Prime Minister of Japan, Sinzo Abe, officially resigned from his office for the health reason - Photo by Prime Minister Office

JAKARTA (TheInsiderStories) – Good Morning! Prime Minister of Japan, Sinzo Abe, officially resigned from his office for the health reason. The LDP party will announce who will become prime minister and will serve the remainder of Abe’ term as LDP chairman, which ends in September 2021, on Sept. 15.

Yoshihide Suga, is predicted to be a strong candidate for the Japanese prime minister. Then, former defense minister Shigeru Ishiba, former foreign minister Fumio Kishida, defense minister Taro Kono, foreign minister Toshimitsu Motegi, and environment minister Shinjiro Koizumi.

A comprehensive view of global economic conditions midway through the third quarter will be provided by the worldwide purchasing managers index (PMI) surveys. The week closing with the all-important United States (US) non-farm payroll report.

Other key releases include GDP for India, Brazil, Australia and South Korea, policy action comes from Australia and inflation data from Indonesia. Global PMI data will be eagerly awaited to assess whether the economic rebound from COVID-19 lockdowns has persisted into August.

Flash PMI data brought mixed news, although the Group-4 largest developed economies collectively saw the sharpest expansion since March 2019, only the US and Britain reported faster growth. The Eurozone’ expansion lost pace and Japan remained firmly stuck in contraction.

The final PMI numbers will provide more detail on manufacturing and services conditions in all major developed and emerging markets. Detailed sector will also add insight into winners and losers in July saw auto makers lead the global upturn but conditions remained especially tough for tourism and recreation.

Friday’ US employment report includes nonfarm payrolls, unemployment and wage growth. July saw 1.8 million added to the payroll count, but that still left the count almost 13 million below the pre-pandemic peak and was down from a 4.2 million increase in June, hinting at a slowing recovery.

The unemployment rate fell 0.9 percent points to 10.2 percent. Analysts are expecting around 1.5 million jobs in August to be added and a drop in the jobless rate to just under 10 percent.

In Europe, the PMI data are joined by Eurozone inflation and unemployment numbers, plus retail sales data. German factory orders and retail sales are also updated, as are mortgage lending and credit data in the United Kingdom.

In Indonesia, the statistics bureau will publish the latest inflation data for the month of August. While, President Joko Widodo has signed a Government Regulation Number 47 of 2020 concerning the exemption of value added tax and sales tax on luxury goods to foreign parties.

This rule allows representatives of foreign countries and international agencies and their officials to get free value added tax and luxury goods under the agreement.  On Friday, Indonesian Rupiah closed up 0.19 percent to 14,632 per US dollar and the Jakarta Composite Index (JCI) depreciated 0.46 percent to 5,346 levels compared to the previous day.

Analysts assess that the plan to extend the large-scale social restrictions transition period in Jakarta for two weeks will be a negative catalyst for the financial market. On the other hand, the decision of the resignation of Abe could be another momentum for both instruments to strengthen.

The reason is, the decision has made the Japanese Yen strengthened significantly against the US Dollar. The successor of former leader may change the economic policy and stimulus of Abenomics that have been carried out by Japan.

This week the local currency its expecting move in the ragging 14,620  – 14,700 against the Greenback. While the stock index between 5,102 – 5,378.

Stocks to be watch for this week are PT Bank Mandiri Tbk (IDX: BMRI), PT Bank Central Asia Tbk (IDX: BBCA), PT Bank Tabungan Negara Tbk (IDX: BBTN), PT Perusahaan Gas Negara Tbk (IDX: PGAS), PT Astra Agro Lestari Tbk (IDX: AALI), PT Astra International Tbk (IDX: ASII), PT London Sumatera Plantation Tbk (IDX: LSIP), and PT Aneka Tambang Tbk (IDX: ANTM).

-IHS Markit contributed to this briefing

May you have a profitable Week!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia