International deliveries seen boosting UPS in near term

A United Parcel Service (UPS) logo is seen on a car in center of Warsaw January 16, 2013.

Credit: Reuters/Kacper Pempel

By Sagarika Jaisinghani

Thu Apr 25, 2013 1:59pm EDT

(Reuters) – United Parcel Service Inc (UPS.N), the world’s No. 1 package delivery company, said its international package business will drive results in the near term and that it expects the small-package market to grow faster than the U.S. economy in 2013.

UPS shares were up 2.7 percent in afternoon trading on Thursday after the company reported a higher quarterly profit on strong post-holiday season sales and increased business from online retailers.

The company, which like rival FedEx Corp (FDX.N) is viewed as an economic bellwether because of the volume of goods it handles, said it expects international shipments of packages weighing up to 40 kg (88 pounds) to boost profit in the second quarter.

UPS gets about 20 percent of its business from international deliveries.

“The first quarter was particularly challenging for (international) … but we feel that the business is prospering and global trade, especially within Europe and Asia, will continue to grow,” Chief Financial Officer Kurt Kuehn told Reuters. “So that’s probably the area that we’ll see the most improvement year over year (in the second quarter).”

However, UPS said it expects shipments of heavier goods — most of which form a part of the supply chain service it offers businesses — to remain subdued through 2013.

UPS is coming off a particularly difficult year, when customers cut back on air courier services.

But as consumers shift from air express to cheaper but slower modes of shipping, UPS’s stronger North American domestic ground network puts it in a better position than FedEx, which focuses more on international air shipments.

FedEx cut its full-year forecast last month after a lower-than-expected quarterly profit and said it would step-up restructuring efforts and cut capacity in Asia.

UPS said deliveries for online retailers played a big part in its better-than-expected quarterly profit.

“Increased focus by traditional retailers on using their brick-and-mortar locations as distribution sites is creating more pickups at retail locations for ultimate residential delivery,” Kuehn said on a post-earnings conference call.

The company’s daily package volume in the United States increased 4.4 percent in the first quarter, led by UPS Ground, which delivered 531,000 more packages per day.

“E-commerce has a greater-than-one-shipment-per-purchase benefit because (UPS) puts a few things in the same box, (and) sometimes things are returned using UPS as well,” Morningstar Inc analyst Keith Schoonmaker said.

JUMP ON FEDEX

The company also got a jump start of more than a year over its rival on a service to let customers select from a range of options to schedule dates, locations and times of delivery. FedEx only introduced the service on Tuesday.

UPS’s international package revenue was flat in the quarter ended March 31, while sales in the United States rose 3.4 percent. Total revenue rose 2.2 percent to $ 13.43 billion.

Net income rose to $ 1.04 billion, or $ 1.08 per share, from $ 970 million, or $ 1 per share, a year earlier.

Excluding items, UPS earned $ 1.04 per share.

Analysts on average had expected earnings of $ 1.01 per share, excluding items, on revenue of $ 13.46 billion, according to Thomson Reuters I/B/E/S.

The company reaffirmed its full-year earnings forecast of $ 4.80-$ 5.06 per share.

HEALTHCARE PUSH

UPS also said on Thursday it would buy Hungarian pharmaceutical logistics company, CEMELOG Zrt, to strengthen its healthcare reach in Europe. Terms were not disclosed.

“The emerging markets’ business-to-consumer (offering) and industry specific solutions like healthcare have enormous potential and UPS continues to invest in them,” Chief Executive Scott Davis said.

S&P Capital IQ analyst Jim Corridore, who raised his price target on UPS shares to $ 100 from $ 94, said he expected similar deals after UPS’s unsuccessful plan to buy Dutch delivery firm TNT Express (TNTE.AS) for about $ 7 billion.

UPS dropped plans to buy TNT in January after European regulators said they would veto the deal on antitrust concerns.

UPS shares were up 2.7 percent at $ 85.79 in afternoon trading on the New York Stock Exchange. The shares had gained more than 5 percent in the 12 months to Wednesday’s close but underperformed the S&P 500 .SPX index, which rose 15 percent.

(Reporting by Sagarika Jaisinghani in Bangalore; Editing by Supriya Kurane and Ted Kerr)

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Reuters: Business News

International deliveries seen boosting UPS in near term

Nikkei retreats from near 5-yr high, but up 5.1 pct on week

Fri Apr 12, 2013 3:49am EDT

 * Nikkei sheds 0.5 pct on day, gains 5.1 pct on week * Index heavyweight Fast Retailing weighs * Goldman Sachs expects Nikkei to reach 16,000 in 12 months By Tomo Uetake TOKYO, April 12 (Reuters) - Japanese shares slipped on Friday, coming off a near five-year high, but they still ended the week sharply higher, buoyed by optimism that bold central bank policies would revitalise the economy. The benchmark Nikkei closed 0.5 percent lower at 13,485.14. It opened up 0.1 percent at 13,568.25, its highest level since July 2008, before moving into negative territory. For the week, the benchmark rose 5.1 percent, the third consecutive weekly gain. "It"s been a tremendous week in terms of flow," said Stefan Worrall, director of equity cash sales at Credit Suisse. "It"s certainly less now than last Friday, which was the day after the BOJ decision and we had record flow." Worrall said the impact of the BOJ"s "shock and awe" has been waning a little over the week but there"s still fairly significant buy flow coming in from foreign investors and described the underlying tone as "bullish". "We really need to see the dollar to break above 100 yen in order to catalyze new flow, or acceleration of buy flow. I don"t think the rally is over," he said. Index heavyweight Fast Retailing weighed on the Nikkei, falling 0.9 percent after the Uniqlo operator left its full-year operating profit forecast unchanged at 147.5 billion yen ($ 1.5 billion), slightly below analysts" expectations. The broader Topix gained 0.1 percent to 1,148.57, with 4.57 billion shares changing hands in active trade. That compares with last month"s average trading volume of 3.24 billion shares. Shares in real estate companies rose 3.3 percent and outperformed the overall market as they were expected to benefit most from the reflationary drive. However, financials, which also have risen strongly on hopes for reflation in Japan, fell on profit-taking. The banking sector slipped 0.3 percent, with Sumitomo Mitsui Financial Group down 0.6 percent. "Unless there are strong catalysts to drive the market higher such as the yen weakening further to 100 yen against the dollar, profit-taking is natural given the steep rises," said Yutaka Miura, a senior technical analyst at Mizuho Securities. The dollar last traded around 99.43 yen on Friday, compared with the session high of 99.95 hit on Thursday, its highest level since April 2009. Other notable movers include Sharp Corp, which surged 7 percent after the Nikkei newspaper said the main creditor banks of the bailed-out consumer electronics maker were moving to maintain a 360 billion yen ($ 3.6 billion) loan deal as the company is seen to have met the condition for continued credit. The benchmark Nikkei has surged 52 percent since mid-November when Prime Minister Shinzo Abe unveiled in his election campaign expansionary fiscal and monetary policies to pull Japan out of deflation. OUTLOOK STILL UPBEAT Goldman Sachs said the BOJ"s commitment to beat deflation should be positive for earnings growth and stock prices. While the market may pause near term as investors digest earnings, the Nikkei will likely gain further in the long term, the brokerage said in a report. It raised the Nikkei"s 12-month target to 16,000 from 15,000. Others also shared Goldman"s optimism. "Investors are still looking for buying opportunities in the Japanese market although the current share prices have already factored in expectations for higher profits for this fiscal year," said Naoki Fujiwara, a fund manager at Shinkin Asset Management. He added that investors expect the yen to weaken further and the U.S. economy to recover steadily, which will serve as tailwinds to Japanese equities. 

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Reuters: Financial Services and Real Estate

Nikkei retreats from near 5-yr high, but up 5.1 pct on week

Japan"s Nikkei ends flat after hitting near 5-yr high, govt bonds slip

Tue Apr 9, 2013 3:00am EDT

* Superlong JGBs underperform ahead of 30-yr debt sale Thurs

* Some exporters up as yen falls to lowest since May 2009 vs dlr

* Shares in real estate firms tumble as investors cash in gains

By Dominic Lau and Lisa Twaronite

TOKYO, April 9 (Reuters) – Japan’s Nikkei average ended flat on Tuesday after rising to its highest level in nearly five years, as investors cashed in gains on stocks that had stellar performances after the central bank unveiled massive stimulus moves last week to revive the economy.

Japanese government debt prices eased, with longer maturities underperforming ahead of a 30-year sale later this week, even though the Bank of Japan lost no time in kickstarting the sweeping changes.

“There is some profit-taking after some of the big moves yesterday… Small real estate stocks are still getting up there,” said a senior equity trader at a foreign brokerage in Tokyo. “It’s still a quantitative easing market.”

The real estate sector, which is seen as the biggest beneficiary of Japan’s push to reflate the economy, sank 4.1 percent after rallying more than 26 percent during the previous three sessions.

Within the sector, real estate investment fund Kenedix Inc added 2.8 percent and was the most-traded stock on the main board by turnover.

The Nikkei was flat at 13,192.35 after trading as high as 13,331.39, its highest level since August 2008.

Financial firms, another sector expected to do well due to easing, also succumbed to profit-taking.

Lender Mitsubishi UFJ Financial Group dropped 2.5 percent, consumer financing firm Aiful Corp eased 0.2 percent and Nomura Holdings, Japan’s top brokerage, slipped 0.3 percent. They were the second to fourth-most traded stocks.

On April 4, the Bank of Japan promised to inject $ 1.4 trillion into the world’s third-largest economy in less than two years by buying government bonds across the yield curve as well as riskier exchange-traded funds.

The BOJ on Monday launched its campaign by offering to buy 1 trillion yen ($ 10.3 billion) of JGBs with maturities of between five and 10 years, and 200 billion yen of bonds with maturities exceeding 10 years.

The extraordinary measures, aimed at ending nearly two decades of deflation and economic malaise, have triggered a wave of buying in Japanese equities.

The benchmark Nikkei has surged more than 52 percent since mid-November, when Shinzo Abe promised expansionist fiscal and monetary policies, dubbed “Abenomics”, to revive Japan’s economy during his election campaign. He was elected prime minister the following month.

JGB WEAKER

Japanese government bond prices were weaker on Tuesday. The 10-year yield inched down 1 basis point to 0.530 percent, well above a record low of 0.315 percent hit the day after the BOJ’s policy announcement.

But 10-year JGB futures ended the day 0.33 point higher at 144.67, below their record high of 146.41 marked on Friday but also well off a 10-month low of 143.10 hit during that volatile session.

Longer maturities underperformed, with some investors eyeing Thursday’s 30-year auction as the first test of real demand in the new market order forged by the central bank’s radical programme.

“We are still getting used to a market in which the central bank is the main player, so it’s hard to predict how the auction will go,” said a fixed-income fund manager at a Japanese trust bank.

The 20-year yield added 6.5 basis points to 1.290 percent and the 30-year yield rose 7 basis points to 1.380 percent, although they were still below the level they were trading a day before the BOJ announcement.

Royal Bank of Scotland recommended investors buy the 30-year debt when the yield rose above 1.40 percent.

“We view the 1.2 percent range as a fair level for the 30-year while the BOJ maintains the current policy of buying 800 billion yen from the 10-year-plus sector per month,” it said.

“We expect the period of trading in a broad range of 0.95 to 1.45 percent with this level as the median lasting through October, when investors begin factoring in an end to these purchases.”

MUCH IN PRICE?

Andrew Pease, chief investment strategist for Asia-Pacific at Russell Investments, said the stock market had already priced in a strong rise in company earnings this year.

“If you look at the price-to-book value, which is still below 1.5 times, you know Japan still has got some long-term value,” Pease said.

“It’s still probably OK, particularly to the extent that you know they are going to push the yen down. But most of the reflation rally, I would say, already happened.”

Some exporters were buoyed by a softer yen, which fell as much as 0.3 percent on Tuesday to 99.67 to the dollar, its lowest level since May 2009.

Canon Inc, TDK Corp, Suzuki Motor Corp and camera-to-endoscope maker Olympus Corp rose between 2.1 and 4.3 percent.

Societe Generale highlighted a number of exporters, which it said are “super sensitive” to yen depreciation, including office equipment maker Ricoh Co Ltd, Olympus, heavy machine maker Mitsubishi Heavy Industries Ltd, Honda Motor Co and Canon.

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Reuters: Financial Services and Real Estate

Japan"s Nikkei ends flat after hitting near 5-yr high, govt bonds slip

Japan"s Nikkei ends flat after hitting near 5-yr high, govt bonds slip

Tue Apr 9, 2013 3:00am EDT

* Superlong JGBs underperform ahead of 30-yr debt sale Thurs

* Some exporters up as yen falls to lowest since May 2009 vs dlr

* Shares in real estate firms tumble as investors cash in gains

By Dominic Lau and Lisa Twaronite

TOKYO, April 9 (Reuters) – Japan’s Nikkei average ended flat on Tuesday after rising to its highest level in nearly five years, as investors cashed in gains on stocks that had stellar performances after the central bank unveiled massive stimulus moves last week to revive the economy.

Japanese government debt prices eased, with longer maturities underperforming ahead of a 30-year sale later this week, even though the Bank of Japan lost no time in kickstarting the sweeping changes.

“There is some profit-taking after some of the big moves yesterday… Small real estate stocks are still getting up there,” said a senior equity trader at a foreign brokerage in Tokyo. “It’s still a quantitative easing market.”

The real estate sector, which is seen as the biggest beneficiary of Japan’s push to reflate the economy, sank 4.1 percent after rallying more than 26 percent during the previous three sessions.

Within the sector, real estate investment fund Kenedix Inc added 2.8 percent and was the most-traded stock on the main board by turnover.

The Nikkei was flat at 13,192.35 after trading as high as 13,331.39, its highest level since August 2008.

Financial firms, another sector expected to do well due to easing, also succumbed to profit-taking.

Lender Mitsubishi UFJ Financial Group dropped 2.5 percent, consumer financing firm Aiful Corp eased 0.2 percent and Nomura Holdings, Japan’s top brokerage, slipped 0.3 percent. They were the second to fourth-most traded stocks.

On April 4, the Bank of Japan promised to inject $ 1.4 trillion into the world’s third-largest economy in less than two years by buying government bonds across the yield curve as well as riskier exchange-traded funds.

The BOJ on Monday launched its campaign by offering to buy 1 trillion yen ($ 10.3 billion) of JGBs with maturities of between five and 10 years, and 200 billion yen of bonds with maturities exceeding 10 years.

The extraordinary measures, aimed at ending nearly two decades of deflation and economic malaise, have triggered a wave of buying in Japanese equities.

The benchmark Nikkei has surged more than 52 percent since mid-November, when Shinzo Abe promised expansionist fiscal and monetary policies, dubbed “Abenomics”, to revive Japan’s economy during his election campaign. He was elected prime minister the following month.

JGB WEAKER

Japanese government bond prices were weaker on Tuesday. The 10-year yield inched down 1 basis point to 0.530 percent, well above a record low of 0.315 percent hit the day after the BOJ’s policy announcement.

But 10-year JGB futures ended the day 0.33 point higher at 144.67, below their record high of 146.41 marked on Friday but also well off a 10-month low of 143.10 hit during that volatile session.

Longer maturities underperformed, with some investors eyeing Thursday’s 30-year auction as the first test of real demand in the new market order forged by the central bank’s radical programme.

“We are still getting used to a market in which the central bank is the main player, so it’s hard to predict how the auction will go,” said a fixed-income fund manager at a Japanese trust bank.

The 20-year yield added 6.5 basis points to 1.290 percent and the 30-year yield rose 7 basis points to 1.380 percent, although they were still below the level they were trading a day before the BOJ announcement.

Royal Bank of Scotland recommended investors buy the 30-year debt when the yield rose above 1.40 percent.

“We view the 1.2 percent range as a fair level for the 30-year while the BOJ maintains the current policy of buying 800 billion yen from the 10-year-plus sector per month,” it said.

“We expect the period of trading in a broad range of 0.95 to 1.45 percent with this level as the median lasting through October, when investors begin factoring in an end to these purchases.”

MUCH IN PRICE?

Andrew Pease, chief investment strategist for Asia-Pacific at Russell Investments, said the stock market had already priced in a strong rise in company earnings this year.

“If you look at the price-to-book value, which is still below 1.5 times, you know Japan still has got some long-term value,” Pease said.

“It’s still probably OK, particularly to the extent that you know they are going to push the yen down. But most of the reflation rally, I would say, already happened.”

Some exporters were buoyed by a softer yen, which fell as much as 0.3 percent on Tuesday to 99.67 to the dollar, its lowest level since May 2009.

Canon Inc, TDK Corp, Suzuki Motor Corp and camera-to-endoscope maker Olympus Corp rose between 2.1 and 4.3 percent.

Societe Generale highlighted a number of exporters, which it said are “super sensitive” to yen depreciation, including office equipment maker Ricoh Co Ltd, Olympus, heavy machine maker Mitsubishi Heavy Industries Ltd, Honda Motor Co and Canon.

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Reuters: Bonds News

Japan"s Nikkei ends flat after hitting near 5-yr high, govt bonds slip

Wall Street up on health insurers, S&P near intraday record

1 of 2. Traders work on the floor at the New York Stock Exchange, April 1, 2013.

Credit: Reuters/Brendan McDermid

By Ryan Vlastelica

NEW YORK | Tue Apr 2, 2013 7:10am EDT

NEW YORK (Reuters) – Stock index futures rose on Tuesday, pointing to a rebound from the previous session and tracking a rise in European equities.

* The gain implied by futures puts the S&P 500 again within striking distance of its all-time intraday high of 1,576.09, an important psychological level for investors.

* But moves may be limited for much of this week in the absence of major catalysts before the closely watched U.S. monthly payrolls report on Friday. Last week, the benchmark index set a new all-time closing high after flirting with one for several sessions.

* Telecom shares will be on focus after the Financial Times’ Alphaville blog wrote that Verizon Communications (VZ.N) and AT&T (T.N) have been working together on a breakup bid for British mobile operator Vodafone (VOD.L) (VOD.O).

* Verizon and AT&T, both Dow components, were not active in premarket trading, but U.S. shares of Vodafone gained 5.3 percent to $ 29.84 before the bell. The stock was one of the biggest boosts among European shares .FTEU3, which rose 1 percent.

* Investors will also be looking to data on February factory orders, scheduled for release at 10 a.m. EDT. Orders are seen rising 2.9 percent, compared with a 2 percent drop in the previous month.

* February durable goods are also on tap at 10 a.m., with the release of the Institute for Supply Management-New York’s March index of regional business activity due at 9:45 a.m.

* A weak reading on U.S. manufacturing sparked a decline in Monday’s session, though other indicators have pointed to a strengthening U.S. economy and helped push both the Dow and S&P to record highs.

* On Tuesday, S&P 500 futures rose 6.9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 36 points and Nasdaq 100 futures rose 9.5 points.

* The S&P is up 9.5 percent so far this year while the Dow is up more than 11 percent.

* In company news, BGC Partners (BGCP.O) said it would sell its eSpeed platform to Nasdaq OMX Group (NDAQ.O) for $ 750 million in cash.

* Health care stocks will also be in focus as planned cuts in U.S. government payments for private Medicare Advantage insurers did not materialize. Humana (HUM.N), which derives about two-thirds of its revenue from Medicare Advantage business, rose soared in after-hours trading on Monday.

* Apple Inc (AAPL.O) edged lower in premarket trading. On Monday, the stock was the biggest drag on both the S&P 500 and Nasdaq 100 .NDX after Fidelity Contrafund, a $ 92 billion fund that is the largest active shareholder in Apple, reported that it cut its stake in the iPhone maker by 10 percent during the first two months of 2013.

(Editing by W Simon)

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Reuters: Business News

Wall Street up on health insurers, S&P near intraday record

Dollar near highs vs yen on jobs, Asian shares softer

1 of 7. Visitors cast their shadows on the logo of the Tokyo Stock Exchange, prior to a ceremony marking the end of trading in 2012 at the Tokyo Stock Exchange in Tokyo December 28, 2012.

Credit: Reuters/Kim Kyung-Hoon

By Chikako Mogi

TOKYO | Sun Mar 10, 2013 8:17pm EDT

TOKYO (Reuters) – Asian shares eased but the dollar stayed near multi-year highs against the yen on Monday after surprisingly strong U.S. labor jobs data showed economic recovery there gaining traction.

The MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.2 percent early on Monday, pulled lower by a 0.3 percent drop in South Korean shares .KS11.

The Dow Jones industrial average .DJI posted its fourth consecutive intraday and closing record highs on Friday and the FTSEurofirst 300 .FTEU3 index of top European shares hit a 4-1/2-year peak, while 10-year U.S. Treasury yields rose to an 11-month high of 2.06 percent as investors sold off safe-haven assets.

Nonfarm payrolls jumped by 236,000 jobs last month, above a 160,000 gain forecast and the unemployment rate fell to a four-year low of 7.7 percent from 7.9 percent.

The data was unlikely to spur the Federal Reserve to change its policy anytime soon as the U.S. central bank has said it will keep its near-zero rate stance until the unemployment rate falls to 6.5 percent, as long as inflation does not threaten to top 2.5 percent.

A 1.2 percent gain in U.S. wholesale inventories in January to $ 504.4 billion — the fastest pace of growth since December 2011 — also added to the positive economic outlook.

The dollar was steady against the yen around 96.05, near Friday’s peak hit after the U.S. jobs data of 96.60 yen, its highest since August 2009. The euro was trading at 124.76 yen, retreating from a high of 125.98 yen touched on Friday.

“The U.S. economy shows signs of sustained expansion, with less erratic effects that were typical earlier last year and especially during the entire 2010-2011 period. The tone is more consistent and more continuous,” said Richard Hastings, macro strategist at Global Hunter Securities.

“Much of the recent move in the U.S. dollar is a reflection of more fundamental money flows out of the yen and out of the euro concurrently, and that is enough of an effect — a truly massive effect — to nudge the dollar higher. This is of course a big change from forex conditions years ago.”

Australian shares .AXJO were flat early on Monday as weak metals prices undermined miners and offset a rise in financials stocks on the back of further gains on Wall Street.

The yen’s slide bolstered Japanese equities, with the Nikkei stock average .N225 opening up 0.7 percent and hitting a fresh 4-1/2-year high. .T

Monday showed Japan’s core machinery orders tumbled 13.1 percent in January from the previous month, down for the first time in four months and underscoring the wobbly state of the world’s third largest economy.

Commodities prices were likely to be caught between growing optimism about more solid demand as the global economy improves and the strengthening dollar which makes dollar-denominated commodities expensive for non-dollar holders, analysts said.

Data over the weekend showed China’s uneven economic recovery signaling a looming dilemma for policymakers, as inflation stood at a 10-month high in February while factory output and consumer spending were weaker than forecast.

“Inflation is a policy risk looming large on the horizon,” ANZ said in a research.

“As inflation momentum has strengthened, and the market liquidity conditions remained plentiful due to capital inflows, the PBOC (Chinese central bank) will continue to drain liquidity via open market operations before using a traditional policy tool such as an interest rate hike or reserve requirement ratio hike,” ANZ said.

U.S. crude was down 0.3 percent at $ 91.64 a barrel. <O/R>

(Editing by Eric Meijer)

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Reuters: Business News

Dollar near highs vs yen on jobs, Asian shares softer

EURO GOVT-German Bunds hover near four-week highs

LONDON | Fri Feb 22, 2013 2:14am EST

LONDON Feb 22 (Reuters) – German Bund futures hovered around four-week highs on Friday, with worries about the euro zone’s economic outlook and the Italian elections expected to keep safe-haven debt well bid.

Key for the region’s benchmark bonds will be the amount of three-year crisis loans that banks will pay back to the European Central Bank. Banks are expected to pay back 130 billion euros of the 530 billion euros they took a year ago, when the ECB flooded the banking sector with cash to prevent a credit crunch.

That amount is slightly less than the 137 billion euros which was repaid in January when the first of the two three-year lending operations became eligible for early repayment. At that time, German debt yields briefly rose in line with money market rates on expectations that the excess liquidity in the system would evaporate at a faster pace than initially thought.

Bund futures were last 2 ticks higher at 143.40, having hit a four-week high of 143.60 on Thursday.

Italian elections run the risk of producing a fragmented parliament which could hamper the future government’s reform efforts and Bunds are seen holding firm at least until the results come out.

“(The) extension of (the) risk averse environment depends on key event risk, particularly (this) weekend’s Italian elections,” Credit Agricole said in a note.

The Ifo German business sentiment survey will be watched for further clues on the euro zone outlook after business activity data on Thursday showed the economic downturn in the region unexpectedly worsened in February.

Reuters: Bonds News

EURO GOVT-German Bunds hover near four-week highs

Yen firmer but near lows, Asian shares capped

1 of 7. Electronic information boards display market information at the London Stock Exchange in the City of London January 2, 2013.

Credit: Reuters/Paul Hackett

By Chikako Mogi

TOKYO | Mon Feb 18, 2013 7:46pm EST

TOKYO (Reuters) – The yen remained near recent lows on Tuesday, as attention turned to the appointment of a new Bank of Japan governor.

Regional share markets held to tight ranges as the absence of catalysts and a holiday in the U.S. overnight capped demand.

The yen, which has dropped 20 percent against the dollar since mid-November, fell further at the start of the week after financial leaders from the G20 promised not to devalue their currencies to boost exports and avoided singling out Japan for any direct criticism.

The choice of the next BOJ governor and two deputies has drawn market attention as a gauge to how strongly Prime Minister Shinzo Abe is committed to reflating the economy. The G20′s message was that as long as Japan pursues aggressive monetary easing to achieve that goal, a weaker yen as a result of such domestic monetary policy will be tolerated, analysts say.

“But that means that some other economy’s monetary conditions have been tightened,” said Barclays Capital in a note.

“Japan hasn’t even changed its policy stance thus far, and the effect of expectations of a looser setting have led to limited moves in domestic interest rates, but the sell-off of the JPY has been marked and has clearly caused unease in other economies.”

Market reaction was muted to the release of the minutes of the BOJ’s January 21-22 meeting, when the bank set a 2 percent inflation target and pledged to an open-ended quantitative easing from 2014, but the yen was bought when Finance Minister Taro Aso told reporters Japan has no plans to buy foreign currency bonds as part of monetary easing, a trader said.

The dollar was down 0.2 percent to 93.75 yen, but remained near its highest since May 2010 of 94.465 hit on February 11. The euro also eased 0.3 percent to 125.05 yen, below its peak since April 2010 of 127.71 yen touched on February 6.

The MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was nearly flat.

The Nikkei stock average .N225 opened down 0.6 percent, after closing up 2.1 percent on Monday to approach its highest level since September 2008 of 11,498.42 tapped on February 6. .T

Australian shares .AXJO inched down 0.1 percent on the back of weakness in metals prices, with investors focusing on local corporate earnings for direction after a three-month rally that has taken the market to 4-1/2 year highs.

Seoul shares .KS11 opened little changed, and were expected to struggle to find momentum on worries about the weak yen.

“The market has been taking a breather recently after staging a recovery earlier this month,” said Lee Jae-man, an analyst at Tong Yang Securities in Seoul. “The weaker yen has been priced in to some extent, and the pace of its fall is expected to slow down.”

Disappointing earnings pushed European shares lower on Monday for a third straight session of losses while U.S. markets were closed for the President’s Day holiday.

The euro was steady around $ 1.3348. The currency eased slightly on Monday after European Central Bank President Mario Draghi said in a speech at the European Parliament that “the exchange rate is not a policy target but is important for growth and price stability” and that its rise is “a risk.”

The risk of an inconclusive outcome in Italy’s election this weekend added to investor concerns.

Sterling hovered near a seven-month low against the dollar touched on Monday after a key policymaker made comments about the need for further weakness, while recent poor data has spurred worries of another British recession.

U.S. crude fell 0.4 percent to $ 95.47 a barrel. <O/R>

(Additional reporting by Hyunjoo Jin and Miyoung Kim in Seoul; Editing by Shri Navaratnam)

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Reuters: Business News

Yen firmer but near lows, Asian shares capped

GLOBAL MARKETS-Yen near lows vs dlr, Asian shares ease in subdued trade

Mon Feb 11, 2013 7:42pm EST

* MSCI Asia ex-Japan steady, Nikkei opens up 1.7 pct

* Many Asian markets remain shut for holiday

* Yen hovers near lowest since May 2010 vs dollar

By Chikako Mogi

TOKYO, Feb 12 (Reuters) – The yen hovered near fresh lows against the dollar and Japanese stocks jumped on Tuesday after a U.S. official voiced support for Japan’s drive to beat deflation, assuaging fears that criticism of its aggressive stance on monetary policy would mount.

Asian shares were steady, with many regional bourses shut for holidays. Encouraging data from China late last week was lending support but markets lacked momentum as investors await key events such as the U.S. president’s State of the Union address.

Rhetoric about a so-called currency war was dialled back ahead of a Group of 20 meeting. In addition to U.S. Treasury Undersecretary Lael Brainard saying the United States supports Japanese efforts to end deflation, European Central Bank council member Jens Weidmann said the euro was not overvalued at current levels.

On Monday, the yen sank to its lowest since May 2010 of 94.465 and also plunged over 2 percent against the euro as traders saw Brainard’s remarks as an encouraging sign to sell the yen further.

In early Tuesday trade, the dollar was trading at 94.22 yen and the euro was at 126.35 yen. The euro scaled its highest since April 2010 of 127.71 yen last week.

Japan’s Nikkei stock average opened 1.7 percent higher, after snapping a 12-week winning streak to close down 1.8 percent on Friday.

“While currency moves have been sensitive to officials’ comments in general, people thought any comment from the G20 would trigger yen buying,” said Hiroichi Nishi, an assistant general manager at SMBC Nikko Securities.

“But such worries are receding as she (Brainard) said she supports Japan’s efforts to end deflation.”

The MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, with Australian shares inching up 0.2 percent and South Korean shares opening up 0.4 percent.

Trading resumed in Japan and South Korea but markets remained closed in Singapore, Hong Kong, mainland China, Malaysia and Taiwan.

G20 finance ministers and central bankers meet in Moscow on Friday and Saturday, and G20 officials said on Monday the Group of Seven nations are considering a statement this week reaffirming their commitment to “market-determined” exchange rates.

Currency and equities markets were also looking ahead to President Barack Obama’s State of the Union address later on Tuesday, for any signs of a deal to avert automatic spending cuts due to take effect on March 1.

“We believe that the G20′s take on currency wars, Mr. Obama’s upcoming state of the union address, and data on the current condition of the US economy should help markets assess where the global recovery stands and where we are heading,” Barclays Capital said in a research.

The yen is expected to stay under pressure on expectations that Prime Minister Shinzo Abe will endorse a far more dovish Bank of Japan regime when the current leadership’s term ends next month. The BOJ is expected to refrain from taking fresh easing steps when it meets this week.

Wall Street and world equity markets were little changed in light volume on Monday as a lack of major economic news gave investors little incentive to push prices higher for now, after a robust performance last week.

Encouraging U.S. and Chinese data last week lifted the tech-focused Nasdaq Composite Index to a 12-year closing high and the Standard & Poor’s 500 Index to a five-year peak on Friday.

U.S. crude futures edged down 0.1 percent to $ 96.91 a barrel.

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Reuters: Financial Services and Real Estate

GLOBAL MARKETS-Yen near lows vs dlr, Asian shares ease in subdued trade

Yen near fresh lows versus dollar, Asian shares steady

1 of 9. Visitors cast their shadows on the logo of the Tokyo Stock Exchange, prior to a ceremony marking the end of trading in 2012 at the Tokyo Stock Exchange in Tokyo December 28, 2012.

Credit: Reuters/Kim Kyung-Hoon

By Chikako Mogi

TOKYO | Mon Feb 11, 2013 10:27pm EST

TOKYO (Reuters) – The yen hovered near fresh lows against the dollar and Tokyo stocks jumped back near a 33-month high on Tuesday after markets took comments from a U.S. official as giving Japan the green light to pursue policies that weaken the yen as long as they help beat deflation.

Asian shares were steady, with many regional bourses shut for holidays. Encouraging trade data from China late last week was lending support but non-Japan markets lacked momentum as investors awaited key events such as the U.S. president’s State of the Union address for trading cues.

While Japan has faced some criticism from German and other European officials that it is intentionally trying to weaken the yen with monetary easing, rhetoric about a so-called currency war was dialled back ahead of a Group of 20 meeting in Moscow on Friday and Saturday.

U.S. Treasury Undersecretary Lael Brainard said on Monday the United States supports Japanese efforts to end deflation. But she also mentioned that the G7 has long committed to exchange rates determined by market forces, “except in rare circumstances where excess volatility or disorderly movements might warrant cooperation.

European Central Bank council member Jens Weidmann also said the euro was not overvalued at current levels.

The dollar was trading at 94.22 yen after marking on Monday its highest level since May 2010 of 94.465. The euro was trading at 126.28 yen after the yen fell 2 percent against the euro on Monday, pushing it back towards 127.71 yen hit last week, its highest level since April 2010.

“I think the yen’s weakening is a function of (playing)catch-up,” and not Japan resorting to deliberate devaluation of its currency, said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York.

“It’s the market’s way of saying: we’re convinced there is a movement afoot to reinflate Japan.”

The weaker yen in turn helped bolster sentiment for Japanese stocks, sending the Nikkei average .N225 2.6 percent higher. .T

“While currency moves have been sensitive to officials’ comments in general, people thought any comment from the G20 would trigger yen buying,” said Hiroichi Nishi, an assistant general manager at SMBC Nikko Securities.

“But such worries are receding as she (Brainard) said she supports Japan’s efforts to end deflation.”

The yen is expected to stay under pressure on expectations that Prime Minister Shinzo Abe will endorse a far more dovish Bank of Japan regime when the current leadership’s term ends next month. The BOJ is expected to refrain from taking fresh easing steps when it meets this week.

The MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was little changed. Australian shares AXJO. inched up 0.1 percent led by financials, as investors waited for corporate earnings results.

Trading resumed in Japan and South Korea but markets remained closed in Singapore, Hong Kong, mainland China, Malaysia and Taiwan.

G20 officials said on Monday the Group of Seven nations are considering a statement this week reaffirming their commitment to “market-determined” exchange rates.

Currency and equities markets were also looking ahead to President Barack Obama’s State of the Union address later on Tuesday, for any signs of a deal to avert automatic spending cuts due to take effect on March 1.

“We believe that the G20′s take on currency wars, Mr. Obama’s upcoming state of the union address, and data on the current condition of the US economy should help markets assess where the global recovery stands and where we are heading,” Barclays Capital said in a research report.

Wall Street and world equity markets were little changed in light volume on Monday as a lack of major economic news gave investors little incentive to push prices higher after a robust performance last week.

U.S. and Chinese data last week lifted the tech-focused Nasdaq Composite Index .IXIC to a 12-year closing high and the Standard & Poor’s 500 Index .SPX to a five-year peak on Friday.

U.S. crude futures edged down 0.2 percent to $ 96.88 a barrel while Brent steadied around $ 118.12.

Spot gold stayed near a one-month low.

(Additional reporting by Ayai Tomisawa and Lisa Twaronite in Tokyo; Editing by Edwina Gibbs)

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Reuters: Business News

Yen near fresh lows versus dollar, Asian shares steady

US Air, AMR near $11 billion merger, deal seen within week : sources

A US airways plane takes off behind an American Airlines jet at Ronald Reagan National Airport in Washington April 23, 2012.

Credit: Reuters/Kevin Lamarque

By Soyoung Kim

NEW YORK | Sat Feb 9, 2013 8:45pm EST

NEW YORK (Reuters) – US Airways Group Inc and AMR Corp are nearing an $ 11 billion merger that would create the world’s largest airline and could announce a deal within a week, after resolving key differences on valuation and management structure, people familiar with the matter said.

Under terms of a deal that are still being finalized, US Airways Chief Executive Doug Parker would become CEO, while AMR’s Tom Horton would serve as non-executive chairman of the board until spring of 2014, when the combined company holds its first annual meeting, the sources said.

The deal would come more than 14 months after the parent of American Airlines filed for bankruptcy in November 2011, and would mark the last combination of legacy U.S. carriers, following the Delta-Northwest and United-Continental mergers.

The all-stock merger is expected to value the combined carrier at between $ 10.5 billion and $ 11 billion, and would give AMR creditors 72 percent of the ownership in the new company and US Airways shareholders the rest, they said.

The board of each airline is expected to meet in the middle of the coming week to vote on the proposed deal, and an announcement would likely come in the latter part of the week, the sources said, asking not to be named because the matter is not public.

Negotiations are continuing and could still be delayed or fall apart, they cautioned.

The companies had initially tried to schedule board meetings for Monday, the day that AMR’s creditors committee planned to convene, and had aimed to announce a deal as soon as Tuesday, sources told Reuters previously.

But AMR needed more time to finalize details and the boards of the two airlines are now not expected to gather until around Wednesday, the sources said.

The AMR creditors committee is still meeting on Monday in New York, as initially scheduled, and will continue discussions as the airlines finalize negotiations, they added.

A lawyer for the creditors committee declined to comment. Representatives for AMR and US Airways declined to comment.

A combination with US Airways would create the world’s top airline by passenger traffic and help the two carriers better compete with rivals United Continental Holdings and Delta Air Lines Inc.

A near-$ 11 billion valuation of the combined American-US Airways compares to some $ 12.4 billion market capitalization for Delta, and $ 8.7 billion for United Continental.

The currently planned equity split ratio between AMR creditors and US Airways shareholders implies a roughly $ 3 billion valuation for US Airways and some $ 7.5 billion to $ 8 billion valuation for AMR.

NEW AMERICAN AIRLINES

US Airways will follow through on its agreement with AMR labor unions last year that the combined carrier would be branded American Airlines and be based in Fort Worth, Texas, where AMR is currently based, sources said. US Airways has its headquarters in Tempe, Arizona.

As part of the merger, US Airways will also leave the Star Alliance to join the oneworld global airline alliance, of which American Airlines is an anchor member along with British Airways, the people familiar with the matter said.

The airlines are estimating that a merger will bring about $ 1 billion in revenue and cost benefits, they said.

Horton rebuffed an aggressive takeover push from US Airways early in the bankruptcy process, saying the airline preferred to exit court protection on its own and consider a deal later. But after several months of talks with its own creditors as well as with US Airways, Horton has softened his approach and agreed to consider all options.

A combined American-US Airways would provide the scale to match bigger rivals that are upgrading service and expanding international routes. The merged company would have revenue of $ 38.69 billion based on 2012 figures, ahead of United Continental which had revenue of $ 37.15 billion last year.

The new American would have a solid presence on the important U.S. East and West coasts and on North Atlantic routes, given American’s revenue-sharing joint venture with British Airways and Iberia.

(Reporting by Soyoung Kim in New York, additional reporting by Nick Brown and Karen Jacobs; Editing by Sandra Maler)

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Reuters: Business News

US Air, AMR near $11 billion merger, deal seen within week : sources