London open: Now it´s Japan´s turn

10th May 2013 08:27

The UK market opened with moderate gains on Friday morning, after a breakout - overnight - by the Japanese Yen, in its cross against the US dollar, apparently stoked risk appetite in capital markets globally. More important perhaps, that move in FX markets is a reflection of the relative fundamental strength of the American economy versus what some hedge-funds seem to consider is a terminally-ill Japan. Simply put, it would seem that now its "Japan´s turn" to have a go at trying to restore the health of its economy, although it remains to be seen whether its trade partners will concur (at this weekend´s G7 meeting, for example) and its policymakers grasp the opportunity, comments Alex Bueso, Editor-in-Chief at Digital Look. Acting as a backdrop, speaking at the high-profile Ira Sohn event on Wednesday Kyle Bass, of hedge-fund manager Hatmann Capital, predicted that Japan will be consumed by a debt crisis which will surpass the US sub-prime crash. Perhaps, but for now, and as Sebastien Galy - currency strategist at Societe Generale in New York - told the Financial Times, 'hedge funds are now in "Abenomics nirvana'."In any case, the Yen last night broke above the 100 Yen barrier against the greenback, after a month-long flirt with that 'glass ceiling', for the first time since early 2009. Coincidentally, that is when global financial markets were finally able to find their feet following the Great financial near-meltdown of 2007-2008. Back in the UK, the balance of trade will be released at 09:30, and while the figure is not expected to show the UK is rebalancing, growth has been better-than-expected, and in the words of George Osborne, the economy is "healing," a sentiment which some economists now seem to be echoing. Stateside, the US Treasury will release its latest monthly budget statement this evening. Not to be missed either, at least three Fed policymakers are due to take to the podium this afternoon, including Bernanke himself.BT on the cusp of renewed top-line growth?BT has raised its guidance for free cash flows - by 2015 - to £2.6bn, which came in a whopping 7.5% ahead of market estimates. More important even, the company may be on the cusp of a return to top-line growth, which means the above is not simply reliant on cost-cutting. That, at least, is what Bank of America-Merrill Lynch was telling clients this morning. Analysts at the global broker raised their target on BT to 325p from 275p, while upgrading their recommendation to a buy. TUI Travel narrowed its half-year losses as revenues from unique holiday bookings and on-line sales grew. The leisure travel group reported a loss before tax of £346m for the six months to March-end, a 6.0% reduction on the prior year's £367m loss.Shire has announced that its subsidiary, Shire Development LLC, prevailed in its litigation against Watson Pharmaceuticals in connection with their Abbreviated New Drug Application for a generic version of Shire's delayed release tablets for the induction of remission in adults with active, mild to moderate ulcerative colitis.International Consolidated Airlines Group (IAG) widened its first quarter losses reflecting the costs of restructuring its Spanish carrier Iberia. The parent company of British Airways reported an operating loss of €278m, before exceptional items, up from the previous year's €249m loss. A report by Kofi Annan´s Africa Progress Panel lambasted Eurasian Natural Resources Corp. (ENRC) for "opaque concession trading" which, it calculates, cost the Democratic Republic of Congo $725m as a result of he alleged undervaluation of state assets in five deals. ENRC was involved in three of those.The non-binding recommendations made by the Egyptian State Commissioner's Office to the Supreme Administrative Court, regarding conflicting claims over gold miner Centamin´s Sukari mine "were not positive," the company has announced. 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