2025-10-21 06:58

Katayama appointed as Japan's first female finance minister Katayama said yen's real value is closer to 120-130 per dollar A former finance bureaucrat, she has knack for FX diplomacy Her experience drafting budget may help Takaichi do big spending Economic reality may ease pressure on BOJ to delay rate hike TOKYO, Oct 21 (Reuters) - The appointment of Satsuki Katayama as Japan's next finance minister on Tuesday could give markets cause to pause before pushing the yen too low, but it might also help the country's new prime minister, Sanae Takaichi, find fresh ways to fund bold economic stimulus plans, analysts said. Takaichi's appointment of Katayama as her finance minister - overseeing currency policy, debt management and the budget - means Japan now has its first female premier as well as its first woman in the top financial job. Sign up here. In an interview with Reuters in March, Katayama, a 66-year-old veteran upper house lawmaker and former finance ministry bureaucrat, said Japan's economic fundamentals suggest the yen's real value is closer to 120-130 per dollar. Those comments were made when the yen had fallen to around 150 against the dollar on market expectations that the Bank of Japan would go slow on monetary tightening. The dollar briefly fell to around 150.50 yen on a local media report that Katayama will get the job, before recouped losses to climb above 151 yen. "Given her past remarks, it seems Katayama favours reversing a weak yen. Markets may have seen that as similar to the views of U.S. Treasury Secretary Scott Bessent," said Akira Moroga, chief market strategist at Aozora Bank. Speaking to reporters after her appointment, Katayama said it was desirable for foreign exchange rates to move stably reflecting fundamentals. She declined to comment on BOJ policy. Takaichi was voted in as Japan's first female prime minister on Tuesday, breaking the glass ceiling for women in a country where men still wield most power - before breaking some more glass with her appointment of Katayama. The yen and bond yields fell after the parliamentary vote on market expectations that Takaichi, a proponent of expansionary fiscal and monetary policy, would deliver big spending and push back against an early BOJ rate hike. KATAYAMA AN OUTSPOKEN AND DECISIVE INSIDER A former finance ministry bureaucrat well-versed in fiscal affairs, Katayama has a knack for currency diplomacy, and has befriended former and incumbent executives alike at the ministry overseeing exchange-rate policy. She is known for being outspoken and for her punchy decision-making, which contrasts with incumbent finance minister Katsunobu Kato, who rarely goes off script and keeps a low profile. In the March interview, Katayama had said U.S. President Donald Trump's administration did not want excessive yen weakness versus the dollar. Indeed, Bessent said last week the yen would find its own level if the central bank follows "proper monetary policy" in his latest swipe at the slow pace of BOJ rate hikes. The appointment of Katayama comes at a time of rising living costs, blamed in part on higher import prices caused by a weak yen. Those factors have hurt households and the ruling party's approval ratings. As a former bureaucrat, Katayama knows well the inner workings of the finance ministry's budget drafting. While her background at the finance ministry could prod her to call for fiscal discipline, some analysts say she could use her expertise to help Takaichi find ways to fund her bold spending plans. "She'll know how to find sources of revenue if Takaichi wants to expand fiscal spending," said Hiroyuki Machida, director of Japan FX and commodities sales at ANZ. "Personally, I think this appointment will accelerate 'Takaichi-trade'." Katayama said she would focus on revitalising the economy with expansionary fiscal policy. She will also be heading the ministry that oversees official communication with the central bank, although little is known about her stance on BOJ rate hikes. Economic and political reality could prevail as Japan faces challenges different from a decade ago, when former premier Shinzo Abe deployed the "Abenomics" mix of fiscal and monetary stimulus that Takaichi still praises. With inflation exceeding its 2% target, the BOJ's exit last year from a decade-long stimulus and its two rate hikes since then came amid political pressure to combat yen falls. "Japan's current problem is not deflation and a strong yen, but inflation and a weak yen. There's also pressure from Washington for the BOJ to raise interest rates," said Yuichi Kodama, chief economist at Meiji Yasuda Research Institute. "It would be hard for Takaichi's administration to exert strong pressure on the BOJ to delay rate hikes," he said, predicting the chance of a rate increase in December. Markets will focus on Katayama's views on whether the BOJ should keep raising interest rates, which could increase Japan's debt-servicing costs but help keep sharp yen falls in check. "Katayama is a former finance minister bureaucrat and so well informed on the ministry's affairs," said Eiji Douke, chief fixed income strategist of SBI Securities. "She's likely neutral on fiscal and monetary policy." https://www.reuters.com/world/asia-pacific/japans-next-finance-minister-could-unsettle-yen-bears-2025-10-21/

2025-10-21 06:58

UK borrowing 99.8 billion pounds in April-September period Shortfall grows by 13% from a year earlier Deficit also overshoots official forecasts Reeves planning tax increases in November 26 budget LONDON, Oct 21 (Reuters) - Britain's borrowing in the first half of the financial year was the highest on record except during the height of the coronavirus pandemic, keeping up the pressure on finance minister Rachel Reeves as she prepares next month's key budget. The overshoot in the April to September period ran above official forecasts, although Reeves was able to take a crumb of comfort from a cut to the overshoot in recent months. Sign up here. Government borrowing in the first six months of the tax year totalled 99.8 billion pounds ($133.94 billion), up 13% from a year earlier and 7.2 billion pounds more than forecast by Britain's budget watchdog. In September alone, the government borrowed 20.2 billion pounds, pushed up by the costs of debt interest and providing public services which more than offset a rise in tax receipts including Reeves' from the social security hike for employers. The September shortfall was only slightly above the projection from the Office for Budget Responsibility whose forecasts underpin government budgets. It was lower than a median forecast of a 20.8 billion pound deficit in a Reuters poll of economists. The borrowing in the first six months of the year was the second highest for the period since records began in 1993 and was only bigger in 2020 at the height of the COVID-19 pandemic. However, the Office for National Statistics revised down government borrowing in the first five months of the financial year by 4.2 billion pounds, around half of which it had previously announced. Reeves has said she is looking at tax increases and spending cuts in her budget on November 26 to show investors that she can remain on track to meet her fiscal rules. "The chancellor faces an increasingly difficult balancing act ahead of the autumn budget, with her fiscal headroom all but exhausted by a mix of weaker growth prospects, higher borrowing costs and rising spending pressures," Nabil Taleb, economist at PwC UK, said. Reeves wants to balance day-to-day spending with tax revenues by the end of the decade. Tuesday's data showed the current budget was 71.8 billion pounds in deficit in the April-to-September period, 17% higher than a year earlier. Reeves said last week she would like a bigger fiscal buffer for meeting her targets than the 9.9 billion pounds of headroom that she previously gave herself, but creating one would involve tough trade-offs on tax and spending. Sterling was little changed against the U.S. dollar and the euro after the borrowing figures were released. ($1 = 0.7451 pounds) https://www.reuters.com/world/uk/uk-borrowing-outstrips-forecasts-again-first-half-tax-year-2025-10-21/

2025-10-21 06:47

Gold hit record high of $4,381.21/oz on Monday Gold prices are poised to rise further, analyst says Focus on US inflation data due on Friday Silver down over 4% Oct 21 (Reuters) - Gold prices fell 2% on Tuesday as investors booked profits after the metal hit another record high in the previous session, driven by expectations of U.S. interest rate cuts and strong safe-haven demand. Spot gold was down 2.1% at $4,264.91 per ounce, as of 1119 GMT, having hit an all-time high of $4,381.21 on Monday. U.S. gold futures for December delivery fell 1.9% to $4,278.50 per ounce. Sign up here. The dollar index (.DXY) , opens new tab rose 0.3%, making bullion more expensive for holders of other currencies. "Gold prices are still yet to go much higher, but the speed is being a bit aggressive and as a result of that, we will get pullbacks each time we hit those fresh highs," said Nitesh Shah, commodities strategist at WisdomTree. A combination of geopolitical and economic uncertainty, sustained central bank buying, strong investment demand and expected U.S. interest rate cuts has pushed gold 63% higher this year. Investors' focus is now on the U.S. consumer price index (CPI) data, due on Friday. The data is expected to show a 3.1% year-over-year increase for September, reinforcing market expectations for the Federal Reserve to lower interest rates by 25 basis points at its meeting next week.FEDWATCH Gold, a non-yielding asset, tends to benefit from a low-rate environment. Asian equities gained on Tuesday, buoyed by hopes of easing trade tensions between the U.S. and China, while Japan's Nikkei advanced as Sanae Takaichi prepared to become the nation's next prime minister, pressuring the yen. "There are still many market participants that did not participate in (gold's) rally and are looking to get exposure if there is a price setback, limiting the downside for now, in my view," said UBS analyst Giovanni Staunovo. Elsewhere, spot silver dropped nearly 4.3% to $50.19 per ounce, platinum shed 2.8% to $1,592.65 and palladium lost 4% to $1,440.73. Increased silver flows from the U.S. and China to London's spot market have eased liquidity constraints in the world's largest over-the-counter precious metals hub, according to traders and analysts. https://www.reuters.com/world/india/golds-record-run-pauses-investors-book-profits-2025-10-21/

2025-10-21 06:40

WARSAW, Oct 21 (Reuters) - Polish security services have detained eight people suspected of preparing to carry out acts of sabotage in various regions, Prime Minister Donald Tusk said on Tuesday. Officials have said Poland has been targeted with tactics such as arson and cyberattacks in a "hybrid war" waged by Russia to destabilise nations supporting Ukraine in its war with Russia, which has denied such accusations. Sign up here. "ABW (the internal security agency), in cooperation with other services, detained eight people in various parts of the country in recent days, suspected of preparing acts of sabotage," Tusk wrote on X. "Further operational activities are continuing," he added, but gave no details. On X, the minister responsible for special services, Tomasz Siemoniak, said, "The matters ... concern reconnaissance of military facilities and critical infrastructure elements, the preparation of means to carry out acts of sabotage, and the direct execution of attacks." https://www.reuters.com/world/polish-services-detained-eight-people-suspected-preparing-acts-sabotage-says-pm-2025-10-21/

2025-10-21 06:36

Government wants power retailers to secure years of supply in advance JERA contract expiration already lifting futures trading Market small versus Germany but could be as big, analysts say Growth could see impact from emission trading, new power market TOKYO, Oct 21 (Reuters) - Japan's budding power futures market could be set for a growth spurt as a government proposal requiring retailers to secure electricity supply as much as three years in advance is likely to spur hedging activity to protect against price fluctuation. Beginning as soon as for fiscal 2030, the industry ministry wants retailers to lock in 50% to 70% of capacity to stabilise electricity prices and help generators plan for fuel procurement and investment. Sign up here. It aims to set details by year-end including for a new market for longer term physical power contracts and how to price them. Futures trading is already accelerating ahead of the March expiration of 10-year supply agreements that top power generator JERA has with the retail units of parents Tokyo Electric Power (9501.T) , opens new tab and Chubu Electric Power (9502.T) , opens new tab, sources said. With the expiration, JERA is obliged to offer electricity to all retailers equally, through private bilateral deals or the open spot power market, raising the prospect of more trading of futures contracts - agreements to buy or sell assets such as energy at a certain price on a particular date. The consequent increase in market liquidity is likely to attract both energy firms and financial players at home and abroad, further spurring hedging and speculative trade, analysts said. "Japan could achieve exchange-traded power market volume of roughly 2,500 terawatt-hours by 2030, which would make it one of the world's biggest traded power markets," said Eurasia Group Managing Director Henning Gloystein, noting many utilities, banks, trading houses and industrial firms have yet to enter. JAPAN'S POWER FUTURES MARKET HAS EXPERIENCED RAPID GROWTH Japan's power futures market has grown the quickest globally over the past five years to become the seventh biggest as firms hedge against geopolitical risk, extreme weather events and increased power generation from unpredictable renewable sources. Improved liquidity such as from the increased involvement of suppliers of thermal and renewable power has also drawn foreign investors. Trading on top power futures platform EEX Japan, a unit of European Energy Exchange, doubled to 102.52 TWh in January-September versus the same period a year earlier, more than 20 times higher than in 2021, the earliest year for comparable data. Volume on the Tokyo Commodity Exchange (TOCOM) surged nearly sevenfold over the same nine-month period to 3.96 TWh, roughly 10 times the level in 2020. "Fundamentally, our supply is in physical form, but if we can hedge our exposure through financial instruments such as futures, we'll certainly do so," said Hisaki Endo, managing director of Japanese power at JERA Global Markets. "While I can't quantify it, our activity has been contributing to improving EEX liquidity," he said, adding that his trading team will eventually double staff from 75 now. POWER FUTURES MARKET IN JAPAN COULD BE AS BIG AS IN EUROPE JERA, which supplies about 30% of Japan's electricity, has not disclosed the size of its expiring contracts but said they account for "a significant portion" of sales. It began the power sales process for fiscal 2026 and beyond in late 2022. As some of its supply shifts to market-based deals, the need for both JERA and retailers to hedge against price fluctuation is likely to rise. Also, retailers are likely to become increasingly active in the market as they seek to meet the proposed procurement requirements. "In Europe, futures markets are typically twice the size of the annual electricity consumption. In Germany, 12 to 13 times larger," said Steffen Riediger, EEX director of business development. "In Japan, we stand at roughly 0.2 times consumption. That gives you an idea of how much space for development there still is," he said. Unlike Germany, Japan cannot import power from neighbours so must rely on domestic generation and market development, said Masa Oppo Odaka, vice president for commodity markets at Rystad Energy. Japan's "still nascent" market therefore has the potential to be bigger than Germany's, he said. EEX last week began offering futures contracts that match Japan's financial year that begins in April. It plans to add contracts in December for the Chubu region of Japan, expanding beyond Tokyo and Kansai. TOCOM also plans to offer Chubu-area products next spring and a service linking spot trading on the Japan Electric Power Exchange (JEPX) with futures to improve convenience for power generators and retailers. "We aim to grow futures volume to match Japan's total electricity consumption by boosting domestic hedging demand and enhancing liquidity through higher overseas participants," said TOCOM President Takashi Ishizaki. IMPACT ON MARKET GROWTH FROM OTHER GOVERNMENT INITIATIVES Still, the market's development could be contingent on the impact of other government initiatives, such as the 2028 launch of a medium-to-long-term physical power trading market and the second phase of a carbon emissions trading system next year. "The extent to which emission allowances will affect electricity prices remains unclear, and details of the new market are still unknown," said EEX Japan CEO Bob Takai. "As a result, some participants have become cautious." Depending on its design, the new physical power market could either support or compete with futures trading, he said. https://www.reuters.com/business/energy/japan-power-futures-poised-expansion-new-rules-spur-hedging-2025-10-21/

2025-10-21 06:21

MADRID, Oct 21 (Reuters) - Spanish gas grid operator Enagas (ENAG.MC) , opens new tab said on Tuesday it is on track to meet its 2025 targets after swinging to a profit for the first nine months of the year. Gains from disposals and the upwards revision of the amount it was awarded in an arbitration on an investment in Peru, as well as operating costs in line with last year, contributed to the swing. Sign up here. The company posted a 262.8 million euro ($306.5 million) profit compared with a 130.2 million euro net loss in the same period in 2024, when results included a capital loss on the sale of an asset in the United States. Earlier this year, the firm pledged to invest more than 4 billion euros by the end of the decade, mostly in hydrogen infrastructure, as it diversifies into managing a network of hydrogen infrastructure while also targeting ammonia and CO2 capture businesses. ($1 = 0.8575 euros) https://www.reuters.com/business/energy/spains-enagas-swings-profit-first-nine-months-2025-2025-10-21/