Economics

The Brexit as an ASEAN Kickstarter


The European Union and ASEAN have very different models of economic integration. Yet ASEAN and its members worry about what Britain’s exit from the European Union may mean for the future of ASEAN. Brexit provides a powerful motivation to get the ASEAN Economic Community (AEC) agenda right.

Women Running for High Office, this One in Tokyo


On 31 July, just over 11 million voters in Tokyo will be asked to return to the ballot boxes to vote for a new governor. This will happen just three weeks after the conservative Liberal Democratic Party (LDP) government under Shinzo Abe was returned to power in the upper house.

The BOJ's Kuroda Opts for Low Hanging Fruit


Bank of Japan Governor Kuroda appears to be the central banker that the markets have the most difficulty in reading.  The activist Governor provides the barest of tweaks to what is by nearly any reckoning among the most aggressive monetary policies by a high-income economy.  Moreover, much of the important data reported during the BOJ's meeting, including inflation and consumption were weaker than expected. 

A Wild Ride into the Weekend


Tomorrow could be among the most challenging sessions of the third quarter.  The focus is primarily on Japan and Europe, but the US reports its first estimate of Q2 GDP.  After a six-month soft patch that heightened fears in some quarters that the world's largest economy was headed for a recession, the US economy appears to have returned to trend growth.  It enjoyed good momentum as the quarter wound down, and currently, Q3 GDP is also projected to be above trend. 

Trump Leads the Republicans to Splitsville on Trade


No issue better illustrates the agony and self-inflicted wounds in the Republican Party than the Trump-inspired clashes over the future of US trade policy.  While the Democratic Party has been wracked by deep divisions over trade for three decades — fuelled by opposition from key constituents such as labour and environmentalist organisations — Republicans have been fairly united in the belief that international trade agreements represented an extension of domestic doctrines of deregulation and market competition to the international level.

The Link between Outward-Looking Trade Policies and Rapid Economic Growth


Since trade started being emphasized as a locomotive of growth, export promotion trade policies have become a popular option for countries in search of higher economic growth rates. East Asian countries in particular have witnessed a distinct success in terms of rapid economic growth after the adoption of outward-looking trade policies.

Looking Further Out for Fed Action Clues


After reversing lower yesterday after the FOMC statement, the US dollar has continued to move lower against the major currencies, save sterling.  While the market is not fully confident of a rate cut by the Reserve Bank of Australia, indicative pricing in the derivative markets suggest a UK rate cut has been fully discounted (and a new asset purchase plan may be announced).

International Investment Law's Future Includes Asia


European and North American capital exporting countries have shaped international investment law for most of its history. They pushed for the customary international minimum standard of protection, forged the classical model of bilateral investment treaties (BITs) and now drive the present recalibration of international investment law.

Despite counter-proposals from the ‘South’ over decades, the making of international investment law has been essentially a transatlantic enterprise with the ‘North’ as predominant global rule-maker.

The Fed, on Cue, Meets Expectations


The Federal Reserve met market expectations fully.  It upgraded its assessment of the economy, recognized that the near-term risks had diminished, and remained committed to normalizing monetary policy.  There was one dissent from the steady stance, and it the KC Fed President had already tipped her hand.

Fiscal Stimulus Questions Force Abe's Hand


As uncertainty over Japan's fiscal stimulus roiled the yen and domestic equities, Prime Minister Abe was forced to announce his fiscal intentions earlier than he initially intended.  The JPY27 trillion (~$265 bln) package.  

The details are far from clear, which may help explain why the dollar is in the middle of the two yen range (~JPY104.65-JPY106.55).  Note the high for the week was set on Monday near JPY106.70.  An unspecified part of the spending will be included in fall supplemental budget, which Japan regularly introduces.