What arrives early in the first morning morning of the last month every quarter, and carries more weight than CPI, construction numbers or employment figures in Japan?
Japanese Capital Expenditures!
CapEx was up 5.5% YoY in the third quarter of 2014, and since the data release it has sent Nikkei 225 futures up by 1.3%! The yen has been brought to within a hair of 119 (a small move, but still) on the USD/JPY rate. Spot prices across major Japanese indices are up roughly 1% at the moment, indicating that things are very good indeed on the Japanese markets. Japan simply sees corporate spending finally coming back, and this is good news for circulating money throughout the economy, and might indicate vastly increased bonuses for December, which would really spark consumer/household spending and give a great shot in the arm to the economy!
And how does China celebrate being the second largest equity market by market capitalization? By giving that title up almost immediately it looks like. PMIs for manufacturing came in at 50.3 vs. prior month dittos of 50.8, and Hong Kong indices are falling strongly in pre-market trading. We’ll get Japanese PMIs shortly, along with the HSBC final manufacturing PMI slightly later. The Shanghai A-Shares Top 50 are up roughly 0.5% on the news (more easing to come?), while the Hang Seng Index is down 1.5% (!) in pre-market trading, and the HSCEI is down 0.5% roughly… ouch… Let’s see how this develops throughout the day.