Consumer prices in Japan fell for the sixth consecutive month in September, dipping 0.5% year-on-year (y-o-y), the same pace of decline recorded in Augu

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20161031.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

******************************************************************************

News Highlights - Week of 24 - 28 October 2016

Consumer prices in Japan fell for the sixth consecutive month in September, dipping 0.5% year-on-year (y-o-y), the same pace of decline recorded in August. For the 23rd consecutive month, consumer prices in Singapore contracted in September, albeit at a slower pace of 0.2% y-o-y compared with 0.3% y-o-y in August. The moderation was mainly due to the slower decline in transportation costs, which fell 0.5% y-o-y in September after declining 0.7% y-o-y in August.

*     Real gross domestic product (GDP) growth in the Republic of Korea stood at 0.7% quarter-on-quarter (q-o-q) and 2.7% y-o-y in the third quarter (Q3) of 2016, according to advance estimates of the Bank of Korea. GDP growth was down from second quarter (Q2) 2016 figures of 0.8% q-o-q and 3.3% y-o-y. The slower q-o-q growth in real GDP originated from weaker growth in private consumption, domestic investment, and exports of goods, as well as a quarterly contraction in manufacturing production. Singapore’s manufacturing output increased 6.7% y-o-y in September after gaining only 0.5% y-o-y in August.

*     Hong Kong, China’s exports increased 3.6% y-o-y in September after rising 0.8% y-o-y in August. Imports rose 4.1% y-o-y in September, up from 2.8% y-o-y growth in August. Japan’s exports fell 6.9% y-o-y to JPY5.97 trillion in September, while imports declined 16.3% y-o-y to JPY5.47 trillion. A trade surplus of JPY497.6 billion was recorded in September.

*     On 21 October, the Prime Minister of Malaysia announced the release of the 2017 federal budget with a total allocation of MYR260.8 billion, a 3.4% increase from the 2016 revised budget. The government also announced a 2017 fiscal deficit target of MYR40.3 billion, or 3.0% of GDP, down from this year’s target of 3.1%. The economy is expected to grow 4.0%–5.0% y-o-y in 2017, with annual inflation of 2.0%–3.0%.

*     The Bangko Sentral ng Pilipinas announced that its Monetary Board approved the inclusion of the Chinese renminbi in its official international reserves effective 13 October.

*     The Government of Indonesia raised IDR19.691 trillion from the sale of retail bond series ORI013. The bonds have a maturity of 3 years and a coupon rate of 6.60%.

*     Hong Kong, China’s MTR Corporation issued its first green bond last week. The issue size was USD600 million. The bond has a maturity of 10 years, a coupon rate of 2.5%, and was priced to yield 2.537%. Petron Corporation, an oil-refining and marketing firm in the Philippines, raised PHP20 billion from a dual-tranche, fixed-rate retail bond sale last week. The transaction comprised a PHP13 billion 5-year bond with an interest rate of 4.0032% and a PHP7 billion 7-year bond with an interest rate of 4.5219%.

*     LCY government bond yields last week rose for all tenors in the Republic of Korea; and for most tenors in the PRC; Hong Kong, China; Indonesia; the Philippines; Singapore; and Thailand. Yields fell for all tenors in Malaysia. Meanwhile, yield movements were mixed in Viet Nam. Yield spreads between the 2-year and 10-year maturities narrowed for all markets except in the PRC, Indonesia, and Thailand.

******************************************************************************