Daily FNArena News - International

ANZ Bank has revised down its growth outlook for Indonesia, but ABN Amro suggests with monthly data showing signs of bottoming it might be time to start looking for opportunities.

The Chinese central bank has lifted reserve requirements for the banking sector, but ABN Amro suggests such action is not enough to slow growth and more needs to be done now before problems escalate.

The OECD has suggested Japan should be conservative when considering future interest rate increases as deflation remains a threat and reducing government debt should be a higher prioroty.

Morgan Stanley economist Andy Xie remains bearish on Asia, suggesting ongoing strength in oil prices is likely to impact on growth unless Asian governments increase interest rates significantly.

China’s growth for the June quarter was higher than expected at 11.3%, leading to renewed speculation of further increases in interest rates. But most experts suggest this is not enough without further adjustments to the exchange rate.

China is expected to report quarterly GDP growth of more than 10% today, leading an increasing number of experts to argue higher interest rates will be needed to curb the growth rate.

Experts are divided as to how soon it will be before the Bank of Japan (BOJ) will be forced to lift interest rates again after last week’s 0.25% increase.

The Bank of Japan has lifted official interest rates by 0.25% in confirmation the economy’s health continues to improve, though analysts suggest no further increases are likely this year.

Traders sold the yen overnight as comments by the Japanese finance minister created fresh doubt as to the size of any move on interest rates following the Bank of Japan meeting today and tomorrow.

GaveKal Research suggests the market is factoring in a series of rate increases in Japan, but the BOJ is more likely to adopt a cautious approach.