Newscasts - Asia Markets Briefing: Yen rallies as Japan's factory activity slips

LG Chem

24/07/2024 10:00

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Source: 'Reuters - Business videos'

Description: The Japanese currency gained after data released today showed
that factory activity contracted slightly in July as output and new orders
fell, with firms under pressure from higher prices. However, the expansion in
the service sector helped overall activity in Japan's private sector return to
growth in July.
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Video Transcript:

Japan’s Nikkei closes at one-month low as the Yen rallies. Welcome to
Asia Markets Briefing. I'm Ludovica Brignola. The Japanese currency gained
after a data released today showed that factory activity contracted slightly
in July as output and new orders fell with firms under pressure from higher
prices. Japan manufacturing Purchasing Managers Index slipped to 49.2 in July
from 50 in June. However, the expansion in the services sector helped overall
activity in Japan’s private sector return to growth in July. And a
stronger Yen is also dragging Japanese shares lower. The Nikkei is in the red
also tracking a decline in US stocks overnight. A stronger Yen tends to hurt
exporter shares as it decreases the value of overseas profits in Yen terms.
But there's a sea of red elsewhere in Asia too. China's Yuan slipped to its
lowest point in more than eight months as commodities-linked currencies
broadly lost further ground on a bleak outlook for Chinese demand. Energy is
the worst performing sector of the Shanghai Composite. Let's take a look at
oil prices, and oil is rising after three sessions of declines supported by
falling US crude inventories and growing supply risks amid wildfires in
Canada. WTI is trading at $77 a barrel and Brent at $81. Taiwan's Foxconn, the
world's largest contract electronics maker, said it's planning to invest CNY1
billion, to construct a new business headquarters in Zhengzhou in China. The
company, that's also Apple’s biggest iPhone assembler, is benefiting from
strong demand for servers for artificial intelligence applications with its
customers including AI chip darling NVIDIA. South Korea's LG Energy Solution
is in talks with about three Chinese suppliers to produce low-cost electric
vehicle batteries for Europe, a senior executive said. Competition is set to
intensify after the EU imposed extra tariffs on China-built EVs. The global EV
industry is grappling with a slowdown in demand and pressure to lower prices
to match cheaper Chinese rivals. Producer prices rose slightly in June in
South Korea, accelerating for the seventh straight month. The market’s
attention will focus on second quarter GDP data set to come out on Thursday.
Economists polled by Reuters expect it to have gone up only slightly by 0.1%
after first quarter GDP growth came out far stronger than estimates. A number
of Japanese companies are reporting earnings on Thursday. Car giant Nissan has
full-year 2024 and Q1 2025 results out. The carmaker itself predicted that its
operating profits for 2024 would be JPY600 billion or $3.8 billion, a 5.5%
increase on 2023. That's it from your Asia Markets Briefing