Reformism Koi-Zooms Yen Higher
Ushered in on the campaign that he is a reformist, Prime Minister Junichiro Koizumi’s economic advisory panel today recommended reform measures that could work to eliminate systemic economic inefficiencies plaguing Japanese economic reform.
The panel recommended eliminating public-projects spending, capping the health care budget, and lowering subsidies for local governments. Health care spending is currently valued at 8% of GDP and highway construction (public projects) spending is valued at 10% of the annual budget.
The announcement of the recommendations got the political relief rally in the yen
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The yen was also helped by a weaker euro. Traders are selling euro FX futures
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The dollar index
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The correlated Swiss franc
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Bonds are rallying in anticipation that tomorrow’s jobs report will show rising unemployment which would keep the pressure on the Fed to stay on the aggressive in cutting interest rates to stimulate the economy. This view was supported today by initial jobless figures out today that showed first-time claimants rose to their highest level of the month.
July unleaded gasoline futures
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