26 December 2011: China, Japan to back direct currency trade

FTSE 100 5513 Up 102bp
S&P 500 1265 Up 90bp
NIFTY 50 India 4766 Up 111bp

Major Stories

  • China, Japan to back direct trade of currencies
    • Japan govt says it will promote the direct trading of Yen and Yuan without using the intermediary dollar, and will encourage market development for FOREX companies
    • Japan will also apply to buy Chinese bonds next year in a view to reduce currency trading risks and costs
    • China is Japan’s biggest trading partner with ~ $340bn worth of transactions last year
  • Asian stocks surge, while Dollar holds losses
    • Asian stocks continued on the up for a fifth-consecutive day
    • Dollar maintained losses after confidence in US economy rose, while Yuan surged to a 17-year high
    • In commodities, Gold is at $1599 per ounce, while Copper declined 120bp to $8735/metric ton
  • Samsung to buy Sony’s stake from LCD JV
    • Samsung, world’s largest TV maker, will buy Sony’s stake in S-LCD corp for ~ $935mn in cash
    • Sony is looking to streamline operations; they are estimated to lose $2.2bn in year to March
    • This will be Sony’s fourth consecutive annual loss
    • Sony envisages ‘substantial savings’ starting January
  • China may establish Credit-Rating agencies
    • Central bank governor says China should reduce reliance on overseas rating agencies
    • China to consider Govt backed rating agencies as an alternative to the top-three global agencies (Moody’s, Ftich’s, and S&P)
    • Chinese officials feel that these rating agencies have influenced the financial markets to a large degree

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