By: Mike Campbell
For the ninth consecutive period, figures for Japanese factory output have strengthened, from their disastrous position at the heart of the global economic storm. Japan is an exporting nation and demand from importing nations is improving; most notably in Asian markets. The value of Japanese exports to the region stood at $30bn in November, showing a 4.7% rise over the figure for October. The data records the first rise in fourteen months and points to a recovery. Data suggested that Japanese factory output was up by 2.6% for November and was stronger than many analysts had predicted. However, Japan is still in the grip of deflationary fears; wages have continued to slip over the last 18 months dropping by 2.8% in November in comparison with their levels of a year before. Unsurprisingly, Japanese domestic demand remains weak and consumer expenditure was 1% lower for November year-on-year (the 15th consecutive fall). The Japanese consumer is reluctant to spend their money in a climate of fear over job security and against a backdrop of falling prices.
Oil Price Rises Towards The $80 Mark
Heating oil futures have been bullish on forecasts of colder weather in the USA and declining stocks. The north-west of the USA is the world’s largest market for heating oil. London Brent crude oil closed at $77.32 a barrel.
The US Energy Information Administration is set to release details of US oil reserves in the course of the week. If the reserves have been significantly drawn down, it would be an indicator of growing demand, due to the putative recovery, and may be enough to nudge the price up over the $80 mark by the end of the year.