Archive - Apr 11, 2011

As had been anticipated for weeks, and frankly is criminally overdue, Japan has announced that it will expand the evacuation zone around Fukushima to areas beyond a 20 km (12.4 mile) radius to include villages and towns that have had more accumulated radiation, Japan's chief cabinet secretary said on Monday. "These regions could accumulate 20 millisieverts or more radiation over a period of a year," Yukio Edano told a news conference, naming Iitate village, 40km from the plant, part of the city of Kawamata and other areas. The news preceded the latest major 6.6 magnitude aftershock which shook buildings in Tokyo and a wide swathe of eastern Japan on Monday evening, knocking out power to 220,000 households and causing a halt to water pumping to cool three damaged reactors at Fukushima. " The epicentre of the latest quake was 88 km (56 miles) east of the plant and stopped power supply for pumping water to cool reactors No. 1, No. 2 and No. 3. The aftershock also forced engineers to postpone plans to remove highly contaminated water from a trench at reactor No. 2." Also spotted was the now disgraced TEPCO president who had fallen "sick" early on in the crisis and completely disappeared from view. Per Reuters "TEPCO President Masataka Shimizu visited the area on Monday for the first time the disaster. He had all but vanished from public view apart from a brief apology shortly after the crisis began and has spent some of the time since in hospital. "I would like to deeply apologise again for causing physical and psychological hardships to people of Fukushima prefecture and near the nuclear plant," said a grim-faced Shimizu. Dressed in a blue work jacket, he bowed his head for a moment of silence with other TEPCO officials at 2:46 p.m. (0546 GMT), exactly a month after the earthquake hit." But the biggest loser is surely Prime Minister Naoto Kan who saw a landslide drubbing in local elections over the weekend, leaving Japan once again leaderless precisely at a time when it needs focused leadership more than ever.

The barrage of Fed commentary in the coming week could keep the debate over the future of Fed policy in the spotlight, as will the US PPI and CPI data that will be out toward the end of the week. Meanwhile, oil prices continue to climb, with Brent sitting firmly above $120/bbl. Elsewhere, there is a deluge of China macro data on Friday, where we expect inflation to pick-up a touch and activity to remain reasonably solid. The trade data out on Sunday posted a tiny surplus. Import and export growth both improved substantially and were stronger than expected; however, we must be mindful of Chinese New Year effects. On the monetary policy front, we and the consensus expect BoK, BI, and BoC to keep rates unchanged, though the MAS is likely to re-center the SGD NEER.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 11/04/11