The Japanese yen is challenging its three-month low at the 114.0 area after PM Abe’s sweeping victory in an election held over the weekend. 

The market believes that this will strengthen Abe’s leadership in the government and pave the way for continued ‘Abenomics’ stimulus measures. It’s also increasingly likely that the current BOJ Governor Kuroda’s term will be extended, creating a more accommodative monetary policy outlook. All of which suggests a weaker yen.

The weaker currency sent Japanese stocks to their highest level in over a decade, with the Nikkei 225 up 0.8% to 21,631 points this morning. Favourable sentiment is spreading over to the rest of Asia, with the Singapore market climbing nearly 0.5% to its three-month high of 3,355 points.  
In Singapore, the earnings season has proven encouraging so far. Four STI component companies have announced their Q3 earnings, with all of them meeting or exceeding expectations. Improvements in the macro-economic environment over the last four quarters have gradually translated to favourable corporate earnings, and this is the fundamental driver of a bull run. 

Singapore Q3 earnings update:

Keppel Corp:

  • Q3 net profit rose 30% year on year to S$292m; 9m net profit up 11% year on year to S$712m.
  • Q3 EPS S$0.16, beating Bloomberg’s consensus forecast of S$0.105
  • Strong performance in the property and investment segments helped to underpin weakness in the offshore and marine businesses
  • Property, investment and infrastructure contributed 56%, 30% and 14% to Group net profit respectively 
  • The Group CEO outlined a multi-business strategy and a move towards integrated urbanisation-solution businesses. 

CapitaLand Commercial Trust:

  • Q3 Distribution per Unit (DPU)  up 6.9% year on year to 2.02 cents, largely due to strong performance from CapitaGreen
  • Annualised distribution yield was 5.3%
  • Portfolio committed occupancy rate remains strong at 98.5%
  • Leverage remains healthy at 33.9%

CapitaLand Mall Trust:

  • Q3 net property income up 1.6% year on year to $121.4m
  • Distribution income is marginally higher at 98.7m
  • Q3 distribution per unit remains stable at 2.78 cents
  • Annualised distribution yield was 5.41%

Technical Analysis:

USD/JPY

  • 10-Day Simple Moving Average and SuperTrend both sloped upwards
  • Facing some resistance at the 114.4 area, which was the previous high
  • Momentum indicator RSI is moving toward the overbought zone of above 70%, suggesting that upward momentum is strong in the short term, but there is risk of overrun



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