis point rate cut on Wednesday, with only new Governor Stephen Miran dissenting in favour of a larger 50 bps cut. For those marking up their scorecard: The Bank of Canada cut, the People's Bank of China held, the Hong Kong Monetary Authority had no choice but to follow the Fed, the Bank of England is later today, and the Bank of Japan follows tomorrow. After a stumble on Wall Street, Asian markets bought the dip on Thursday, sending S&P 500 e-minis up 0.5% and Nasdaq futures 0.7% higher. That risk-on sentiment looks set to follow through to Europe, where pan-region futures are rising 0.6%, German DAX futures have gained 0.7% and FTSE futures are 0.2% higher. Bond markets also rallied after a pullback, with the yield on benchmark 10-year Treasury notes sliding to 4.068% compared with its U.S. close of 4.076% on Wednesday. The dollar held steady at 97.024 after recovering from a three-and-a-half-year low. Gold fluctuated between gains and losses, hitting an air pocket after scaling a record high on Wednesday, with bullion last trading at $3,659.40 per ounce. Still, for all the sugar rush of the Fed resuming an easing cycle, growth worries are never far away. New Zealand stocks and the kiwi dollar skidded after worse-than-expected economic data and Australian stocks dropped after the release of weaker-than-expected labour market figures. Shares in gas producer Santos (STO.AX) , opens new tab slid as much as 13.6% after a consortium led by Abu Dhabi's ADNOC scrapped its $18.7 billion bid for the company, saying commercial terms could not be agreed. Brent crude fell 0.2% to $67.84 per barrel. For all that drama, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab is trading flat. Key developments that could influence markets on Thursday: Corporate earnings: Auto Trader Group, Embracer Group, Next Central bank decisions: UK: Bank of England Economic data: UK: GfK Consumer Confidence for Sept Debt auctions: France: 3-year, 5-year, 8-year, 9-year and 13-year government debt auctions https://www.reuters.com/world/china/global-markets-view-europe-2025-09-18/
2025-09-18 00:52
TOKYO, Sept 18 (Reuters) - Oil prices were little changed on Thursday after the U.S. central bank lowered its key interest rate as widely expected, while an indication of more rate cuts before year-end raised the prospect of a demand boost spurred by falling borrowing costs. Brent crude futures were 8 cents, or 0.12%, down at $67.87 a barrel at 0042 GMT. U.S. West Texas Intermediate futures were down 10 cents, or 0.16%, at $63.95. Sign up here. The Federal Reserve cut is policy rate by a quarter of a percentage point on Wednesday and indicated it will steadily lower borrowing costs over the rest of the year, as policymakers responded to signs of weakness in the jobs market. Lower borrowing costs typically boost demand for oil. The indication of more cuts signals the Fed assesses risk to the economy from unemployment to be significantly higher than from inflation, Claudio Galimberti, chief economist and global director of market analysis at Rystad Energy, said in a client note. "For Brent in particular ... the cut and the two expected by the end of the year will be a bullish factor, which will in part counter the bearish OPEC+ unwinding strategy," he said, referring to increased oil supply from members of the Organization of the Petroleum Exporting Countries and allies. On the demand side, U.S. crude oil stockpiles fell sharply last week as net imports dropped to a record low while exports jumped to a near two-year high, showed data from the Energy Information Administration. However, a rise in distillate stockpiles (USOILD=ECI) , opens new tab by 4 million barrels, versus market expectations of 1 million barrels, raised concern about demand in the world's top oil consumer, pressuring prices. Overall, global oil demand averaged 104.4 million barrels per day (mpd) through September 17, a year-over-year rise of 0.520 mbd, JP Morgan said in a client note. Year-to-date, demand was up 0.8 mbd, just shy of the bank's projected 0.83 mbd. "While flight volumes in the U.S. and China are easing as the summer travel season winds down, activity in Europe, the Middle East, and Latin America continues to grow," JP Morgan said. https://www.reuters.com/business/energy/oil-prices-little-changed-after-fed-rate-cut-2025-09-18/
2025-09-18 00:52
Third deal collapse in 7 years raises concern, analysts say Santos says it was willing to finalise deal with ADNOC's XRG Investors expect to reap benefits from two Santos projects Santos shares slide to three-month low SYDNEY, Sept 18 (Reuters) - Australian gas producer Santos' (STO.AX) , opens new tab shares fell nearly 14% on Thursday after a consortium led by Abu Dhabi National Oil Company scrapped its $18.7 billion bid for the company, saying commercial terms could not be agreed. While analysts raised concern about a third failed takeover bid for Santos in seven years, investors shrugged it off, saying the company was set to benefit from two projects due to start producing soon in Australia and Alaska. Sign up here. "They should just get on with managing the business and hopefully the cash flows will come through and be reflected in the share price over time," said Andy Forster, a portfolio manager at Argo Investments, a top 10-shareholder in Santos. XRG, ADNOC's overseas unit, baulked at proceeding with a deal after it was revealed capital gains tax payments were due soon on Santos' assets in Papua New Guinea, according to a person familiar with the matter. Santos had expected XRG to make the payments, worth several hundred million dollars, which the consortium objected to, said the person who could not be named as they were not permitted to speak to media. XRG declined to comment, and Santos said it would not make any comment beyond its statement released early on Thursday. Santos, Australia's second-largest gas producer, said in the statement it told the XRG consortium on Monday it was willing to finalise a deal at $5.626 a share. The original offer in June was made at $5.76 a share, worth A$8.89 at the time, but adjusted for Santos' recent dividend payment. Taking into account net debt, the deal valued Santos at about A$36.4 billion ($24.2 billion), which would have made it Australia's largest ever all-cash corporate buyout, according to FactSet data. Santos shares dropped to A$6.61 in early trading Thursday, their lowest price since June 10, and were heading for their worst day in more than five years. The benchmark S&P/ASX200 was down 0.64%. INVESTORS SANGUINE FOR NOW The decline brings Santos back to its trading levels before the bid emerged in June, with the fall blamed on the deal not going ahead, the takeover premium being removed and arbitrage funds selling the stock. "We're not entirely unhappy with this development," said Romano Sala Tenna, a portfolio manager at Katana Asset Management, which holds Santos shares. "I don't think it should push ahead with breaking up its core assets as it's entering a really nice phase. It's done the heavy lifting of developing these assets and shareholders will want to start to reap the fruits of that work," he said, referring to Santos' Barossa gas project off northwestern Australia and its Pikka oil project in Alaska. The question, he said, was what Santos would do next on projects it has put on the backburner, including its Narrabri gas project and El Dorado oil and gas project, both in Australia. XRG pulled the offer on Wednesday and said "a combination of factors, when considered collectively, have impacted the Consortium's assessment of its indicative offer." The deal's collapse will now put pressure on Santos' board. "Another failed transaction creates doubt in the market. It's unlikely Santos remains in its current form in time with investors and management looking for alternative ways to create value," said Adam Martin, an analyst at E&P. Santos previously rejected a $10.8 billion offer from private equity-backed Harbour Energy in 2018 and walked away from talks with its bigger Australian rival Woodside Energy (WDS.AX) , opens new tab, to create a possible A$80 billion oil and gas giant. "Santos has a clear strategy, strong leadership and high-quality growth opportunities across our global portfolio. The board is confident these strengths will deliver long-term value for shareholders," Santos Chair Keith Spence said in the statement. Jarden, the investment bank, on Thursday downgraded its rating on Santos from overweight to underweight and cut Santos' 12-month price target by 16% from A$8.40 to A$7.05 per share. ($1 = 1.5035 Australian dollars) https://www.reuters.com/business/energy/santos-stock-slumps-187-billion-adnoc-led-deal-collapses-2025-09-17/
2025-09-18 00:48
SEC commissioners vote to open crypto ETF floodgates Listing standards approval is latest push by crypto-friendly Trump administration Trading could begin in host of new products in October Sept 17 (Reuters) - The Securities and Exchange Commission voted on Wednesday to approve proposed rule changes by three national securities exchanges, enabling them to adopt generic listing standards for new cryptocurrency and other spot commodity exchange-traded products. The commission vote removes the last remaining hurdle to dozens of new spot ETFs tied to cryptocurrencies ranging from solana to dogecoin. In July, the SEC issued an order spelling out the details of the listing standards, which specify the criteria an asset manager and the exchanges -- the NYSE, Nasdaq and Cboe Global Markets -- must meet in order for a new spot crypto ETF to be approved without a lengthy, customized regulatory review. It is the latest step taken by the administration of President Donald Trump to bring crypto assets into the mainstream. Sign up here. Until now, the SEC has handled every spot crypto ETF filing on a case-by-case basis, and required two separate filings, one from the exchange that plans to list the product and one from the asset manager, to receive approval from different divisions. The new process will cut the maximum time from filing to launch to 75 days from 240 days, or longer still. "This is a watershed moment in America’s regulatory approach to digital assets, overturning more than a decade of precedent since the first bitcoin ETF filing in 2013," said Teddy Fusaro, president of Bitwise Asset Management. In a press release, SEC Chair Paul Atkins described the approval by commission members as a way to foster innovation and reduce barriers to digital asset products. The first ETFs likely to launch under the new rules are those tracking solana and XRP. Asset managers began filing these with the SEC more than a year ago, but regulators have yet to approve spot crypto ETFs other than those tracking bitcoin and ethereum. Even then, the debut of the bitcoin ETFs in January 2024 came only after years of struggle and a legal battle. Under the administration of former President Joe Biden, the SEC had moved slowly to consider spot crypto ETFs. In contrast, the Trump administration aligned itself firmly with the crypto community, pledging to take a more favorable view of digital assets. "The gates are open but there’s still a lot of work to be done," said Steve McClurg, CEO of Canary Capital, which has multiple products waiting for approval. Speaking on Monday, ahead of the SEC ruling, he said that even after the commission vote, "marketing plans, legal filings, work with service providers all have to be addressed, based on the new roadmap." The generic listing standards offer a few pathways for asset managers to seek spot ETF approval. Steve Feinour, a partner at Stradley Ronon who has worked on some of the pending applications, said he expects most will turn to the provision allowing expedited approvals for crypto ETFs that have had futures contracts regulated by the Commodity Futures Trading Commission in existence for at least six months. He expects the first products could debut as soon as October. "Not every token is going to currently qualify, but (the SEC approval) will open up the floodgates," Feinour said. https://www.reuters.com/sustainability/boards-policy-regulation/sec-paves-way-crypto-spot-etfs-with-new-listing-rules-2025-09-18/
