Halister News

(Bloomberg) -- The central bank’s intelligence unit was asked by financial institutions to review suspicious transactions totaling EU88b for possible money laundering or other crimes, Bank of Italy Governor Ignazio Visco says in speech in Rome.

• Prosecutors examined about 84,000 transactions out of over 100,000 reviewed and submitted by the central bank’s unit
• About 60,000 required the opening of formal investigation, with 7,000 eventually prompting criminal proceeding

--WILL KENNEDY

(Bloomberg) -- Japanese government bond yields may face upward pressure if public support for PM Abe’s administration erodes further after his party’s heavy loss at the Tokyo assembly election, according to Deutsche Securities Inc.

• Much of the continued stability of JPY rates and strength in Japanese equities are owed to Abe’s support for aggressive BOJ easing and his strong grip on power, Makoto Yamashita, chief strategist at Deutsche Securities in Tokyo writes in a commentary
  • This suggests both domestic bonds and stocks are likely to be negatively impacted by the Tokyo election outcome
• Attention will be on whether Abe’s cabinet can keep its approval rating above the 40% threshold considered necessary to keep a steady grip on power
• Further decline in support for Abe could trigger a yen uptrend and could affect the prime minister’s appointment of BOJ officials
  • Consensus of JGB market participants before Sunday’s election was that Abe himself would appoint people who are willing to continue with the current monetary easing regime
  • BOJ Governor Haruhiko Kuroda and his two deputies are due to leave office in March-April next year
• LDP’s defeat at the Tokyo assembly election should not be too devastating for Abe initially, though it’s probably more severe than the market had expected
  • Abe will not face a party leadership race until Sept. 2018, while next lower house election doesn’t need to be held before Dec. 2018

To contact the reporter on this story: Chikafumi Hodo in Tokyo at chodo@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui