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Japanese automakers are facing significant challenges in Southeast Asia as Chinese brands gain market share, particularly in the electric vehicle sector. Despite a long-standing dominance, Japanese companies like Toyota and Nissan are losing ground due to their slow transition to electric models, with sales dropping sharply across the region. In response, they are investing billions to adapt their production for electric vehicles, but the competition from affordable Chinese EVs poses a serious threat to their market position.
Foreign direct investment (FDI) in India surged by 45% year-on-year to $29.79 billion during April-September 2024, driven by strong inflows in services, telecom, and pharma sectors. The April-June quarter alone saw a 47.8% increase, totaling $16.17 billion. Maharashtra led the states with $13.55 billion in FDI, followed by Karnataka and Telangana.
Donald Trump's warning to BRICS nations about imposing 100% tariffs for moving away from the US dollar is deemed unrealistic by the Global Trade Research Initiative (GTRI). They suggest India should prioritize developing a local currency trading system rather than adopting a BRICS currency, emphasizing the need for a transparent financial infrastructure to navigate global trade dynamics effectively.
Global stock markets experienced a rally on Friday, with Wall Street achieving its largest monthly gain in a year, driven by post-election growth optimism. The S&P 500 rose 0.56%, marking a 5.14% increase for November, while the Nasdaq climbed 0.83%, securing a 6.2% monthly gain. Meanwhile, the dollar weakened amid expectations of stronger rates in Japan and easing in Europe.
US stocks ended a shortened trading session higher, with the S&P 500 rising 0.6% to achieve its best month of the year, up 5.7% in November. Treasury yields fell, driven by optimism over President-elect Trump's trade policies and significant inflows into US equities. The Bloomberg Dollar Spot Index declined over 1%, while the yen advanced against the dollar amid expectations of a Bank of Japan rate hike.
BOJ Governor Ueda emphasized that wage trends will significantly influence the central bank's policy decisions moving forward. This focus on wages reflects a broader strategy to address economic conditions and inflation in Japan.
The US Dollar Index has rallied 7% since October 2024, driven by expectations of Trump's economic policies and a less dovish stance from the Federal Reserve. While a potential rate cut in December may support dollar strength, geopolitical tensions and trade restrictions could create volatility, with technical analysis suggesting a range-bound trading scenario for 2025. Historical patterns indicate potential dollar weakness late in the year, followed by renewed strength in January.
IG
Japan's economy could have faced years of deflation starting in 2016 without the Bank of Japan's extensive monetary stimulus program, according to a study by the central bank. The research indicates that price growth would have dipped into negative territory until around 2022 without this unconventional policy.
EUR/JPY and USD/JPY have declined due to rising inflation in Japan, which heightens the possibility of a Bank of Japan rate hike. Meanwhile, AUD/USD is recovering from its November low, with resistance levels noted at ¥161.49-¥162.45 for EUR/JPY and ¥151.95 for USD/JPY.
IG

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