Yen edges up after Japanese officials vow to defend currency

Events: South Korean president Yoon Suk Yeol begins a state visit to the UK. US vice-president Kamala Harris gives a speech in London about artificial intelligence. Swedish defence minister Pål Jonson speaks at a Norwegian Atlantic Committee seminar. European Commission president Ursula von der Leyen visits Bosnia and Herzegovina.

Central banks: Fabio Panetta becomes governor of Banca d’Italia, succeeding Ignazio Visco. Sarah Breeden becomes Bank of England deputy governor of financial stability. Thomas Jordan, Swiss National Bank governing board chair, speaks at its annual watchers’ conference.

Economic indicators: Nationwide issues October housing price index for the UK. Switzerland’s purchasing managers’ index data for October is published. Norway and the UK release PMI data for manufacturing.

Corporate results: UK retailer Asos presents full-year financials, while rival Next issues a trading statement. Carmaker Aston Martin Lagonda and media group Thomson Reuters publish third-quarter earnings.

Financial markets: Stock exchanges are closed in Hungary and Poland for All Saints’ Day.

China’s Kweichow Moutai said it would increase factory gate prices by 20 per cent, as one of the country’s biggest companies seeks to boost profits.

The price rise — the first in six years — will affect distributors rather than retail consumers.

Moutai sells China’s best-known version of baijiu, a strong alcoholic spirit that is a fixture of both official and informal entertaining nationwide.

Citi analysts estimate that wholesale prices of Moutai products in first-tier cities stand at about Rmb2,670 ($365) a bottle, marginally down from Rmb2,790 at the end of August.

Shares in Kweichow Moutai, one of China’s most valuable listed companies, rose 6.3 per cent on Wednesday.

Asian markets traded with mixed results on Wednesday, as investors digested Japan’s decision to loosen its control of bond yields and key economic indicators from across the region.

Japan’s Topix rose 2.2 per cent and South Korea’s Kospi added 0.9 per cent. Hong Kong’s Hang Seng index fell 0.2 per cent and China’s CSI 300 gained 0.2 per cent.

Japanese markets were boosted by a weaker yen, which slid as much as 0.9 per cent the previous day after the Bank of Japan loosened its capping of 10-year government bond yields. The yen reclaimed 0.3 per cent on Wednesday.

A private survey of Chinese manufacturing activity released on Wednesday showed that activity contracted in October.

South Korea’s exports rose for the first time in more than a year, driven by strong demand for cars and petroleum products, adding to positive signs for the country’s economic outlook.  

Exports increased 5.1 per cent from a year earlier in October, according to data from the customs office on Wednesday, which was weaker than a median 5.5 per cent gain surveyed by Reuters.

They swung from a 4.4 per cent decline in the previous month and marked the first annual increase since September 2022.

Exports to the US jumped 17.3 per cent while shipments to China fell 9.5 per cent. Car exports surged 19.8 per cent while petroleum shipments rose 18 per cent. 

Disapproval of Israel’s conduct in its war against Hamas is spreading across South America, with Colombia and Chile recalling their ambassadors on Tuesday hours after Bolivia severed diplomatic ties with the Jewish state.

Colombian president Gustavo Petro, who has previously lambasted Israel’s treatment of Palestinians, wrote on social media that “if Israel does not stop the massacre of the Palestinian people, we can’t be there”.

Chile recalled its ambassador in response to “unacceptable violations of international humanitarian law committed by Israel in the Gaza Strip”, the foreign ministry said.

Earlier on Tuesday, Bolivia broke diplomatic relations with Israel, accusing it of crimes against humanity.

China’s manufacturing activity contracted in October, according to a closely-watched private gauge, dashing hopes for a recovery.

The Caixin purchasing managers’ index for manufacturing came in at 49.5 for the month, well below the 50.8 forecast from analysts polled by Reuters.

The reading puts the sector back into contraction territory after two consecutive months of expansion, which some economists had pointed to as the first signs of a belated turnaround in China’s economic fortunes.

On Tuesday, the official PMI, which places greater emphasis on larger, state-owned groups, also missed estimates and slipped back into contraction territory at 49.5.

Danish wind energy giant Ørsted announced on Tuesday that it will cease operations on two offshore projects in a major blow to the nascent US sector. 

The company said it had “no choice” but to stop the development of its Ocean Wind I and II projects off the New Jersey shore, citing “high inflation, rising interest rates and supply chain bottlenecks”. 

The announcement is a setback for US climate ambitions and threatens to slow President Joe Biden’s plans to deploy 30 gigawatts of offshore wind by 2030. His Inflation Reduction Act included lofty subsidies for offshore wind developers. 

The Ocean Wind projects promised to generate more than 2GW of offshore wind power in New Jersey.

Events: Undocumented immigrants face a deadline to leave Pakistan, with Afghanistan’s government saying more than 60,000 of its nationals have returned home since September 23. French president Emmanuel Macron visits Kazakhstan. China takes over as UN Security Council president.

Economic indicators: The Japan Automobile Dealers Association releases new vehicle sales for October. Hong Kong will provide retail sales data for September.

Corporate results: Japanese groups Kyocera, Nippon Steel, TDK and Toyota issue second-quarter figures, as does India’s Tata Steel. Once-highflying Chinese group Luckin Coffee issues third-quarter earnings.

The number of ships allowed to cross the Panama Canal daily will be slashed in the coming months as climate change increasingly rocks global trade.

Crossings will be limited to 25 a day beginning this week, then gradually reduced to 18 per day by February 2024, canal authorities said on Tuesday. The new limit represents roughly half of average daily demand.

Canal authorities cut crossings for the first time ever earlier this year, allowing 31 daily, down from 36 a day.

More than 3 per cent of world trade passes through the century-old canal, which relies on freshwater to operate its locks and is experiencing one of its worst droughts on record.

US stocks notched their first three-month losing streak since the start of the Covid-19 pandemic, even as they closed higher on the final October trading session, a day before the Federal Reserve’s policy decision.

The S&P 500 advanced 0.6 per cent on Tuesday, while the tech-heavy Nasdaq Composite rose 0.5 per cent. The indices fell by 2.2 per cent and 2.8 per cent in October, respectively, their first three-month losing streaks since March 2020.

Stocks have endured a rough few weeks amid a bond market sell-off that has sent Treasury yields to multiyear highs.

The 10-year Treasury yield was up 0.05 percentage points to 4.93 per cent on Tuesday, up from 4.57 per cent at the end of September.

US secretary of state Antony Blinken will make another visit to Israel on Friday and then travel to other countries in the Middle East.

He will make the trip “for meetings with members of the Israeli government, and then will make other stops in the region”, the state department said on Tuesday.

Blinken visited Israel earlier this month, and also visited Arab allies of the US including Jordan, Qatar, Saudi Arabia, the United Arab Emirates and Egypt.

Bolivia has severed diplomatic ties with Israel, becoming the first country in South America to make the move since Hamas launched its surprise attack on the Jewish state in early October.

Bolivia’s foreign ministry announced the decision on Tuesday, accusing Israel of carrying out crimes against humanity in its war with Hamas.

The leftist government of Bolivia’s Movement to Socialism party — in power for much of the last two decades — has often criticised Israel for its treatment of Palestinians, and previously broke ties in 2009.

Relations were restored in 2020 during a brief period of rightwing government in the gold and gas exporter.