David Fuller and Eoin Treacy's Comment of the Day
Category - Japan

    Eisai Shares Jump Most on Record on Alzheimer Drug Data

    This article by Kanoko Matsuyama for Bloomberg may be of interest to subscribers. Here is a section: 

    Eisai Co.’s shares had their biggest gain on record after partner Biogen Idec Inc.’s experimental drug for Alzheimer’s slowed progression of the disease in an early-stage study.

    The Japanese drugmaker’s shares climbed as much as 21 percent to 8,748 yen in Tokyo trading today, headed for the largest gain since Bloomberg started tracking the data in 1974.The benchmark Topix Index rose 0.5 percent.

    Biogen’s drug BIIB037 reduced beta amyloid, a protein fragment, in the brains of Alzheimer’s patients. It also cut cognitive decline, with higher doses and longer treatment resulting in increased improvement in an early-stage trial of 166 patients announced on March 20.

    Eisai has an option to co-develop and co-promote BIIB037 with Biogen. The two companies are likely to equally split profits if the drug is successful in the last-stage trial as part of their Alzheimer’s disease collaboration, Thomas Wei, an equities analyst at Jefferies Group LLC, said in a note to clients.

     

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    Japan Hobbles Out of Recession With Growth Below Estimates

    This article by Keiko Ujikane for Bloomberg may be of interest to subscribers. Here is a section: 

    “The disappointing output figures indicate that the Bank of Japan’s view on growth is too optimistic,” Capital Economics said. “We still believe that the Bank will announce more easing at the late-April meeting.”

    The BOJ last month raised its growth forecast for the fiscal year starting in April to 2.1 percent, with Governor Haruhiko Kuroda saying slumping oil prices will boost growth.

    Kuroda also said the drop in oil could delay inflation reaching the BOJ’s 2 percent target next fiscal year, and some economists see a risk of prices falling briefly this summer.

    While the Bank of Japan is projected by economists to boost stimulus later this year, some officials inside the central bank think further monetary easing to shore up inflation would be a counterproductive step for now, according to people familiar with the talks. They are concerned it could trigger declines in the yen that damage consumer confidence.

     

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    Sliding Oil Triggers LNG Drop as Indian Demand Seen Rising

    This article by Anna Shiryaevskaya for Bloomberg may be of interest to subscribers. Here is a section: 

    LNG prices in Japan, the world’s biggest buyer of the fuel, will probably plunge 35 percent in 2015 and Indian costs will decline 33 percent, according to Energy Aspects Ltd., a London- based consultant. Costs in Asia will this year average below $10 per million British thermal units for the first time in four years as new projects in Australia and the U.S. boost supply through 2016, Bloomberg New Energy Finance said.

    Most LNG in Asia is linked to crude costs with a time lag of several months, so Brent’s 49 percent drop in the second half of 2014 hasn’t fully filtered into prices. Global demand for the gas chilled to minus 170 degrees Celsius (minus 274 Fahrenheit) will rise 9.8 percent this year amid increased imports by India and southeast Asia, after climbing 0.5 percent in the first nine months of 2014, according to Sanford C. Bernstein.

    “We are already seeing, at current prices, renewed interest from Indian buyers,” Laurent Vivier, vice president for strategy and market analysis at Total Gas & Power, said Monday by e-mail. “There is some flexibility in the demand as well. When prices fall to current levels, it creates additional demand.”

     

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    Email of the day on the one day 8% decline in DXJ

    Your comment regarding the reasoning behind DXJ's fall by 8% the day the NIKKEI was up 389 points is technically and politically "correct". 

    Nevertheless it is a rip off for the average investor. Even knowing in advance that the fund was about to pay distributions one would expect a drawdown of about 1-2 % max. A figure of 8 % (on a rising market!) is an insult to investors.

    I would really like to know whether legal grounds for prosecution of the issuer (WisdomTree) exist. In any case this is not a product to be recommended as an investor should be more concerned in getting the market direction right than checking whether he or she are going to be ripped off by the issuer ! The SEC will be contacted anyway.

     

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    Email of the day on DXJ divergence with the Nikkei 225

    Do you know why DXJ is down over 8% today when the Nikkei was up 389 points?

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    Yen Heads for Biggest 3-Day Gain in 18 Months; Kiwi Advances

    This article by Lananh Nguyen and Andrea Wong for Bloomberg may be of interest to subscribers. Here is a section:

    Even after recent gains, the yen has slumped 4.9 percent in the past three months, the worst performer after Norway’s krone among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar advanced 6.3 percent and the euro rose 1.9 percent.

    The Bloomberg Dollar Spot Index fell for a third day before a report tomorrow forecast to show U.S. retail sales increased for a second month in November.

    “Retail sales are really important tomorrow,” Steven Englander, head of Group of 10 currency strategy at Citigroup Inc. in New York, said by phone. “A good retail sales number would at least set investors up for putting on long-dollar positions at the beginning of next year.” A long position is a bet the dollar will increase in value. 

     

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    Email of the day on the outlook for 2015

    Hi David & Eoin, I wanted to get FTM thoughts and opinion on where the best investment returns could be had over the next 12 months and what would be the key things to watch for? Thanks for an excellent service 

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    Yen Drop to 1998 Low Plausible as Abe Goes to Polls

    This article by Kevin Buckland, Rachel Evans and Liz Capo McCormick for Bloomberg may be of interest to subscribers. Here is a section: 

    Strategists are seeing more weakness in the yen on bets Prime Minister Shinzo Abe will do whatever it takes to haul the economy out of recession after government and Bank of Japan stimulus sent the currency down 14 percent since June.

    “Once you start to push on the dam, there’s enough pressure and it starts to break, you can create these explosive moves in terms of the water cascading lower,” Sebastien Galy, a senior currency strategist at SocGen in New York, said yesterday by phone. “It can get uncontrolled and some of the moves that we’ve seen in the yen don’t seem to be normal moves in the sense that they’re very aggressive.”

    Abe’s call this week for a snap election fed into the growing bearish sentiment for the yen, as did his decision to delay a sales tax increase needed to rein in the world’s biggest debt burden. The yen already tumbled 27 percent since he took office in December 2012, fueled by government largess, a determination to help exporters, and central bank bond-buying that’s driven inflation above sovereign yields.

     

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