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FC: ASIAN CLOSING REPORT: FRIDAY – 25TH – AUGUST – 2017 August 25, 2017 at 05:25AM

Asian equity markets traded mostly higher (NIKKEI +0.6%, S&P/ASX -0.1%, SHANGHAI COMPOSITE +1.2%) despite the lower finish on Wall Street as investors avert their attention to the Jackson Hole summit. Ahead of the summit, Dallas Fed Governor Kaplan said he has not lost faith in inflation returning to 2%, adding the natural rate of US employment may be lower. Kaplan stated he is not in favour of raising the Fed’s 2% inflation target. On the data front, Japan’s national CPI was in line with expectations in July, up 0.4% y/y, while excluding fresh food rose 0.5% y/y and excluding food and energy gained 0.1%. The yen was unchanged following the data. We also heard from a couple of Japanese official, Chief Cabinet Secretary Suga said additional sanctions against North Korea will be imposed by Japan. In later comments, he said now, the economy is not in the situation that requires considering an extra budget, while Economy Minister Motegi said in extraordinary parliamentary session this autumn, they do not expect the government to submit a supplementary budget. In other news, the PBoC set the yuan mid-point at 6.6579 against the Dollar drained a net 330 Bln yuan for the week via OMOs.
Key Headlines:
* Dallas Fed Governor Kaplan said he has not lost faith in inflation returning to 2%, adding the natural rate of US employment may be lower. Kaplan stated he is not in favour of raising the Fed’s 2% inflation target.
* Japan National CPI Data (Jul)

• Y/Y +0.4% versus +0.4% expected, previous +0.4%

• Ex. Fresh Food Y/Y +0.5% versus +0.5% expected, previous +0.4%

• Ex. Food, Energy Y/Y +0.1% versus +0.1% expected, previous 0.0%
* Japan PPI Services Y/Y (Jul) +0.6% versus +0.8% expected, previous +0.8%
* The PBoC set the yuan mid-point at 6.6579 against the Dollar and skipped OMOs today

• The PBoC drained a net 330 Bln yuan for the week via OMOs
* Japan Chief Cabinet Secretary Suga said additional sanctions against North Korea will be imposed by Japan. In later comments, he said now, the economy is not in the situation that requires considering an extra budget.
* Japan’s Economy Minister Motegi said in extraordinary parliamentary session this autumn, they do not expect the government to submit a supplementary budget