BOJ Rate Hike Expected to Boost Yen, Impact USD/JPY and Nikkei 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Indian Government Bonds Seen Opening Steady Ahead of RBI Policy Decision 
South Korea Signals Possible Interest Rate Hike as Inflation Remains Elevated 
RBNZ Holds Interest Rates Steady but Signals More Hikes Ahead in 2026 
Indonesia Plans Higher Asset Yields to Boost Rupiah and Restore Investor Confidence 
BOJ Raises Interest Rates to 1% as Inflation Pressures Persist 
China’s loans shrank significantly in April, compared to that in March on an unsuccessful program adopted by the government to swap local government debt for cheaper municipal bonds. No less than RMB 350 billion of such bonds were issued last month, according to the People’s Bank of China.
However, local government bond issuances are neither included in loans nor total social financing (TSF). Therefore, these two measures do not fully reflect China’s credit buildup. China’s total debt was 247 pct of GDP in 2015, up from 164 pct in 2008.
According to estimates, if municipal bond sales were included, (newly increased) TSF would have jumped 17 pct y/y in April, compared to the official TSF reading, which fell 29 pct, DBS reported.
"It is expected that such patterns would recur for the remainder of the year as the government expands its debt swap program," DBS commented in a research note.
Meanwhile, Finance Minister Lou, Jiwei believes that around RMB 5 trillion of high-cost local government borrowings will mature in 2016 and need to be refinanced through these swaps.
