Japanese inflation picked up for 14th consecutive month in November, rising 0.9% from a year ago. This came with the unemployment rate of 2.7% - the lowest since 1993.

Although rising energy price fuelled most of the inflation gain whereas wage remained subdued, the tightest job market in more than two decades is likely to exert upward pressure to pay and subsequently increase household’s purchasing power.

As the inflation rate remains far below the central bank’s long-term target of 2%, Bank of Japan is likely to keep accommodative monetary policy in order to drive price level and growth.

Asian equity markets are little moved at open as Australia, Hong Kong and other western markets are closed for Christmas holiday. In Singapore, the breaking news over Keppel Corps’ Brazil bribery fine is weighing on the entire oil & gas sector today. Keppel Corp will make a provision of S$567 million penalty in the current financial year and will treat it as a ‘one-off’ item. This is likely to bring down the company’s net asset value by around S$0.30. Short-term pain but in the long term, this will help to clarify the company’s future outlook and allow investors to re-focus on its restructuring effort and improvement in the business environment.

Precious metal prices continued to climb up as the tumbling of cryptocurrencies over the weekend fuelled demand for safety. Separately, North Korea’s rejection of UN sanction and hard stands on its nuclear power also led to escalation of geopolitical uncertainty.

Technically, both gold and silver prices have entered into short-term bull trend. Their 10-Day SMA and SuperTrend (10.2) have both flipped upwards, indicating the bull side is dominating.

Market Calendar – Japan Core CPI

Silver – Mar 2018

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