Asia Pacific

Standard & Poor’s on Wednesday lowered Japan’s sovereign debt rating one notch, in the latest sign of concern about Japan’s economic prospects nearly three years after Prime Minister Shinzo Abe took power, The Wall Street Journal reported. S&P said it was lowering the rating to A-plus from AA-minus because weak economic growth makes it less likely that the government can quickly improve the nation’s fiscal health.

Asia’s “trade recession” appears to have worsened in August — with India, China, South Korea and Indonesia all posting sharp declines — as a vicious circle of weakening currencies and faltering demand hits exports across the region, analysts said. Asia, led by China, has long been the world’s most dynamic trading region. But exports this year have posted their worst performance since the 2008-09 financial crisis, falling 7.7 per cent in July to register a ninth consecutive month of year on year falls in US dollar terms, according to data compiled by Capital Economics, a research company.

The view that China is growing far slower than official figures show is increasingly going mainstream, with big global investors among those now basing decisions on a rate of about 5 per cent, the Financial Times reported. According to government statistics China’s economy grew at an annual pace of 7 per cent in the second quarter of this year, in line with Beijing’s target for the year and the World Bank estimate of 7.1 per cent.

The pressure on Turkey’s lira isn’t likely to ease any time soon, which could mean more pain for one of the most battered emerging-market currencies, the Wall Street Journal reported today. The lira sank to a record low against the dollar yesterday, pressured by domestic political uncertainty, escalating violence and the prospect of a lowered credit-rating outlook on top of the possibility of a U.S. interest-rate increase later this week. The uncertainty isn’t expected to let up before elections slated for November.

China National Erzhong Group Co. may miss an interest payment later this month after one of its creditors filed a restructuring request, putting it at risk of becoming the second state-owned company to default in the nation’s onshore bond market, Bloomberg News reported today. The smelting-equipment maker might not be able to pay a coupon that’s due Sept. 28 on its 1 billion yuan ($157 million) of 5.65 percent 2017 notes if a local court accepts the creditor’s restructuring application before that date, according to a statement posted on Chinamoney.com.cn.

Benjamin Wey was arrested by the FBI at his Manhattan home on Thursday and charged him with securities fraud, wire fraud, conspiracy and money laundering in an eight-count indictment unsealed in a federal court in Manhattan, the New York Times reported on Friday.

China's yuan shot higher in offshore markets on Thursday on suspected rare intervention by Chinese state banks that was seen as a bold gesture by authorities to shake out speculators betting against the currency. The intervention caught the market wrong-footed and catapulted the yuan more than 1 percent higher, putting the offshore rate on track for its biggest daily gain on record. Investors have been positioning for yuan depreciation since a shock devaluation of the currency in August, which sparked fears the economy was slowing down more than expected.

The wave of defaults and debt restructuring hurting oil bonds around the world looks set to reach China, Bloomberg News reported. Notes of oil services firms are the nation’s worst performers this quarter with a 5.9 percent slide amid record industry debt and slumping crude prices, according to a Bank of America Merrill Lynch index of foreign-currency notes. Explorers have lost 1.4 percent. Some private-sector companies have dropped to distressed levels with the 2019 notes of Honghua Group Ltd. at 38.8 cents on the dollar and Anton Oilfield Services Group’s 2018 paper at 43.8 cents.

Industrial Bank Co. and Huaxia Bank Co. asked Baoding Tianwei Group Co., a Chinese maker of power transformers, to repay two bonds early after it became the first state-owned enterprise to default on onshore debt in April, Bloomberg News reported. Industrial Bank is seeking 793 million yuan ($125 million) in principal and interest while Huaxia Bank has asked for 248 million yuan, according to Baoding Tianwei’s statement on the Chinamoney website Monday. The lenders sent requests for the notes due in December and March to the China International Economic & Trade Arbitration Commission.

Tough medicine for China's ailing stock markets has brought stability to prices, at least for now, but it has come at a cost; equities and futures are trading so thinly that they are in danger of flat lining, Reuters reported. Intraday volumes on key onshore equity markets fell and stock futures turnover all but evaporated this week, after exchanges proposed a "circuit breaker" to limit index swings and China altered dividend taxes to favour long term investors.