Yen Longest Rally in a Year Falters as BOJ October Meets Loom

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The yen’s gains versus the dollar are faltering as the Bank of Japan holds its first of two policy meetings this month, with markets focusing on whether the central bank will signal a willingness to further ease policy amid global economic slowdown and deflationary pressures.

The Japanese currency paused Wednesday after gaining against the greenback on Tuesday when the dollar’s broad gauge posted its longest slide since the market turmoil of August, with last week’s jobs data fueling speculation the Federal Reserve won’t raise interest rates this year. Japan’s currency is little changed since Sept. 30 after posting its first two-month gain since June 2014. San Francisco Fed President John Williams, for a third time in just over a week, reiterated on Tuesday his support for a liftoff in 2015. The yen has benefited less than many peers from dollar weakness amid speculation the BOJ will ease later this month.

The yen was little changed at 120.25 per dollar as of 8:51 a.m. in Tokyo. It gained 0.2 percent on Tuesday. Over the past month, the dollar has risen about 0.8 percent against the yen while losing about 0.9 percent against the euro.

Bloomberg’s Dollar Spot Index, which tracks the currency versus 10 major peers, was at 1,201.88 from 1,200.72 in New York when it declined for a fourth day, the lengthiest stretch since Aug. 19-24, when China’s devaluation caused a global financial rout.

The BOJ is expected to announce no policy changes when it concludes a two-day meeting on Wednesday in Tokyo. Fifteen of 36 economists forecast the bank will add to its already unprecedented easing at the meeting on Oct. 30, a Bloomberg survey showed.

Source : Bloomberg

Big U.S. Firms Hold $2.1 Trillion Overseas to Avoid Taxes -Study

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The 500 largest American companies hold more than $2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated $620 billion in U.S. taxes if they repatriated the funds, according to a study released on Tuesday.

The study, by two left-leaning non-profit groups, found that nearly three-quarters of the firms on the Fortune 500 list of biggest American companies by gross revenue operate tax haven subsidiaries in countries like Bermuda, Ireland, Luxembourg and the Netherlands.

Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund used the companies' own financial filings with the Securities and Exchange Commission to reach their conclusions.

Technology firm Apple was holding $181.1 billion offshore, more than any other U.S. company, and would owe an estimated $59.2 billion in U.S. taxes if it tried to bring the money back to the United States from its three overseas tax havens, the study said.

The conglomerate General Electric has booked $119 billion offshore in 18 tax havens, software firm Microsoft is holding $108.3 billion in five tax haven subsidiaries and drug company Pfizer is holding $74 billion in 151 subsidiaries, the study said.

"At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014," the study said. "All told these 358 companies maintain at least 7,622 tax haven subsidiaries."

Fortune 500 companies hold more than $2.1 trillion in accumulated profits offshore to avoid taxes, with just 30 of the firms accounting for $1.4 trillion of that amount, or 65 percent, the study found.

Fifty-seven of the companies disclosed that they would expect to pay a combined $184.4 billion in additional U.S. taxes if their profits were not held offshore. Their filings indicated they were paying about 6 percent in taxes overseas, compared to a 35 percent U.S. corporate tax rate, it said.

"Congress can and should take strong action to prevent corporations from using offshore tax havens, which in turn would restore basic fairness to the tax system, reduce the deficit and improve the functioning of markets," the study concluded.

Source : Reuters

Asian Stocks Advance Sixth Day as Samsung Jumps on Profit Report

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Asian stocks climbed, building on their biggest five-day advance in almost four years, as Samsung Electronics Co. jumped after quarterly profit topped estimates and investors awaited a Bank of Japan decision on monetary policy.

The MSCI Asia Pacific Index rose 0.2 percent to 129.23 as of 9:03 a.m. in Tokyo, as Samsung rallied 3.8 percent to provide the biggest boost to the regional gauge. The company posted third-quarter profit that beat analysts estimates as the weaker Korean currency boosted component revenue and blunted the impact of price cuts on Galaxy smartphones. Japan’s Topix index added 0.2 percent before BOJ board members and Governor Haruhiko Kuroda decide whether to expand already unprecedented monetary stimulus.

Thirty-four of 36 analysts forecast that the Japanese central bank will forgo further easing, with just two predicting a move, according to a Bloomberg survey. Fifteen are forecasting additional stimulus at the next meeting on Oct. 30.

Australia S&P/ASX 200 Index slid 0.4 percent and New Zealand’s S&P/NZX 50 Index was little changed. South Korea’s Kospi index rose 0.4 percent. Mainland Chinese markets remain closed for a holiday, while Hong Kong is yet to open.

Source : Bloomberg

Japan Topix Rises as Investors Await Central Bank Decision

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Japan Topix index rose for a sixth day as investors await a decision on monetary policy by the central bank.

The Topix added 0.1 percent to 1,477.44 as of 9:03 a.m. in Tokyo, with three stocks rising for every two that fell. The Nikkei 225 Stock Average slipped 0.2 percent to 18,157.39. The yen traded at 120.26 per dollar ahead of the Bank of Japan’s decision, with 34 of 36 analysts surveyed by Bloomberg forecasting Governor Haruhiko Kuroda won’t expand on record monetary stimulus.

While just two of 36 analysts surveyed by Bloomberg last week expect a move Wednesday, 15 are forecasting extra stimulus at a meeting on Oct. 30. People familiar with deliberations at the BOJ said officials as recently as last week saw little need for more easing.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.2 percent after the underlying gauge fell 0.4 percent in New York on Tuesday as a rout in biotechnology shares snapped the longest rally in U.S. stocks this year.

Source : Bloomberg

Selloff in Biotech Shares Drags Nasdaq Composite, S&P 500 Lower

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A selloff in biotechnology shares dragged the Nasdaq Composite Index lower as equities retreated after nearing their highest levels since the August selloff.

The Standard & Poor’s 500 Index ended its longest winning streak this year, after surging yesterday near where an advance faltered at the end of August, and another rally ran out of steam after the Federal Reserve stood pat on interest rates last month. The Nasdaq Biotechnology Index tumbled 3.8 percent, while energy and raw-materials shares rose as investors continued to favor the beaten-down sectors.

The S&P 500 fell 0.4 percent to 1,979.96 at 4 p.m. in New York, after reaching a two-week high Monday. The Nasdaq Composite sank 0.7 percent, weighed on by biotechs’ decline.

The S&P 500 ended a five-day advance that had restored almost $700 billion to U.S. equity prices, as expectations for a Federal Reserve interest-rate increase were pushed out into next year. That sent the dollar lower and boosted energy, raw-material and industrial shares amid speculation that a weaker U.S. currency will lift profits for multinational companies which benefit when their overseas earnings are converted back to dollars.

A slowdown in emerging markets driven by weak commodity prices forced the International Monetary Fund to cut its outlook for global growth this year to 3.1 percent from a July forecast of 3.3 percent. Next year the world economy will expand 3.6 percent, less than the 3.8 percent projected in July, the fund predicted.

Source: Bloomberg