• There is no pressing need for the Bank of Japan to alter its yield control settings as it has room left for manoeuvre before the 10-year bond yield hits its ceiling, a central bank board member said on Thursday, brushing aside market speculation.
• Pursuing a reflationary strategy to boost growth and break free of decades of debilitating deflation, the BOJ operates a yield curve control (YCC) policy, with a -0.1% target for short-term interest rates and 0% for the 10-year bond yield.
• In July, the central bank tweaked those settings by allowing the 10-year yield cap to move flexibly within upper/lower limits of 1% but, with inflation exceeding its target for more than a year, market speculation is rife that the BOJ could make further adjustments to its tolerance band.
• Asahi Noguchi, a BOJ board member known for his reflationary stance, poured cold water over such speculation, in comments at a news conference in Niigata, north of Tokyo, where he had delivered a speech to business leaders. Policymakers must focus on improving wage growth to pave the way for sustainable inflation before tweaking easing policy, he said.
• "We still need to guide policy with mainly downside risks in mind," Noguchi said, citing for example that the Chinese economy may face the risks of deflation and low growth that Japan has suffered for decades. "There's still a distance to achieve sustainable inflation," Noguchi said.
• Japan's wage trends, which have been largely flat over the past three decades since the asset bubble burst, are closely watched by global financial markets as the BOJ has emphasised that sustainable pay hikes are a prerequisite for dismantling its massive monetary stimulus.

(Source: Reuters)

• FosRich is expanding its reach by offering solar equipment and transformer repairs in Guyana.
• Speaking at the JSE Guyana Capital Markets Conference hosted by the Jamaica Stock Exchange last week, Managing Director Cecil Foster said FosRich will be interfacing with the Government to build solar farms.
• FosRich Company Limited went public as a trader in electrical lighting products six years ago but has since diversified into PVC pipe manufacturing, solar equipment distribution, as well as transformer repairs and manufacturing through its subsidiary Blue Emerald.
• In the transformer repair market, its main client is the power utility company Jamaica Public Service (JPS)
• Speaking of the market opportunity, Mr. Foster highlighted that the Caribbean has another 60,000 transformers awaiting repair.  He further highlighted that in Guyana, there are seven light and power companies, which also need the service.
• The move to Guyana is part of the company’s strategy of expanding into other territories which will drive revenues and ultimately increase shareholders’ value.

(Source: RJR News)

• GraceKennedy has unveiled its inaugural Environmental, Social, and Governance, ESG report, marking a significant step forward in its sustainability journey.
• The report outlines the company's longstanding commitment to responsible business practices and offers a first glimpse into the ESG goals and targets that will steer GK towards achieving its 2030 vision. The company’s 2030 strategic objectives are to earn 70% of its revenues and profits outside of Jamaica; list on an international stock exchange; grow its food business in major markets across the USA, Canada, and the UK; and expand the footprint of its financial services business in the Caribbean.
• The report provides a detailed account of GK's ESG journey, outlining the process through which the Company established its ESG goals.
• The report highlighted that ESG is not just about doing the right thing, it also helps identify opportunities which will make the business more robust and sustainable for the future.

(Source: GraceKennedy)

• Barbados is hoping to execute a "debt-for-climate" swap early next year to secure savings of around $300 million over 15 years to fund clean water supplies, the island state's finance minister, Ryan Straughn, told Reuters on Tuesday, October 10.
• The government is working with the Inter-American Development Bank and the European Investment Bank on credit guarantees, Straughn said in an interview on the sidelines of the International Monetary Fund and World Bank Annual Meetings in Marrakech, Morocco.
• At their simplest, debt-for-nature swaps see a country's debt bought up by a bank or specialist investor and replaced with cheaper loans, usually with a development finance "credit guarantee" or "risk insurance" helping bring the cost down. The savings are meant to fund conservation - or a climate-related purpose, in Barbados' latest planned deal.
• The savings from the island's mooted "debt-for-climate" swap will be used to upgrade a water treatment plant to help better manage water resources and improve food security, Straughn said.
• Notably, in September 2022, Barbados carried out a "debt-for-nature" swap, which saw $150 million of international bonds swapped for cheaper debt, generating $50 million for marine conservation.
• Barbados's previous debt-for-nature swap funnelled money towards protecting and rehabilitating the surrounding Caribbean Sea. A debt-for-climate swap would be an almost completely new concept, though, and one that other climate change-vulnerable countries are likely to want to explore.
• For Barbados, images of crystal clear waters lapping palm-fringed beaches are crucial for the key tourism sector, which accounts for over 40% of the nation's GDP and roughly 40% of jobs.

(Source: Reuters)

• Daily ship crossings on the Panama Canal, one of the world's main maritime trade routes, will be reduced to 31 from 32 to soften the impact of a severe drought that is expected to last until next year, the authorities managing the canal said.
• The Panama Canal Authority (ACP) in recent months has imposed various passage restrictions to conserve water, including cutting vessel draft and daily passage authorizations, which are normally 36 per day.
• ACP said that due to the ongoing water crisis, it "finds it necessary to implement additional changes," with the new rules implemented from November 1. The daily crossings will see nine ships pass through the Neopanamax lock and 22 through the Panamax lock, the ACP said, while transit reservation quotas will be adjusted to a maximum of 30 per day.
• To avoid delays and ship backlogs, the ACP will also offer a new schedule for the Neopanamax locks and the Panamax locks, part of efforts to allow customers to adjust their itineraries and reduce waiting times for vessels that do not have a daily transit schedule.
• Experts have warned of possible disruptions to maritime trade in the face of what is shaping up to be an even drier period next year. They argue that a possible early start to Panama's dry season and above-average temperatures could increase evaporation and lead to near-record-low water levels in April.
• The restrictions have generated long queues of waiting vessels, although the canal administration said that levels were normal. The effects have led the canal to estimate a reduction in revenues of up to $200 million by 2024.

(Source: Reuters)

• The U.S. Producer Price Index (PPI) for wholesale prices rose more than expected in September, indicating inflation pressures. PPI for finished goods increased by 0.5%, exceeding the estimated 0.3% rise.
• Core PPI (excluding food and energy) increased by 0.3%, surpassing the forecasted 0.2%. Inflation was driven by a 0.9% surge in final demand for goods, notably gasoline prices up by 5.4% and food prices by 0.9%.
• On a year-over-year basis, the headline PPI increased by 2.2%, the largest move since April. This data raises concerns about persistent inflation and potential impacts on interest rates. Federal Reserve closely monitors PPI data for policy decisions, aiming for 2% annual inflation.

(Source: CNBC)

• Federal Reserve officials differed on the need for additional interest rate hikes during their September meeting.
• The majority agreed on the necessity of keeping rates elevated until convinced that inflation is heading back to the target of 2%. A summary of the meeting indicated that most participants judged one more rate increase would likely be appropriate, while some believed no further increases would be warranted.
• The meeting did not result in a rate hike, but about two-thirds of the committee indicated the possibility of one more increase before the year's end. Some officials noted the need to proceed carefully based on incoming data and maintain a restrictive policy until confident about sustainable inflation reduction.
• Markets showed mixed reactions after the minutes' release, and expectations for additional rate hikes were scaled back based on fed funds futures market data. Concerns about inflation, upside risks to prices, resilient consumer spending, and potential financial pressures on households were discussed during the meeting.
• Inflation data, including the producer price index, indicated progress toward the Fed's 2% target, but some concerns remain regarding the inflation outlook.

(Source: CNBC)

• Spatial Artificial Intelligence (AI) technology is poised to revolutionise training in Jamaica’s tourism industry through virtual and augmented reality platforms for enhancing the education and professional development of staff and stakeholders in the sector.
• Tourism Minister, Hon. Edmund Bartlett, endorsed the transformative potential of the technology while addressing the launch of the EON Reality and Sandals Corporate University (SCU) training and development partnership at Sandals Royal Plantation in Ocho Rios, St. Ann, on Thursday (October 5).
• The collaboration promises to impact Jamaica and the Caribbean on a wide scale, with the potential to target over 10,000 employees for upskilling according to the Minister.
• Additionally, the interactive and immersive approach contributes to securing the future of tourism by equipping the workforce with the skills and knowledge needed to excel in an ever-evolving industry.
• Bartlett outlined that in the current era, characterised by rapid technological changes, endeavours such as the SCU and EON partnership will guarantee Jamaica’s sustained position in tourism as a global leader in education and training. The use of EON Reality’s innovative solutions across these diverse programmes demonstrates the versatility of the EON AI Assistant in facilitating learning and teaching across various subject areas.
• The engagement of AI is anticipated to redefine training and capacity building within the tourism industry. Further, it will improve the resilience of the industry, enable the industry to compete on a regional and international scale and mark the start of a transition into the new technological age for Jamaica’s tourism workers.

(Source: JIS News)

• Regional rating agency, Caribbean Information and Credit Rating Services Limited (CariCRIS) has upgraded VM Investment's overall creditworthiness. The regional scale local currency rating indicates that the level of creditworthiness of this obligor, adjudged concerning other obligors in the Caribbean is good. The national scale local currency rating indicates high creditworthiness compared to other obligors in Jamaica.
• The ratings have been upgraded to CariBBB (Regional Scale Local Currency); jmBBB+ (Jamaica National Scale Foreign Currency); and jmA- (Jamaica National Scale Local Currency). 
• CariCris says VM Investment's creditworthiness is 'Adequate,' and it maintains a 'Stable' outlook for the company.
• The rating agency noted several strengths to VMIL’s creditworthiness, which it described as ‘adequate,’ including expected benefits from its investment in Kingston Properties (KPREIT), improvement in the credit risk profile of VMIL’s parent company, VM Financial Group Limited (VMFG) and implied support therefrom and an improvement in Jamaica’s sovereign risk profile.
• The agency expects VMIL to remain profitable and adequately capitalized over the next 12 to 15 months.
• The agency cited VMIL’s growing presence in the Jamaica financial services sector supported by its parent, VMFG, continued profitability and maintenance of good capitalisation levels, underpinned by its growing tangible net worth.

• The rating upgrade signifies a lower credit risk for VMIL and greater reliability in meeting financial obligations. 

(Source: CariCRIS Ratings)

• The International Monetary Fund (IMF) raised its 2023 output growth estimate for Latin America and the Caribbean to 2.3% from July's 1.9% due to faster expected growth in Brazil and Mexico, the fund said in a report on Tuesday.
• The 2.3% estimate for 2023 follows the growth of 4.1% last year, with the slowdown due to a "normalization of growth along with the effect of tighter policies, a weaker external environment, and lower commodity prices."
• The upward revision to 2023 since July reflects stronger-than-expected growth in Brazil, revised upward by 1.0 percentage points to 3.1%, driven by buoyant agriculture and resilient services in the first half of 2023.
• Consumption has also remained strong, supported by fiscal stimulus. The upward revision for the region also reflects stronger-than-expected growth in Mexico, revised upward by 0.6 percentage points to 3.2%, with the delayed post-pandemic recovery taking hold in construction and services and spillovers from resilient US demand.
• The major regional economies expected to see a contraction this year are Argentina, with a -2.5% GDP growth estimate and Chile, with -0.5%. This could be due to Argentina facing steady depreciation of the peso, negative central bank reserves and an economy struggling due to the impact of drought on the agricultural sector. In the case of Chile, the world’s largest copper producer, the contraction likely represents the impact of operational issues that have hit copper mining and production in the country.
• Notably, for the Caribbean segment only, real GDP of 9.8% and 8.3% is forecasted for 2023 and 2024, respectively, down from 13.9% in 2022. Consumer prices are anticipated to stay elevated in 2023 (13.2%) relative to 2022 (12.6%); however, it is expected to moderate in 2024 (6.5%).

(Sources: IMF & Reuters)