The financial week in five charts - Yenterventions, refinery windfalls, and SpaceX's splurge
Open Interest (ROI), every Friday, distills the previous five days' financial data into five charts that highlight the major trends, surprises, and overlooked movements. JAMIE MCGEEVER is a columnist for ROI Markets. The U.S. Treasury has not made its first FX intervention, and it won't make its last. It was a very unusual move. Not least because of the preparations, which included the "to-do list" of U.S. Treasury Sec. Scott Bessent for the yen purchases. The Treasury purchased the yen using euros, not dollars.
Japan's Nikkei soars above 62,000 due to earnings and Middle East optimism. JGBs rally
The Nikkei share index in Japan reached a new record high on Thursday, and Japan's bonds also rose as the financial markets reopened following the holidays. This was due to optimism about'strong' technology earnings and signs of a possible peace agreement in the Middle East. The benchmark Nikkei Index rose by 4.19%, to 62.009.59. It has now broken through the 62,000 barrier for the first ever. The Topix index rose 2.12% to 3,807.84. After a three-day break in trading, the Japanese government bonds (JGBs), rose on speculation that Tokyo authorities had intervened to boost the yen.
Source: Japan considers summer energy subsidies of $3.1 billion as costs increase
Sources with direct knowledge said that the Japanese government was considering renewing its subsidies for electricity and natural gas starting in July for three months. This is because it expects to face higher energy costs due to conflict in the Middle East. Source who refused to be named as it is a 'private matter' said that the subsidies could cover the period from July to September. The budget for the subsidy would probably reach 500 billion yen (about $3 billion). Source: The government will tap reserves for the time being, rather than compiling an?additional budget.
ROI-Japan faces unique oil, bond, FX triple whammy: McGeever
Oil prices are now above $100 a barrel, and bond yields as well as inflation expectations are increasing around the globe. Japan is one of the few advanced economies that are more affected by this crisis than others. Since the start of the war in Iran two months ago, there has been a steady increase in global sovereign bond sales. The 10-year German Bund yield reached its highest level in 2011 and this week the 10-year Japanese Government Bond yield (JGB) closed at its highest since 1997. Japan is unique in the G7 rich nation group when it comes to its vulnerability and exposure to global energy shocks.
ROI-Japan faces unique oil, bond, FX triple whammy: McGeever
Oil prices are now above $100 a barrel. Bond yields and inflation expectation around the world have also risen. Japan is one of the few advanced economies that are suffering more than others. Since the start of the war in Iran two months ago, there has been a steady increase in global sovereign bond sales. The 10-year gilt yield in Britain closed Tuesday above 5.00%, the highest since 2008. In Germany, the 10-year bund yield reached its highest level since 2011. And the 10-year Japanese Government Bond yield (JGB) this week matched the highest close since 1997.
Document shows that the Japanese government has asked wholesalers to switch from Dubai to Brent pricing.
According to a document obtained by on Friday, the Japanese industry ministry has asked domestic wholesalers "to switch to Brent crude oil prices" from the Dubai benchmark when setting gasoline prices. This is an effort to limit price increases. This measure is one of many tools that Japan, which depends on the Middle East to provide?more?than 90% of its oil needs, has used in order to deal with the Iran War disruptions. The measures?have included releasing a portion of oil reserves and considering an intervention in the crude oil futures markets to combat the yen’s vulnerability.
NextEra CEO: NextEra has secured land in Texas to build a giant gas plant that will power data centers
NextEra Energy secured land in?Texas to build a gas-fired power plant that will be used to power a massive data?center. The project is backed by a U.S.Japan agreement. Last week, the power provider revealed that President Donald Trump's administration had approved the construction of two gas plants totaling 10 gigawatts in Texas and Pennsylvania. This will help to meet the exploding electricity demands of data centers. The $33 billion project would be developed by NextEra and operated by them, but jointly owned by the United States of America and Japan.
Oil Prices Drop 8% Ahead of Possible Middle East Peace Talks
Oil prices dropped about 8% on Monday after U.S. President Donald Trump said he would postpone any military strikes against Iranian power plants for five days and cited constructive talks to resolve hostilities in the Middle East, hours before a deadline that threatened to escalate the four-week-old war.Brent futures fell $8.92, or 8.0%, to $103.27 a barrel at 12:31 p.m. EDT (1631 GMT), while U.S. West Texas Intermediate lost $7.17, or 7.3%, to $91.06.Extreme price changes in recent weeks - Brent…
JERA seeks more LNG to hedge growing Middle East risk
JERA, Japan's largest liquefied gas buyer, has begun discussions with global suppliers about possible additional purchases to protect against Middle East supplies worsening. This is despite a major LNG supplier saying the price spike would be short-lived. The U.S./Israeli war against Iran has caused the QatarEnergy LNG plants to be shut down, which has disrupted energy supplies in the Middle East. Qatari Energy minister Saad Al-Kaabi stated last week that it could take several months for normal deliveries to resume.
Minister: Qatar LNG stoppage won't affect Japan's energy supplies immediately
Qatar's LNG production halt caused by Iranian strikes won't affect Japan's supply of energy immediately. If there is an impact, Japan can tap the spot market, or utilities can buy from one another, said Trade Minister Yosei Acazawa on Tuesday. Akazawa said at a regular news conference that Qatari LNG accounts for 4% (of Japan's total LNG) imports. He also reiterated that the government has no plans to release any oil from its stockpiles while Japan bound ships are stuck in the Middle East. According to the Japanese government, companies in the country have enough LNG to last about three weeks.
Toda begins commercial operation of Japan’s first floating windfarm
Toda Construction announced on Monday that their consortium had started 'commercial operations' at the Goto offshore?wind?farm located in Nagasaki,?southern?Japan. This marks the country’s first commercial floating?wind project. The floating wind farm, which has a capacity of 16.8 megawatts (MW), is the first facility to be certified by a new law enacted by the land and industry ministries to promote the sector. Japan wants to increase its renewable energy capacity in order to meet the 2050 goal to become carbon neutral.
Trump signss order to lower Japanese auto tariffs
On Thursday, U.S. president Donald Trump signed an executive order to lower tariffs announced in July on Japanese auto imports and other products. Seven days after the publication of the order, lower auto tariffs will come into effect. The tariff relief extends back to August 7, in part. Trump's order will also result in a reduction of the U.S. Tariff rate on Japanese vehicles, from 27.5% down to 15%. This is expected to be implemented by the end this month. In Trump's order, Japan "is working toward an expedited implementation" of a 75% rise in United States rice purchases...
Japan tightens regulations on mega-solar project to protect landscape and nature
Officials from the Japanese government have announced that they will tighten regulations, and stop financial support for large-scale projects of solar energy to protect the?environment and preserve landscapes. This is part of the package of countermeasures against mega-scale solar farms that was endorsed by the Japanese government on Tuesday. It also aligns with Prime Minster Takaichi, who has called for limits to large solar projects. She argued that most panels are manufactured overseas, particularly in China, and mega-solar farms risk damaging Japan's natural environment and scenery.
Japan chooses two promising offshore wind farm areas
The Japanese government announced on Friday that it has designated two sites offshore of the prefectures of Akita (Akita) and Fukuoka (Fukuoka) as "promising areas" for developing off-shore wind farms. The Japanese government wants to speed up the development of renewable energy to achieve carbon neutrality in 2050. However, the recent withdrawal by a consortium led to by Mitsubishi Corp from the first major offshore wind auction has shaken confidence. Akita City in the north of Japan and Hibikinada, in Fukuoka to the south are now designated zones.
Japan protests new Chinese structures in East China Sea
The Japanese Foreign Ministry said that China had begun building a new structure between China and Japan, in the disputed East China Sea. It also added that it had lodged a formal protest with China. In a press release, the ministry stated that "it is regrettable" for China to continue with its unilateral development while the exclusive economic zones and continental shelf of the East China Sea are still not defined. The Japanese government also requested that China stop its unilateral development…
Siemens Gamesa and Japan's Industry Ministry agree to wind power cooperation
A ministry official announced that the Japan's Industry Ministry will sign an agreement on Tuesday with Siemens Gamesa Renewable Energy to create a framework of public-private collaboration aimed at creating local supply chains for offshore power. The official in charge of wind power at the Ministry of Economy, Trade and Industry told reporters that the government is promoting collaborations with international players to create a domestic supply network. The official stated that as part of these initiatives…
Japan protests new Chinese structures in East China Sea
The Chinese government has begun the construction of a new structure in the East China Sea on the western side of the geographic equidistance of Japan and China, according to the Japanese Foreign Ministry. It also said that it had lodged a formal protest with China. In a press release, the ministry stated that it was "extremely regrettable" for China to continue with its unilateral development while the exclusive economic zones and continental shelf of the East China Sea are still not delimited.
Tokyo Gas CEO: US is priority market for overseas expansion, Tokyo Gas.
Tokyo Gas will prioritize the U.S. for its overseas expansion because of its high growth potential, CEO Shinichi SASAYAMA said on Wednesday. Japan's biggest city gas provider is looking at a possible offtake of gas from Alaska. Tokyo Gas, Japan's largest buyer of liquefied gas, and JERA (Japan's second-largest LNG buyer) have signed agreements to purchase 1 million metric tonnes of LNG each annually from the $44 billion Alaskan LNG project, which is supported by U.S. president Donald Trump. Sasayama…
Executives say that Japanese utilities could find a replacement for Sakhalin-2 in the event of LNG supply interruption.
Executives said that Japanese utilities JERA, Tohoku Electric Power Co and Sakhalin-2 can find alternative sources of gas if the flow is interrupted. This comes amid U.S. demands to stop energy imports from Russia. This month, the U.S. urged Japan and other Russian energy consumers to stop imports as they push the Kremlin toward ending the Ukraine war. Japan's contracts with Sakhalin-2, which are long-term agreements, cover approximately 9% of its imports of LNG. JERA receives about 2 million tonnes of LNG each year under two contracts that expire in 2026 or 2029. JERA is a major LNG trader.
Japan's JERA receives government subsidy on US ammonia imports
JERA, Japan's largest power generator, has received a 15-year government subsidy to cover the?difference between coal and ammonia prices. It aims to import ammonia to its planned U.S. The government has agreed to provide a subsidy for 15 years, covering the?difference between ammonia and coal prices. JERA aims to import ammonia from its planned?U.S. plant in 2029. JERA, CF Industries, and Mitsui Trading formed a joint-venture in April to build the Blue Point Project, one of the largest ammonia plants with low carbon emissions in the world. The project is estimated to cost $4 billion.