Bear market for the Nikkei. The index entered bear territory after the strong yen pushed it down more than 1.3 per cent on Friday, bringing the decline since its May 23 peak to around 20 per cent. (Wall Street Journal) The Topix is down 18 per cent from its May high, but remains up 22 per cent for 2013.
Japan's finance minister ruled out immediate intervention in the yen despite its 2.2 per cent jump against the dollar on Thursday and continued strength on Friday. "We are carefully watching, but we don't have any immediate intention of taking any action, such as intervention," Taro Aso said. (Bloomberg) The US dollar had at one point on Thursday dipped 3 per cent against the yen, a sell-off attributed to investors reversing views on how long the Fed will maintain QE3. (Financial Times)
Apple, Google, Facebook, Microsoft and Yahoo denied all knowledge of secret US government efforts to tap their central servers for users' data. The National Security Agency programme, codenamed PRISM, boasted of collection "directly from the servers of these U.S. Service Providers: Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube, Apple," according to documents leaked to the media. (Washington Post, Guardian.) PRISM was created in 2007 to replace domestic surveillance policies of the Bush administration, and has provided data used in one in every seven daily intelligence briefings submitted to the President. (Bloomberg, Financial Times)
The NSA has also logged phone-call data from the US networks of AT&T and Sprint, in addition to Verizon. The recent leak of a secret US court order to Verizon for millions of records revealed the extent of the surveillance, which has also been extended further to data on credit-card transactions. (Wall Street Journal)
Prosecutors in the US and UK are close to bringing criminal charges over the Libor scandal. Former Barclays employees are likely to be charged later this summer. Barclays itself settled with regulators a year ago over allegations it attempted to manipulate Libor, but it has taken time since then for the authorities on both sides of the Atlantic to coordinate their cases against individuals. (Wall Street Journal)
S&P blamed "ambiguous policy signals" for putting a negative outlook on Brazil's credit rating. The agency also pointed to a third year of "modest" economic growth as a reason for the cloud over its long-term BBB and short-term A2 grading of the country. (Financial Times)
Apple will start offering trade-in for iPhones next month. Brightstar will run the exchange programme for Apple, which is trying to get more consumers to upgrade to iPhone 5s to combat the decline in its sales growth. (Bloomberg)
Dalian Wanda is close to snapping up Sunseeker for £300m. "We bought the best yacht company in the UK," said Wang Jianlin, chairman and founder of the Beijing-based property group. Sunseeker's yachts -- built in Poole, Dorset -- would add another top brand to the armoury of western luxury assets being compiled by Chinese companies. (Financial Times)
COMMENT AND CURIOS
- Fixing banks is the real priority for Britain, says Martin Wolf. (Financial Times)
- It should be the eurozone's too, Stephen Fidler argues. (Wall Street Journal)
- And Australia's fastest-growing mortgage lender is... (Bloomberg)
- Why a US-China grand bargain is needed to stop the IMF becoming irrelevant. (Financial Times)
- If this is Turkey's 1968, where's its De Gaulle? (Financial Times)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -256.42 (-1.99%) at 12,647
Topix down -22.23 (-2.08%) at 1,048
Hang Seng down -288.74 (-1.32%) at 21,549
US markets
S&P 500 up +13.66 (+0.85%) at 1,622
DJIA up +80.03 (+0.53%) at 15,040
Nasdaq up +22.57 (+0.66%) at 3,424
European markets
Eurofirst 300 down -14.18 (-1.19%) at 1,178
FTSE100 down -83.20 (-1.30%) at 6,336
CAC 40 down -38.16 (-0.99%) at 3,814
Dax down -97.37 (-1.19%) at 8,098
Currencies
€/$ 1.32 (1.30)
$/¥ 96.38 (99.16)
£/$ 1.559 (1.53)
Commodities ($)
Brent Crude (ICE) up 0.16 at 103.77
Light Crude (Nymex) up 0.08 at 94.84
100 Oz Gold (Comex) down 3.10 at 1,412
Copper (Comex) unchanged at 3.31
10-year government bond yields (%)
US 2.07%
UK 2.02%
Germany 1.52%
CDS (closing levels)
Markit iTraxx SovX Western Europe at 84.67bp
Markit iTraxx Europe +4.8bps at 112.4bp
Markit iTraxx Xover +24.6ps at 468.6bp
Markit CDX IG -1.8bps at 83.6bp
Sources: FT, Bloomberg, Markit
