BOJ governor Haruhiko Kuroda, speaking at a briefing after the bank' s Policy Board decided to leave its monetary policy unchanged, noted that geopolitical risks " have been heightening somewhat" , and said that the BOJ would monitor the market' s movements, though " at this stage, (these risks) have not led us to alter our forecasts in a major way" .

The Nikkei 225 stock average plunged 454 points to 14,778.37, largely in reaction to news that US President Barack Obama had authorised targeted air strikes against Islamic militants in Iraq, even as the US military began an operation to get relief aid to Iraqis under threat by the militants.

 

In disclosing the year-on-year growth figure for January-June in his National Day Message last night, Prime Minister Lee Hsien Loong also indicated that the official full-year growth forecast has been narrowed from 2-4 per cent to 2.5-3.5 per cent.

This means that economic growth in the remaining July-December months is not expected to exceed 3.5 per cent. And growth for the full year will be below last year' s 4.1 per cent.

In his National Day Message last year, Mr Lee also announced a revision of the full-year growth forecast for 2013, from 1-3 per cent to 2.5-3.5 per cent. In any case, private-sector economists have come to expect Mr Lee to give an update of these economic numbers in his National Day Message. This year, they tipped him to narrow the range of the growth forecast.

The economists, who had projected full-year growth at around 3.8 per cent in 2014, saw the move coming after GDP growth tumbled by over half to 2.1 per cent in the second quarter, down from 4.7 per cent in the first quarter.

CIMB' s Song Seng Wun, UOB' s Francis Tan and Mizuho' s Vishnu Varathan expect growth contraints to remain in the months ahead. These include domestic headwinds from restructuring and credit pressures as well as geopolitical risks of the warfare and disease kinds.

Mr Song, who had correctly predicted that the full-year growth forecast would narrow to 2.5-3.5 per cent, pointed out yesterday that it' s clear by now the European and American economies are not picking up as fast as expected.

The trade-dependent tech sector, which accounts for a third of manufacturing output, will continue to be a drag on the Singapore economy, he said. And the recent drop in Chinese tourists will only spell more bad news for the domestic services sector, which is already soft.

Weaker growth in the United States, China and several key emerging economies has already led the International Monetary Fund last month to trim its 2014 global growth forecast to 3.4 per cent from 3.7 per cent. Still, 2.5-3.5 per cent growth is not bad - and the growth is needed to produce good jobs and fulfilling careers, according to Mr Lee in his National Day Message to Singaporeans. " We must keep up this growth over the next decade to help you improve your lives."

In his message, Mr Lee also said that the government was studying how to make it more convenient for retirees to get cash out of their flats, " in a prudent and sustainable way" . He said that he would speak about how to improve the Central Provident Fund at the National Day Rally next week, in particular, on how to make the CPF better in helping Singaporeans to save for old age.

The anxieties of the old and the aspirations of the young - these are two concerns that took up much of Mr Lee' s National Day Message last night. And he pointed out the many efforts that the government is making to assist them.

In helping young Singaporeans to realise their potential, Mr Lee said that it was not just a matter of continuing education and training. " It' s also a matter of social values."

Singaporeans should not judge a person by his paper qualifications, but also by his skills, contributions and character. " This is how we keep Singapore a land of hope and opportunity for all," he said. " We are now at a higher level, from which we can scale new heights. Hence, we must reassess our position, review our direction and refresh our strategies."

 

[NEW YORK] Wall Street stocks pushed higher Friday despite US air strikes in Iraq as investors ramped up buying in a market that some analysts said had been oversold.

The Dow Jones Industrial Average jumped 185.66 points (1.13 per cent) to 16,553.93.

The broad-based S& P 500 gained 22.02 (1.15 per cent) to 1,931.59, while the tech-rich Nasdaq Composite Index bolted 35.93 (0.83 per cent) higher to 4,370.90.

" Today is a bounce," said Tom Cahill, a portfolio strategist at Ventura Wealth Management. " It was just so oversold in the short-term, it makes a lot of sense it would bounce."

 

[TOKYO] Asian shares tumbled on Friday as investors sought out safe-haven assets on growing fears that conflicts in Ukraine and the Middle East could sap global growth, extending losses after US President Obama said he had authorised air strikes in Iraq.

Obama said in an address that he authorized targeted strikes to protect the besieged Yazidi minority and US personnel in Iraq, after the Iraqi government requested help.

" We can act carefully and responsibly to prevent a potential act of genocide," Obama told reporters at the White House. " I' ve therefore authorised targeted air strikes if necessary." UN Secretary-General Ban Ki-moon and the United Nations Security Council on Thursday called for the international community to help Iraq' s government and people as the country struggles against a sweeping advance by Islamist militants.

MSCI' s broadest index of Asia-Pacific shares outside Japan dropped about 0.9 per cent, on track for a weekly loss over 1 per cent, while Japan' s Nikkei stock average was down about 2.7 per cent.

 

PRESSURE on the Jardine group and DBS yesterday pulled the Straits Times Index (STI) down by 6.01 points to 3,314.22 in a weak session for the region yesterday. Wall Street managed to end higher on Wednesday but only just, and only after it had threatened to close in the red for the ninth time in 11 sessions.

Not surprisingly, given the wobbly showing, there were worries that selling could resume soon, worries that spilled over to regional markets including Singapore and dampened sentiment. Turnover amounted to 1.9 billion units worth S$1.15 billion, about average by recent standards but low if a longer time frame is used. Excluding warrants, there were 180 rises versus 262 falls.

Within the STI, losses in Jardine Cycle & Carriage, Jardine Matheson and Jardine Strategic took 4.5 points off the index. A 23-cent fall in DBS to S$18.14 accounted for a further loss of 4.7 points.

Credit Suisse (CS) in its Aug 6 Singapore Bank Sector report said that in the reversal from the previous quarter' s (Q1 2014) very strong results, most earnings drivers this time were in line or below expectations in Q2 2014. " Looking forward to 2H, earnings risks are on the downside, driven by further margin compression (UOB/OCBC), and a slowdown in non-interest income (partly seasonal) (DBS/OCBC) ... Given its cheaper valuation, DBS remains our top pick, we also increase our target price to S$20.00 (from S$19.30)."

 

WALL Street' s fourth loss in five trading sessions on Tuesday - and its eighth in 10 - was said to be responsible for yesterday' s 7.44-point fall in the Straits Times Index (STI) to 3,320.23, but equally likely was that the funds which had window-dressed the index at the end of July were simply cashing out.

Turnover remained in the doldrums as it has been for at least six months now, yesterday amounting to 1.45 billion units worth S$1.02 billion. Excluding warrants, there were only 136 rises versus 314 falls.

Yesterday' s fall in the STI means that Tuesday' s 9.27-point bounce was almost all wiped out. The index had shot up in the final days of July, with many attributing this to month- end padding by funds.

News reports attributed the pressure on US stocks partly to rising geopolitical risk - in particular because of the deteriorating situation in Ukraine and the Gaza strip - and partly to disappointing earnings recently reported by US firms.