Retail sales in the world’s third-largest economy fell by 2.8 percent in July on an annual basis, according to Japanese government data released on Monday.
While the expectations in the market were towards a 1.7 percent decrease, an increase of 3.9 percent was recorded in June.
The Japanese yen (USDJPY) saw trading in the range of 105.29–105.96 at noon in European stock markets on the first day of the week.
Japanese PM race
Prime Minister Shinzo Abe’s announcement of his resignation on Friday due to his health situation has led to a leadership race within the ruling conservative Liberal Democratic Party (LDP).
The Kyodo newspaper reported that the LDP was planning an intra-party election for September 15 and that Cabinet Secretary Yoshihide Suga had his eyes on the premiership.
While Suga has in-party support from heavyweights like deputy prime minister Taro Aso, he is not as popular among LDP voters as his potential rivals. Shigeru Ishiba, the former defense minister with greater support among the voters, is also a prominent figure.
Regardless of who is the head of the LDP and the prime ministry, it is expected that Abenomics on the economic front and close ties to the US and a strong stance against China in Asia-Pacific on the geopolitical front will be continued.
China announced on Monday that manufacturing activity increased in August as the country continued to recover from the coronavirus outbreak. According to the communist regime’s Bureau of National Statistics, the official manufacturing purchasing managers’ index (PMI) for August came at 51.0, compared to 51.1 in July.
However, the rate of expansion missed expectations. Analysts surveyed by Reuters had expected the August PMI to arrive at 51.2.
While PMI values above 50 indicate expansion, those below this value indicate contraction.
Zhao Qinghe, a senior statistician with the bureau, said severe floods in southern China affected manufacturing activities in August.
The Indian military said on Monday that in a new flare-up between the two nuclear-armed countries, its troops blocked an attempt by Chinese forces to cross a controversial borderline in the Ladakh region in the western Himalayas.
An Indian military official, who asked to remain anonymous, told Reuters that the preventive action by Indian troops was enough to deter Chinese troops and that the situation did not turn into a conflict between the two sides.
The Chinese Foreign Ministry denied reports of any border violations by the People’s Liberation Army (PLA) troops.
The Indian army said the most recent incident occurred on the shores of Pangong Tso lake on Saturday night, and the two sides have continued to face each other since April.
In June, during the most serious military conflict between the two Asian giants in more than half a century, 20 Indian soldiers and an unknown number of Chinese soldiers were killed in a skirmish in the nearby Galwan valley. Then both sides agreed to withdraw, but tensions persist.
Soldiers of the two nuclear-armed countries are under strict orders not to use firearms.
Indo-Pacific countries, especially the US and Japan, are on the side of India against China, which has border disputes with almost all its land and sea neighbors except North Korea.
The highly sensitive gold ounce (XAUUSD) entered the week with a slight increase and traded in the range of 1954–1976 dollars.
EU warning to Turkey
The European Union’s executive branch, the EU Commission called for dialogue with Turkey in a statement on Monday and demanded from Ankara to refrain from unilateral steps fueling tensions in the eastern Mediterranean
In a briefing, Monday, a spokesperson for the European Commission underlined that if dialogue does not bear fruit, the EU will turn to sanctions.
“As well as sticks (sanctions), there will be carrots too to get Ankara to engage seriously in dialogue. These carrots could be progress on a new customs union and more money for the refugee program,” the person said under condition of anonymity,” a senior EU official told Reuters anonymously on Friday.