Japan’s current account surplus narrowed to JPY1.95 trillion in April from JPY2.91 trillion in March. The lower surplus was primarily driven by the reversal of the services account to a deficit of JPY295 billion in April from a surplus of JPY180 billion in March. The Republic of Korea’s current account surplus narrowed to USD4.0 billion in April from USD5.8 billion in March. The lower surplus was largely due to the widening of the primary income account deficit to USD5.0 billion in April from USD0.6 billion in March.

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20170613.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 5 - 9 June 2017

The People’s Republic of China’s (PRC) consumer price inflation rose to 1.5% year-on-year (y-o-y) in May from 1.2% y-o-y in April. The rise in inflation was due to an increase in nonfood prices, while food prices fell. Producer prices in the PRC rose 5.5% y-o-y in May, following an increase of 6.4% y-o-y in April. The slower producer price inflation was due to accelerating declines in the prices of ferrous metal mining and nonferrous smelting goods.  

*     Japan’s real gross domestic product growth (GDP) in the first quarter (Q1) of 2017 was revised downward to 0.3% quarter-on-quarter (q-o-q) from the preliminary estimate of 0.5% q-o-q. Based on the revised figures, the Q1 2017 growth was unchanged from the previous quarter. On an annualized basis, Japan’s economy grew 1.0% in Q1 2017, down from the preliminary estimate of 2.2% and lower than the 1.4% annualized growth posted in the fourth quarter of 2016.

*     The PRC’s exports rose 15.5% y-o-y in renminbi-denominated terms in May after rising 14.3% y-o-y in April. Imports also grew faster, rising 22.1% y-o-y from 18.6% y-o-y in the same period. For the month of May, the PRC recorded a trade surplus of CNY281.6 billion. Exports from Malaysia continued their strong growth momentum, gaining 20.6% y-o-y to MYR74.0 billion. Import also remained strong, rising 24.7% y-o-y to MYR65.2 billion. Malaysia posted a MYR8.8 billion trade surplus in May. In the Philippines, total exports grew 12.1% y-o-y to USD4.8 billion, while imports slightly declined 0.1% y-o-y to USD6.9 billion. The Philippines posted a trade deficit of USD2.1 billion in April.

*     Japan’s current account surplus narrowed to JPY1.95 trillion in April from JPY2.91 trillion in March. The lower surplus was primarily driven by the reversal of the services account to a deficit of JPY295 billion in April from a surplus of JPY180 billion in March. The Republic of Korea’s current account surplus narrowed to USD4.0 billion in April from USD5.8 billion in March. The lower surplus was largely due to the widening of the primary income account deficit to USD5.0 billion in April from USD0.6 billion in March.

*     Malaysia’s Index of Industrial Production growth eased to 4.2% y-o-y in April from 4.6% y-o-y in March.

*     On 5 June, the Bank of Thailand relaxed its foreign exchange regulations to enhance the ease of doing business by the private sector through a reduction in compliance costs.

*     FWD Group, a Hong Kong, China-based insurance company issued an unusual perpetual bond callable after 5 years. The bond has an issue size of USD500 million and a zero-coupon for the first 5 years. The bond is initially priced to yield 6.625%.

*     We are pleased to invite you to attend the conference for the release of the June edition of the Asia Bond Monitor, which will be launched at a conference held in partnership with the Asian Development Bank Institute on 23 June in Tokyo, Japan. For further details, please check the invitation (http://asianbondsonline.adb.org/documents/abm_invitation_launch_jun2017.pdf) and meeting agenda (http://asianbondsonline.adb.org/documents/abm_launch_agenda_jun2017.pdf).

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

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