<p style=““ class=“text-align-justify“>In Japanese circles, that’s a stark contrast to the assumed interest rate of 1.1% set when the government compiled a draft state budget for the coming fiscal year. That’s the same long-term rate used for the budgets in the last six years even if actual borrowing costs have fallen short of said figure. I mean, in the past, the coupon rate on 10-year JGBs were 0.20% before the latest change at the start of this year made it 0.50%.</p><p style=““ class=“text-align-justify“>Is this yet another hint by Japanese officials that a bigger change to policy is coming? The yen isn’t really reacting much to it though with USD/JPY up 0.3% at 128.90. Meanwhile, 10-year JGB yields are still holding above the 0.50% upper limit set out by the BOJ – the third straight session running – on the eve of tomorrow’s policy decision.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Trade, domestic consumption in China will return to normal in 2023</li><li>China’s economy will see improvement and hit normal growth rate this year</li><li>Financial risks have appeared recently due to factors such as loose regulation</li><li>Working to stabilise property sector, reduce financial risks</li></ul><p style=““ class=“text-align-justify“>Some trivial remarks there and the narrative fits with the ongoing pledge by China to support the economy through the re-opening phase for now. In any case, Xi probably has some bigger issues to sort out as the one <a target=“_blank“ href=“https://www.forexlive.com/news/chinas-population-fell-last-year-the-first-time-since-1961-20230117/“ target=“_blank“ rel=“follow“>here</a>.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>China re-opening expected to encourage oil demand this year</li><li>Expects Chinese appetite to raise oil demand by 0.5 mil bpd</li><li>Demand from China, India could compensate for drop from developed countries</li></ul><p style=““ class=“text-align-justify“>There are still mixed views on the oil market as of late but price has recovered well after the start of the year scare, with WTI crude now hovering back close to $80.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Prior -61.4</li><li>Outlook 16.9 vs -15.0 expected</li><li>Prior -23.3</li></ul><p style=““ class=“text-align-justify“>The standout data in the report here is that the outlook for the German economy has improved drastically into positive territory – the first time since February last year. This comes after a less harsh winter (helping with the energy situation) and as inflation pressures are showing signs of abating in recent months, being cause for economic optimism.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Mild recessionary tendencies will predominate at the start of the year</li><li>Things should only start improving in the spring</li><li>Sees exports increasing by 1.0% in real terms this year, lagging global trade growth forecast of 1.5%</li></ul><p style=““ class=“text-align-justify“>The outlook for Europe can take comfort from lower energy prices to start the year at least, coming off the back of a less harsh winter. However, recession risks are still reverberating and we’ll have to see how things develop in the next few months to get an idea of how severe the downturn might be across the region.</p>

This article was written by Justin Low at www.forexlive.com.