Japan’s real gross domestic product (GDP) grew by an annualized 0.7% in the second quarter of 2016, compared with a preliminary estimate of 0.2%. However, this was still lower than the revised

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20160912.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 5 - 9 September 2016

Japan’s real gross domestic product (GDP) grew by an annualized 0.7% in the second quarter of 2016, compared with a preliminary estimate of 0.2%. However, this was still lower than the revised 2.1% annualized growth in the first quarter of 2016. On a quarter-on-quarter (q-o-q) basis, Japan’s economy grew 0.2%, compared with a preliminary figure of 0.0%. Industrial production growth in Malaysia eased to 4.1% year-on-year (y-o-y) in July from 5.3% y-o-y in June. On a month-on-month (m-o-m) basis, the Industrial Production Index fell 2.2% in July.

*     The People’s Republic of China’s (PRC) consumer price inflation fell to 1.3% y-o-y in August from 1.8% y-o-y in July, the lowest level since October 2015. The headline inflation rate in the Philippines slipped to 1.8% y-o-y in August from 1.9% y-o-y in July, which was within the Bangko Sentral ng Pilipinas forecast of 1.6%–2.4% for the month. The Producer Price Index for the manufacturing sector in the Philippines fell 4.1% y-o-y in July following a 4.2% y-o-y drop in June.

*     Bank Negara Malaysia decided in its Monetary Policy Committee meeting on 7 September to maintain its overnight policy rate at 3.00%. The Bank of Korea’s Monetary Policy Board decided on 9 September to keep the base rate unchanged at 1.25%.

*     Japan’s current account surplus widened to JPY1.9 trillion in July from JPY974.4 billion in June. The PRC’s exports fell 2.8% y-o-y in US dollar terms in August after falling 4.4% y-o-y in July. Imports on the other hand rose 1.5% y-o-y in August after falling 12.5% y-o-y in the prior month. Malaysia’s merchandise exports fell 5.3% y-o-y in July to MYR59.9 billion from MYR63.2 billion in June. Imports also decreased 4.8% y-o-y in July to MYR57.9 billion from MYR61.1 billion due to lower imports of intermediate goods and consumption goods. The merchandise trade deficit of the Philippines stood at USD2,053 million in July, down from USD2,098 million in June but up from USD1,475 million in July of last year.

*     Manufacturing production in the Philippines expanded in July, with the Value of Production Index and Volume of Production Index recording y-o-y growth rates of 5.6% and 10.1%, respectively. A survey conducted by Caixin–Markit showed that the PRC’s service sector gained in August, with the Purchasing Managers Index for services rising to 52.1 from 51.7 in July.

*     Last week, the Government of Indonesia raised IDR2.58 trillion from its first sale of Islamic savings bonds. The savings sukuk (Islamic bonds) were offered only to Indonesian retail investors. The bonds carried a maturity of 2 years and are nontradable. The Bureau of the Treasury in the Philippines issued PHP65 billion worth of 10-year Retail Treasury Bonds with a 3.5% coupon. The auction committee originally announced the offering at PHP30 billion but increased it to PHP65 billion amid buoyant demand.

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

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