UPDATE 1-Fitch downgrades Vietnam to B-plus on fiscal concerns

July 30, 2010 By Leave a Comment

HANOI, July 29 (Reuters) – Fitch Ratings downgraded Vietnam’s sovereign rating by a notch to B-plus on Thursday, citing inconsistent state policies, worsening external finances, higher funding needs, its dollarised economy and weak banks.

Economists said downgrades could follow from other ratings agencies on one of Asia’s most promising emerging markets, where the move which was widely expected.

Vietnam’s sovereign dollar bonds due in 2020 VN048365868= fell a point to 109.50 cents on the dollar. Its credit default swaps (CDS) were not traded, traders said. [ID:nTOE66S04B]. There was no immediate reaction in the local currency market.

Vietnam’s external finance position had yet to stabilise despite additional foreign exchange reserves, Fitch sovereign analyst Ai Ling Ngiam said. Vietnam was also suffering from a highly dollarised economy and a weak banking system, Ngiam added.

“Vietnam’s track record of stop-go policy tightening and easing has been ad-hoc, reactive and inconsistent,” Ngiam said.

Fitch’s last downgrade of Vietnam was on June 29, 2009, when it knocked the country’s local currency rating to BB- from BB.

The new rating is now four notches below investment grade. It also puts Vietnam three steps below Indonesia and two under the Philippines, countries seen as its investment peers in Southeast Asia.

Fitch expects Vietnam’s government deficit to remain high and added the country’s public debt situation, a traditional area of strength, had also deteriorated.

Matt Hildebrandt, an economist at JP Morgan in Singapore, said the rating came at a time of some improvement for Vietnam in terms of inflation, the budget deficit and foreign exchange reserves, but said the downgrade was justified.

“I think the issue is even if things are getting better do you fundamentally think it should be rated where it is, and I think the answer they came up with was: no. I think the downgrade is warranted,” he said.

Vietnam’s sovereign five-year credit default swaps VNGV5YUSAC=R have signalled that the market considered Vietnam significantly risker than Indonesia or the Philippines, and on Thursday Vietnam’s CDSs were quoted about 60-70 basis points higher than those of the other two.

Rival agencies Moody’s and Standard & Poor’s both have a negative outlook on Vietnam’s rating.

Moody’s has rated Vietnam Ba3, while S&P has a BB rating on the Southeast Asian country, three and two notches below investment grade respectively. (Additional reporting by Umesh Desai in Hong Kong; Editing by Jason Szep)

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FACTBOX-Ratings agencies’ warnings on Japan’s growing debt

July 14, 2010 By Leave a Comment

(Reuters) – Japan faces political gridlock after the ruling party’s poor showing in an election on Sunday, which could thwart efforts to curb a huge public debt and get the economy in shape, as well as putting Prime Minister Naoto Kan’s job at risk. [ID:nTOE66A01V]

Standard & Poor’s rates Japan’s long-term local and foreign currency debt AA, both with a negative outlook.

Moody’s Investors Service rates its foreign currency and local debt at Aa2, with a stable outlook for both.

Fitch Ratings has the long-term foreign and local currency issuer default ratings at AA and AA-minus, respectively. The outlook on both ratings is stable.

At 883 trillion yen ($9,960 billion) as of the end of the fiscal year that ended in March, Japan’s public debt pile is nearly twice the size of its economy — the largest debt-to-GDP ratio in the industrialised world.

The following are comments by the agencies since mid-2009:

July 13, 2010 – Fitch Ratings says the ruling party’s poor showing at Sunday’s elections will make it more difficult for the country to push through fiscal consolidation and a delay in a credible plan beyond the year-end would increase the risk of a rating downgrade. [ID:nTOE66C043]

July 12, 2010 – Standard & Poor’s says it may lower Japan’s sovereign ratings if the government’s fiscal position erodes further or there is a lack of concrete measures aimed at fiscal consolidation.

It said in a statement that stabilising the political environment is a key challenge for Japan to implement meaningful and sustainable fiscal consolidation. [ID:nTOE66B066]

March 30, 2010 – Fitch says it needs to see a sustained downtrend in debt ratios before considering positive rating action. [ID:nTKW006875]

Feb. 25, 2010: Moody’s says Japan’s sovereign debt rating could come under pressure if the economy performs poorly and the government fails to draw up convincing fiscal plans. [ID:nTKF106864]

Feb. 22, 2010: Standard and Poor’s says Japan is unlikely to suffer a credit rating downgrade this year, although it cannot be ruled out.

It warns that a premature rise in the consumption tax aimed at shoring up Japan’s finances could hurt the economy, undermining budget consolidation efforts. [ID:nTOE61L03K]

Jan. 26, 2010: Standard and Poor’s cuts the outlook for government debt to negative from stable, citing reduced wiggle room on fiscal policy and voicing disappointment with the government’s budget consolidation plans.

A weak economic performance and lack of policy initiatives that could lift medium-term growth could bring about a cut in Japan’s ratings by a one notch, it says, adding that such an action could occur in the next two years.

On the other hand, policies that would help get government debt back under control would allow the ratings to remain at current levels. [ID:nSGE60P08I]

Jan. 13, 2010: Moody’s says fiscal policy has become more uncertain following a change in the finance minister to Naoto Kan from Hirohisa Fujii the previous week.

It says the outlook on Japan’s Aa2 rating depends on whether the government can achieve stronger economic growth and a return to a gradual course of deficit reduction and debt containment in the medium term. [ID:nTOE60609M]

Jan. 5, 2009: Fitch says Japan’s fiscal burden is expected to increase over the coming years but risks to its credit ratings are being offset by a strong external balance sheet. [ID:nTOE604087]

Dec. 30, 2009: Moody’s says the direction of Japan’s rating largely depends on the government’s efforts to consolidate its finances in the medium term and cut its deficit, warning that “at some point” investors will demand a risk premium to fund such large gaps.

It says that while the expansionary fiscal policy in 2010 was not surprising given entrenched deflation, the bigger concern was about government finances after 2010 than about growth prospects. [ID:nTOE5BT043]

Nov 10, 2009: Fitch warns it would review its AA- rating on government bonds if there were a material increase in debt issuance above the current 44 trillion yen in the fiscal year starting in April 2010. [ID:nT286946]

Sept. 3, 2009: Fitch maintains Japan’s long-term foreign and local currency issuer default ratings at AA and AA minus, respectively, saying its deteriorating public finances were offset by an exceptionally strong external balance sheet.

The outlook on both ratings is stable. [ID:nT240632]

July 1, 2009: Standard & Poor’s affirms its AA rating on long-term local and foreign currency debt, saying the world’s second-largest economy could withstand rising fiscal pressure from government stimulus policies.

S&P said the ratings were supported by the strong net external asset position but that Japan was suffering from a political stalemate that could harm fiscal consolidation and structural reforms. [ID:nT153618]

May 18, 2009: Moody’s cuts Japan’s foreign currency rating by two notches to Aa2 from AAA but raises the local debt rating to Aa2 from Aa3, saying the domestic market was able to absorb new borrowing from the government.

The agency describes the upgrade on the local rating as a largely technical one but also says Japan is in a worse situation than many other governments in its top ratings bracket. [ID:nT185687] ($1=88.65 Yen) (Compiled by Rie Ishiguro and Kazunori Takada; Editing by Michael Watson)

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UPDATE 1-Fitch says Japan fiscal consolidation harder now

July 14, 2010 By Leave a Comment

HONG KONG, July 13 (Reuters) – Japan’s ruling party’s poor showing at Sunday’s elections will make it more difficult for the country to push through fiscal consolidation and a delay in a credible plan beyond the year-end would increase the risk of a rating downgrade, Fitch Ratings said on Tuesday.

Prime Minister Naoto Kan’s ruling coalition suffered a major blow in Sunday’s upper house election, putting his policies to deal with the country’s massive debt at risk. [ID:nTOE66B066]

“If we don’t see a credible plan come through by the end of the year, it will send a negative signal for its rating, adding pressure to the credit rating,” Andrew Colquhoun, Fitch’s sovereign analyst for Japan, told Reuters.

Fitch has rated Japan’s foreign currency debt AA and its local currency debt at AA-minus, both with a stable outlook.

However, Colquhoun said he was not pessimistic about the government’s ability to draw up such a plan and said the public had not turned its back on fiscal consolidation as a policy objective.

“The election will make it more difficult for the government to draw up and implement such a plan, but I am not too pessimistic as I do not read the election results as a rejection of fiscal consolidation,” he said.

This was reflected in the better showing by the main opposition Liberal Democratic Party (LDP), which has said that Japan should raise the 5 percent consumption tax to 10 percent, he said.

In Sunday’s upper house poll, Prime Minister Naoto Kan’s ruling Democratic Party of Japan (DPJ) won 44 seats and its tiny coalition partner none, losing their majority in parliament’s upper house. That was fewer than the 51 seats won by the LDP.

Rival rating agency Standard & Poor’s has warned it might cut Japan’s sovereign grade as the ruling party’s mauling in a weekend election posed new hurdles for Kan’s plans to cut public debt.

Colquhoun said Japan’s rating was under pressure in the medium term from a declining domestic savings rate and this was reflected in the recent pension fund selling of Japanese government bonds (JGB).

Japanese public pensions turned net sellers of JGBs for the first time in nine years in the fiscal year that ended in March, the Nikkei business daily said on Tuesday.

Japan’s outstanding public debt is the largest among industrial nations, approaching twice the size of its gross domestic product, so any indication that there will be less investment flows into JGBs could be a worry.

But Colquhoun said there was no financing pressure in the near term as the domestic savings rate was still positive and resources were being generated for JGB purchases.

“The banking system, pension funds and insurance companies all have a strong appetite for JGBs, but there is a risk in the medium term,” he said. (Reporting by Umesh Desai; Editing by Jacqueline Wong and Jonathan Hopfner)

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Fitch says Japan fiscal consolidation harder now

July 14, 2010 By Leave a Comment

July 13 (Reuters) – Japan’s ruling party’s poor showing at Sunday’s elections will make it more difficult for the country to push through fiscal consolidation and a delay in a credible plan beyond the year-end would increase the risk of a rating downgrade, Fitch ratings said on Tuesday.

Prime Minister Naoto Kan’s ruling coalition suffered a major blow in Sunday’s upper house election, putting his policies to deal with the country’s massive debt at risk. [ID:nTOE66B066]

“If we don’t see a credible plan come through by the end of the year, it will send a negative signal for its rating, adding pressure to the credit rating,” Andrew Colquhoun, Fitch’s sovereign analyst for Japan, told Reuters.

However, Colquhoun said he was not pessimistic about the government’s ability to draw up such a plan.

“The election will make it more difficult for the government to draw up and implement such a plan, but I am not too pessimistic as I do not read the election results as a rejection of fiscal consolidation,” he said.

Fitch has rated Japan’s foreign currency debt AA and its local currency debt at AA-minus, both with a stable outlook. (Reporting by Umesh Desai; Editing by Jacqueline Wong)

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Factbox: Winners and losers in the U.S. financial bill

June 29, 2010 By Leave a Comment

(Reuters) – U.S. lawmakers are close to finalizing legislation that will overhaul the country’s financial system and usher in new rules for Wall Street.

Politics

A joint House of Representatives and Senate committee approved a bank regulation bill that lawmakers expect to pass each chamber separately in the coming days. It will then be ready for U.S. President Barack Obama to sign into law, possibly by July 4.

Below are some of the likely winners and losers under the regulation bill.

CREDIT RATING AGENCIES – WIN AND LOSE

* Credit rating agencies — such as Moody’s Corp, Standard & Poor’s and Fitch Ratings — will be subject to greater liability.

* Rating agencies could be sued if they “recklessly” failed to review key information in developing a rating.

* The Securities and Exchange Commission will be given two years to find a way to mitigate conflicts of interests at the biggest rating agencies, Moody’s, S&P and Fitch, which are paid by the issuers whose debt they rate. The two years give the agencies breathing space but if the SEC does not find a solution, the regulator is required to implement a proposal by Senator Al Franken and create a board to match rating agencies with debt issuers.

* Federal regulators will be required to remove references to credit rating in their rules in an effort to reduce reliance on the credit rating agencies.

LARGE FINANCIAL FIRMS – WIN AND LOSE

* Large financial firms such as Bank of America and Goldman Sachs will be prohibited from proprietary trading and only be allowed to make minimum investments in hedge funds and private equity funds.

* Large firms will also face tougher standards in what qualifies for capital they are required to set aside to ensure that they do not threaten the stability of the financial system.

* Banks such as Goldman and JPMorgan Chase will be forced to spin off some of their profitable derivatives business or risk losing access to the Federal Reserve’s emergency funds. But banks’ biggest volume instruments such as foreign exchange and interest rate swaps will still be allowed to be traded by banks.

* The firms’ financial products such as mortgages and credit cards will be subjected to new rules from a newly created bureau designed to protect customers from risky products.

* Most derivatives will be forced on to exchanges or through clearinghouses, in an attempt to limit the effect that large, risky trades can have on the economy, another factor that could curb bank profits. Non-financial players such as manufacturers, however, would be exempt.

SMALL BANKS – WIN

* The Federal Reserve will continue supervising small banks. Small banks wanted to maintain a supervisory structure they were familiar with.

* Banking regulators will be the primary regulator to enforce rules for small banks’ financial products. The new consumer financial regulator will provide backup enforcement.

U.S. FEDERAL RESERVE – WIN

* Gains powers to supervise systemically important financial firms.

* Retains authority to supervise banks of all sizes.

* Part of a “risk council” that will have authority to monitor risk in the financial system and decide whether a large complex company needs to divest assets.

* Becomes home for the new Consumer Financial Protection Bureau. Will have power along with other regulators to appeal consumer protection bureau’s rules if deemed to undermine stability of financial system or banks’ deposits.

* The Fed escaped congressional reviews of its monetary policy but will be subject to reviews of its emergency lending and open market activities.

* Democrats and Republicans originally wanted to strip the Fed of its powers to supervise banks and confine the central bank to setting monetary policy and acting as the lender of last resort.

CONSUMERS – WIN

* New rules to protect consumers from risky financial products could only be overturned by banking regulators if banking regulators believe the rules could threaten the financial system or banks’ deposits.

* The new consumer regulator will be housed in the Federal Reserve, which has been criticized for failing to rein in the risky lending that contributed to the financial crisis.

* The consumer regulator will get funding from the Fed and would get the authority to request more funds from Congress.

* The consumer regulator will be able to write its own rules for a slew of products such as mortgages and credit cards and enforce those rules.

INVESTORS/SHAREHOLDERS – WIN AND LOSE

* Broker-dealers who provide financial advice will not immediately be required to have fiduciary duties, which would require them to act in their clients best interests. The SEC must first study the issue for six months and then would have authority to impose those duties on brokers if the regulator determines they are necessary.

* Publicly-traded companies will be required to ask their shareholders whether they want a non binding vote on executive pay annually, once every two years or once every three years. Originally, Democrats wanted to give shareholders an annual say on executive pay.

* The SEC will have the authority to give shareholders and easier and cheaper way to nominate corporate board directors.

* The Municipal Securities Rulemaking Board will be required to impose fiduciary duties on municipal bond advisers.

AUTO DEALERS – WIN

Auto dealers that do financing will be exempt from oversight by the new consumer bureau, and stay within the jurisdiction of the Federal Trade Commission.

PRIVATE POOLS OF CAPITAL – WIN

* Advisers to hedge funds and private equity funds with more than $150 million in assets will be required to register with the SEC. Venture capital funds will be exempt.

CLEARINGHOUSES – WIN

* Derivatives clearinghouses will be able to borrow in emergencies from the Federal Reserve, as long as the systemic risk council, a majority of Fed governors and the Treasury Secretary decide it is necessary.

LAW FIRMS – WIN

* Regulators like the Commodity Futures Trading Commission and Securities and Exchange Commission will have scores of rules to write in coming months to implement the legislation, meaning lots of billable hours for law firms and consultants advising clients on how to respond to proposed rules.

CFTC/SEC – WIN

* The CFTC and SEC will gain new authority to regulate the $615 trillion over-the-counter derivatives market.

* The SEC will win power to oversee the hedge fund industry.

(Reporting by Charles Abbott, Kim Dixon, Roberta Rampton, Rachelle Younglai; additional reporting by Ann Saphir in Chicago; editing by Anthony Boadle)

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Number of Russia companies may face debt issues – Fitch

June 23, 2010 By Leave a Comment

June 22 (Reuters) – Fitch Ratings said on Tuesday that a number of Russian companies may face debt restructuring problems in 2011-2012.

“The peak of credit taking came in 2008 and so the peak of refinancing falls in 2011-2012, and something will have to be done with the peak,” Nikolai Lukashevich, senior director and Fitch’s Head of Russian/CIS Corporates, said at a conference. “From the point of view of crisis impact, it cannot be said that the situation is fully resolved.”

(Reporting by Oksana Kobzeva; Writing by Lidia Kelly; Editing by Alfred Kueppers)

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UPDATE 2-Plans to sell Indonesia’s Bank Panin off -sources

June 23, 2010 By Leave a Comment

SYDNEY/SINGAPORE, June 22 (Reuters) – Indonesia’s Gunawan family, which controls PT Bank Panin (PNBN.JK), has called off plans to sell its 46 percent stake with a current market value at $1.3 billion after lower-than-expected bids, two sources said.

The sources, who have direct knowledge of the deal, said the family had expected offers over 3 times book value but the bids came in much lower, prompting them to defer the sale.

The sources declined to be named as they are not authorised to speak to the media.

Panin, now the seventh-largest Indonesian bank with a market value of $2.8 billion, is regarded as attractive since it is one of the few banking assets up for grabs in a fast-growing market. Fitch Ratings recently painted a rosy outlook for Indonesian banks, despite a somewhat crowded marketplace. [ID:nWLB2798].

But the recent freeze in global debt markets and uncertainty over the health of the global economy forced bidders to turn more conservative, one of the sources said.

Another Asian bank on the block, Korea Exchange Bank (004940.KS), has also not drawn much interest.

A report on Monday said private equity fund MBK Partners was the sole bidder for the asset, which was also considered by by Australia and New Zealand Banking Group (ANZ.AX) and Standard Chartered (STAN.L). [ID:nTOE65K08F]

One source said ANZ, which already owns 38.5 percent of Panin, and Standard Chartered were among three firms that put in indicative bids for Panin.

Analysts were quick to point out that without a takeover, Panin’s share price premium will deflate as it is overvalued based solely on fundamentals.

“We doubt that the controlling Gunawan family will find a buyer at a price it would find acceptable,” Standard Chartered analyst John Caparusso said in a note.

“Should no takeover transpire, we think Panin is overvalued relative to its weak underlying earnings power.”

At 0437 GMT, Panin shares fell 1 percent, while its top shareholder Panin Financial (PNLF.JK) dropped 2.3 percent. The broader market was little changed .JKSE.

HIGH EXPECTATIONS

“A few years ago the family had the opportunity to sell its stake at the high end of 3 times book value, they decided not to go through with it but that’s the price that they have in the back of their mind now,” one of the sources said.

But high expectations from the controlling family scuttled any chances for a deal, one source said.

ANZ and Panin declined comment.

The Gunawan family set up the bank in 1971 and though it sold a stake to ANZ in 1999, has held control. The family had retained UBS to run the sale. [ID:nTOE64I04S].

Macquarie said in a recent note that it expected Panin to fetch 3.5 times its book value given it is among last available sizeable bank in Indonesia.

It added the last Indonesian bank deal– Bank Mestika, a mid-sized regional bank in North Sumatra bought by Malaysia’s RHB Capital (RHBC.KL) in 2009– was done at 3.2 times and the much bigger Panin should command a higher price. (Additional reporting by Michael Smith; Editing by Ed Davies and Valerie Lee)

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Fitch sees ‘upward trend’ in Turkey’s ratings – TV

June 17, 2010 By Leave a Comment

June 16 (Reuters) – Ayse Botan Berker, Fitch Ratings’ general manager in Turkey, said on Wednesday an “upward trend” in the country’s ratings may continue if the government maintains its current fiscal policies.

Berker was speaking in an interview with Bloomberg television’s local affiliate in comments that were broadcast live.

In December, Fitch was the first of the three main ratings agencies to raise Turkey’s sovereign ratings, to BB+ from BB- on what it said was the country’s fiscal resilience.

(editing by John Stonestreet)

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Fitch Updates Recovery Analyses for U.S. For-Profit Hospital Operators

June 10, 2010 By Leave a Comment

NEW YORK–(Business Wire)–
Fitch Ratings has published updated recovery analyses for U.S. For-Profit
Hospital operators, including:

–Community Health Systems, Inc.

–HCA, Inc.

–Health Management Associates, Inc.

–Tenet Healthcare Corp.

The interactive recovery analysis worksheets are available at
‘www.fitchratings.com’ under the following headers:

Sectors >> Corporate Finance >> Corporates >> Research

The Recovery Ratings reflect the application of Fitch’s current criteria which
is available on Fitch’s website at ‘www.fitchratings.com’ and specifically
includes the following:

–’Corporate Rating Methodology’, Nov. 24, 2009;

–’Recovery Ratings and Notching Criteria for Nonfinancial Corporate Issuers’,
Nov. 24, 2009;

– ‘U.S. Health Care Sector Recovery Rating Methodology, Feb. 11, 2008.

Additional information is available at ‘www.fitchratings.com’.

Related Research: U.S. For-Profit Hospital Recovery Models

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=532145

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S
PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF
CONDUCT’ SECTION OF THIS SITE.

Fitch Ratings
Megan Neuburger, +1-212-908-0501 (New York)
Robert Kirby, +1-312-368-3147 (Chicago)
Media Relations:
Cindy Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com

Copyright Business Wire 2010

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Fitch to Rate CFAST 2008-B B Note Trust

June 10, 2010 By Leave a Comment

NEW YORK–(Business Wire)–
Fitch Ratings expects to rate CFAST 2008-B B Note Trust (2008-B BNT) as follows:

–$90,300,000 6.54% trust notes ‘BBB’; Outlook Stable.

The expected ratings are based on receipt and review of all applicable
transaction documents, including all legal opinions, by Fitch.

The trust notes are directly secured by the outstanding class B notes of
Chrysler Financial Auto Securitization Trust 2008-B (CFAST 2008-B), issued on
May 19, 2008. As such, the ratings of the trust notes issued by 2008-B BNT are
directly linked to those of the outstanding CFAST 2008-B class B notes.

The trust notes are being offered under Rule 144A under the Securities Act of
1933. The final scheduled maturity date of the trust notes is Nov. 10, 2014.

CFAST 2008-B had previously sold the class B notes in a private transaction in
2008. An affiliate of Chrysler Financial Services Americas LLC (CF), Chrysler CA
Lease Depositor LLC, purchased the CFAST 2008-B class B notes in another
transaction in Oct. 2009 and is currently selling them to the 2008-B BNT.

The trust notes issued by 2008-B BNT will be entitled to receive all cash flows
and payments made on the CFAST 2008-B class B notes. The holders of the trust
notes will receive payment distributions on the same day as the 2008-B BNT
trustee receives them, in this direct pass-through structure. The trust notes
are secured by payments made on the CFAST 2008-B class B notes, which are backed
by a pool of cars, sport utility vehicles and light-duty trucks originated by
CF.

CF is the administrator of 2008-B BNT. The indenture trustee of 2008-B BNT is
Citibank, N.A., and the owner trustee is BNY Mellon Trust of Delaware. CF is the
sponsor and servicer of CFAST 2008-B.

Since the ratings of the trust notes are directly linked to those of the
outstanding CFAST 2008-B class B notes, Fitch reviewed the performance of CFAST
2008-B on May 17, 2010. As such, Fitch affirmed the outstanding class B notes at
‘BBB’ and revised the Rating Outlook to Stable from Negative. For more
information on these rating actions, please refer to the press release titled
‘Fitch Affirms 3 CFAST Transactions; Revises Outlooks to Stable’ dated May 18,
2010, available on Fitch’s web site at ‘www.fitchratings.com’.

The expected ratings reflect the application of Fitch’s criteria: ‘U.S. Auto
Loan ABS Rating Criteria’ dated March 18, 2010; and ‘Global Structured Finance
Rating Criteria’ dated Sept. 30, 2009.

For more information about Fitch’s comprehensive subscription service
FitchResearch, which includes all presale reports, surveillance, and credit
reports on more than 20 asset classes, contact product sales at +1-212-908-0800
or at ‘webmaster@fitchratings.com’.

Additional information is available at ‘www.fitchratings.com’.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S
PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF
CONDUCT’ SECTION OF THIS SITE.

Fitch Ratings
David Petu, CFA +1-212-908-0280
Hylton Heard, +1-212-908-0214 (New York)
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com

Copyright Business Wire 2010

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Ratings agencies concerned about Hungary

June 8, 2010 By Leave a Comment

(Reuters) – Warnings from Hungarian officials last week about a potential sovereign debt default raise questions about the country’s fiscal outlook and could be negative for its credit rating, rating agencies said on Monday.

Moody’s said comments made by officials in Hungary’s new center-right Fidesz government suggesting the country was close to a Greek-style economic meltdown were “inflammatory” and came at “a delicate time” for global markets.

“The statements are a credit negative because they bring renewed attention to Hungary’s high public and external debts, which, by threatening to drive up interest rates and push down the exchange rate, endanger Hungary’s economic recovery,” Moody’s analyst Dietmar Hornung said in Moody’s weekly credit outlook.

David Heslam, director of Fitch Ratings’ emerging Europe sovereigns, said the comments would not affect Hungary’s funding options but ultimately played into a “key ratings driver” — its fiscal path.

“We are concerned about the fiscal outlook post-elections… Given the high level of debt, there is little room for policy slippage,” he told Reuters.

Noting that Hungary still had a multilateral financing program with the International Monetary Fund that has yet to be drawn this year, Heslam said Fitch would wait to see further details of the government’s new fiscal measures before moving on its credit rating.

Moody’s Hornung said the new government displayed an “apparent willingness to adopt unorthodox measures to stimulate economic growth” which was also sparking concerns.

“In our view, these uncertainties threaten to further impair Hungary’s creditworthiness,” Hornung added.

Moody’s has Hungary’s Baa1-rated government bonds on negative outlook. Fitch has Hungary’s ratings at BBB with a negative outlook.

Standard & Poor’s, which has Hungary’s ratings at BBB- with a stable outlook, said in a statement:

“We will review the government’s report on public finances and the government’s action plan before we would comment further.”

(Reporting by Sebastian Tong and Carolyn Cohn; editing by )

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UPDATE 1-Ratings agencies concerned about Hungary

June 8, 2010 By Leave a Comment

LONDON, June 7 (Reuters) – Warnings from Hungarian officials last week about a potential sovereign debt default raise questions about the country’s fiscal outlook and could be negative for its credit rating, rating agencies said on Monday.

Moody’s said comments made by officials in Hungary’s new centre-right Fidesz government suggesting the country was close to a Greek-style economic meltdown were “inflammatory” and came at “a delicate time” for global markets. [ID:nLDE6550I7]

“The statements are a credit negative because they bring renewed attention to Hungary’s high public and external debts, which, by threatening to drive up interest rates and push down the exchange rate, endanger Hungary’s economic recovery,” Moody’s analyst Dietmar Hornung said in Moody’s weekly credit outlook.

David Heslam, director of Fitch Ratings’ emerging Europe sovereigns, said the comments would not affect Hungary’s funding options but ultimately played into a “key ratings driver” — its fiscal path.

“We are concerned about the fiscal outlook post-elections… Given the high level of debt, there is little room for policy slippage,” he told Reuters.

Noting that Hungary still had a multilateral financing programme with the International Monetary Fund that has yet to be drawn this year, Heslam said Fitch would wait to see further details of the government’s new fiscal measures before moving on its credit rating.

Moody’s Hornung said the new government displayed an “apparent willingness to adopt unorthodox measures to stimulate economic growth” which was also sparking concerns.

“In our view, these uncertainties threaten to further impair Hungary’s creditworthiness,” Hornung added.

Moody’s has Hungary’s Baa1-rated government bonds on negative outlook. Fitch has Hungary’s ratings at BBB with a negative outlook.

Standard & Poor’s, which has Hungary’s ratings at BBB- with a stable outlook, said in a statement:

“We will review the government’s report on public finances and the government’s action plan before we would comment further.” (Reporting by Sebastian Tong and Carolyn Cohn; editing by )

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

HCC Insurance Holdings, Inc. to Present at Oppenheimer Insurance CEO Summit

June 5, 2010 By Leave a Comment

HOUSTON, June 4, 2010 (GLOBE NEWSWIRE) — HCC Insurance Holdings, Inc.
(NYSE:HCC) announced today that HCC President and Chief Executive Officer John
N. Molbeck, Jr. will be presenting as part of two panels at the Oppenheimer
Insurance CEO Summit in New York City on Tuesday, June 8.

The first panel, entitled “Professional Liability: How has the Pricing Dynamic
Changed Post-Credit Crisis?” will begin at 2:40 p.m. Eastern Daylight Time. The
second panel, “Specialty Insurance: Pricing and Exposure Trends in Today’s
Economy,” will begin at 3:40 p.m. Eastern Daylight Time.

Webcasts of these two panel discussions will be available until September 8,
2010 at the following URL links:

Professional Liability Panel:

http://www.veracast.com/webcasts/opco/insurance2010/11108129.cfm

Specialty Insurance Panel:

http://www.veracast.com/webcasts/opco/insurance2010/12109109.cfm

Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. is a leading
international specialty insurance group with offices across the United States
and in the United Kingdom, Spain and Ireland. As of March 31, 2010, HCC had
assets of $8.9 billion and shareholders’ equity of $3.1 billion. HCC’s major
domestic and international insurance companies have a financial strength rating
of “AA (Very Strong)” from Standard & Poor’s Corporation. HCC’s major domestic
insurance companies have a financial strength rating of “AA (Very Strong)” from
Fitch Ratings, “A1 (Good Security)” from Moody’s Investors Service, Inc., and
“A+ (Superior)” by A.M. Best Company, Inc.

For more information about HCC, please visit http://www.hcc.com.

Forward-looking statements contained in this press release are made under “safe
harbor” provisions of the Private Securities Litigation Reform Act of 1995 and
involve a number of risks and uncertainties. The types of risks and
uncertainties which may affect the Company are set forth in its periodic reports
filed with the Securities and Exchange Commission.

CONTACT: HCC Insurance Holdings, Inc.
Jonathan Lee, HCC Director of Investor Relations
(713) 996-1156

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UPDATE 1-Spain’s assets hurt by macro concerns, euro debt

June 2, 2010 By Leave a Comment

MADRID, June 1 (Reuters) – Spain’s blue-chip shares fell sharply on Tuesday and the country’s borrowing costs rose, as a sell-off sparked by concerns about euro zone finances and the fragility of the global economic recovery gathered pace.

By 0848 GMT, the IBEX .IBEX index of 35 leading shares was down 3.3 percent to 9,053.0,points, having finished May down 10 percent.

“The deterioration of Europe’s public finances is underlining the idea that the world recovery has definitively halted and the risk of a double dip recession is increasing,” a Madrid-based trader said.

“There is a great risk aversion and any slightly negative macro news serves as a pretext to sell.”

The 10-year Spanish/German government bond yield spread ES10YT=RR EU10YT=RR widened to 172 basis points (bps) — the widest since early May — from around 154 bps on Friday, before Fitch Ratings cut Spain’s debt rating by one notch to AA-plus with a stable outlook.

The cost of protecting government debt default in Spain rose to 245.5 bps, up from 218.8 bps on New York close on Friday, according to CDS monitor CMA DataVision. New York markets were closed on Monday.

Overnight, an official survey showed China’s factories had scaled back production last month, while PMI data on Tuesday showed the pace of recovery in Spain’s manufacturing sector was easing, setting back hopes for a quick recovery. [ID:nSLAVGE65I]

Spain, the eurozone’s fourth largest economy, narrowly passed a 15-billion-euro austerity package last week as it struggles to convince investors that it can avoid a Greek-style debt crisis.

Adding to market concerns, the European Central Bank said on Monday that eurozone banks face more potential writedowns. [ID:nLAG006303]

Bank stocks across Europe fell, with Spain’s major banks BBVA (BBVA.MC) down 2.9 percent and Santander (SAN.MC) down 2.5 percent.

Telefonica (TEF.MC), the heaviest weight Spanish stock, was down 2.22 percent.

The IBEX has lost 24 percent so far this, versus a 11.6 percent fall for the pan-European FTSEurofirst 300 .FTEU3 index. (Additional reporting by Ian Chua in London; Editing by Louise Heavens)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

French CDS rises on market jitters over ratings

June 2, 2010 By Leave a Comment

June 1 (Reuters) – The cost of protecting government debt against default in France as well as other peripheral euro zone countries rose on Tuesday as investors remained anxious about sovereign ratings.

Five-year credit default swaps (CDS) on French government debt rose to 74.6 basis points from 68.6 bps at the New York close on Friday, according to CDS monitor CMA DataVision. New York markets were closed on Monday.

It means the cost rises to 74,600 euros to protect 10 million euros-worth of French government bonds.

The French CDS was nearing a record high 80.6 bps set on May 6.

France’s Budget Minister Francois Baroin said on Sunday that keeping the country’s triple-A rating was “a stretch”. [ID:nLDE64T0B8]

Peripheral sovereign CDS also rose, including those of Spain and Greece. Late on Friday, Fitch Ratings downgraded Spain to double-A plus. (Reporting by George Matlock)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

European shares rise, shrugging off Spain downgrade

June 1, 2010 By Leave a Comment

(Reuters) – European equities advanced by midday on Monday, brushing off a downgrade to Spain’s sovereign credit rating, though the region’s stocks were headed for their worst monthly losses in 14 months on euro zone’s debt problems.

By 1033 GMT, the FTSEurofirst 300 .FTEU3 index of leading European shares was up 0.3 percent at 1,000.66 points as trading was subdued with the UK and the U.S. markets closed for holiday.

The pan-European index is down 5.8 percent this month, on track for its worst monthly percentage loss since February 2009.

Fitch Ratings cut Spain’s debt rating by one notch to AA-plus with a stable outlook after European markets closed on Friday, pulling Wall Street lower.

The move by Fitch had largely been priced in by the markets, though Spain’s Ibex 35 .IBEX fell 0.7 percent, with Banco Santander (SAN.MC) down 0.8 percent and BBVA (BBVA.MC) falling 1.6 percent. Standard & Poor’s downgraded Spain’s ratings by one notch to AA with a negative outlook on April 28.

The downgrade “was a following up of what we knew already. It was not as sanguine as the S&P was,” said Valerie Plagnol, chief strategist at CM-CIC Securities in Paris.

“The market is still wary of the situation and the euro remains under pressure.”

The euro recovered slightly on Monday but it remained on the back foot as the downgrade served as a reminder about the euro zone debt crisis.

Across Europe, Germany’s DAX .GDAXI put on 0.4 percent and France’s CAC 40 .FCHI added 0.1 percent.

Over the weekend, France admitted that keeping its top-notch credit rating would be a stretch without some tough budget decisions, following German hints that Berlin may resort to raising taxes to help bring down its deficit.

Meanwhile, European Central Bank Governing Council member Axel Weber said the European Union needed stricter mechanisms for monitoring member states that receive financial aid from others, and a bankruptcy procedure should be looked at.

Aiding sentiment on Monday, the Business Climate Indicator for the euro zone improved slightly in May, suggesting economic activity in industry would continue to recover in the coming months.

The VDAX-NEW volatility index .V1XI, a gauge of investor risk appetite or aversion, eased 0.3 percent. The lower the volatility index, which is based on sell- and buy-options on Frankfurt’s top-30 stocks, the higher is investor’s appetite for risky assets such as equities.

European markets were little impacted as tensions spread across the Middle East after the Israeli navy boarded ships in an aid convoy, some flying Turkish flags, and killed more than a dozen people. Turkish shares fell more than 2 percent.

BP ‘TOP KILL’ FAILED

BP shares (BP.L) in Frankfurt (BP.F) shed 7.8 percent after its latest attempt to plug an oil leak in the Gulf of Mexico failed. U.S. government and BP officials warned the leak from the blown-out oil well may not be stopped until August.

With the oil sector, it was mixed. Royal Dutch Shell (RDSa.AS) rose 0.6 percent, while Total (TOTF.PA) fell 0.4 percent.

Among other individual movers, Finmeccanica (SIFI.MI) put on 2.1 percent. The Rome prosecutor’s office denied it was probing the Italian defense and aerospace company in a money-laundering investigation.

(Editing by Karen Foster)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

European shares rise, shrugging off Spain downgrade

June 1, 2010 By Leave a Comment

LONDON, May 31 (Reuters) – European equities advanced by midday on Monday, brushing off a downgrade to Spain’s sovereign credit rating, though the region’s stocks were headed for their worst monthly losses in 14 months on euro zone’s debt problems.

By 1033 GMT, the FTSEurofirst 300 .FTEU3 index of leading European shares was up 0.3 percent at 1,000.66 points as trading was subdued with the UK and the U.S. markets closed for holiday.

The pan-European index is down 5.8 percent this month, on track for its worst monthly percentage loss since February 2009.

Fitch Ratings cut Spain’s debt rating by one notch to AA-plus with a stable outlook after European markets closed on Friday, pulling Wall Street lower.

The move by Fitch had largely been priced in by the markets, though Spain’s Ibex 35 .IBEX fell 0.7 percent, with Banco Santander (SAN.MC) down 0.8 percent and BBVA (BBVA.MC) falling 1.6 percent. Standard & Poor’s downgraded Spain’s ratings by one notch to AA with a negative outlook on April 28.

The downgrade “was a following up of what we knew already. It was not as sanguine as the S&P was,” said Valerie Plagnol, chief strategist at CM-CIC Securities in Paris.

“The market is still wary of the situation and the euro remains under pressure.”

The euro EUR= recovered slightly on Monday but it remained on the back foot as the downgrade served as a reminder about the euro zone debt crisis.

Across Europe, Germany’s DAX .GDAXI put on 0.4 percent and France’s CAC 40 .FCHI added 0.1 percent.

Over the weekend, France admitted that keeping its top-notch credit rating would be a stretch without some tough budget decisions, following German hints that Berlin may resort to raising taxes to help bring down its deficit. [ID:nLDE64T0A8]

Meanwhile, European Central Bank Governing Council member Axel Weber said the European Union needed stricter mechanisms for monitoring member states that receive financial aid from others, and a bankruptcy procedure should be looked at. [ID:nBAF004106]

Aiding sentiment on Monday, the Business Climate Indicator for the euro zone improved slightly in May, suggesting economic activity in industry would continue to recover in the coming months.

The VDAX-NEW volatility index .V1XI, a gauge of investor risk appetite or aversion, eased 0.3 percent. The lower the volatility index, which is based on sell- and buy-options on Frankfurt’s top-30 stocks, the higher is investor’s appetite for risky assets such as equities.

European markets were little impacted as tensions spread across the Middle East after the Israeli navy boarded ships in an aid convoy, some flying Turkish flags, and killed more than a dozen people. [ID:nnLDE64U0P3] Turkish shares fell more than 2 percent.

BP ‘TOP KILL’ FAILED

BP shares (BP.L) in Frankfurt (BP.F) shed 7.8 percent after its latest attempt to plug an oil leak in the Gulf of Mexico failed. U.S. government and BP officials warned the leak from the blown-out oil well may not be stopped until August. [ID:nN31222759]

With the oil sector, it was mixed. Royal Dutch Shell (RDSa.AS) rose 0.6 percent, while Total (TOTF.PA) fell 0.4 percent.

Among other individual movers, Finmeccanica (SIFI.MI) put on 2.1 percent. The Rome prosecutor’s office denied it was probing the Italian defence and aerospace company in a money-laundering investigation. (Editing by Karen Foster)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Nikkei edges lower, market mostly shrugs off Spain

May 31, 2010 By Leave a Comment

* Spain downgrade not a surprise, factored in – analyst

Stocks

* Charts tentatively signal chance of rebound

* Nikkei on track for worst monthly fall in over 1 yr

* Coalition partner pullout not having an impact

By Elaine Lies

TOKYO, May 31 (Reuters) – Japan’s Nikkei average slipped 0.1 percent on Monday, weighed down by trading firms after commodities prices fell following a downgrade in Spain’s credit rating that reinforced worries about euro zone debt issues.

But a number of exporters including Canon Inc (7751.T) edged higher as the yen fell back against the dollar and the euro, with market players saying bargain hunting was likely on any dips.

Fitch cut Spain’s credit rating by one notch on Friday, saying the country’s economic recovery will be more muted than the government forecast due to its austerity measures. The downgrade helped send Wall Street lower ahead of a three-day weekend. [ID:nLDE64R1ZE] [ID:nN28218151]

Market players said however the impact of the rating cut on the broader market was limited for now, noting that many analysts had expected the move and only the timing was a surprise.

“In many ways, this is news that was already out there, so it doesn’t appear to have fed risk avoidance all that much,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities.

The benchmark Nikkei .N225 shed 14.09 points to 9,748.89, while the broader Topix lost 0.1 percent to 878.10.

The Nikkei had lost 12 percent for May as of the end of trade on Friday, putting it on track for its worst one-month performance in well over a year.

But technical indicators are starting to point tentatively towards a possible rebound, with the Nikkei’s relative strength index (RSI) climbing above 30 late last week. Anything under 30 is considered oversold.

The Nikkei’s MACD has also stopped falling and appears to be inching upwards.

“The Fitch ratings cut on Spain shows that the European issues have not yet been cleared up at all, and this prompted selling of overseas stocks,” said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

“Yet while there’s a trend towards a stronger yen, it isn’t pronounced, and it’s possible that Wall Street’s falls may have been exaggerated by investor desire to take profits ahead of a three-day weekend. All of this may limit falls.”

POLITICS, CURRENCY

Japan’s tiny Social Democratic Party decided on Sunday to leave the ruling coalition ahead of an upper house election but this was not having much of an impact on the Nikkei, market players said. [ID:nSGE64T00L]

“After all, it’s not as if the government is going to fall today, though as the July elections approach there may be more concern about politics overall,” said Yamagishi at Mitsubishi UFJ Morgan Stanley Securities.

The euro rose 0.6 percent against the yen to 112.33 yen EURJPY=R while the dollar rose 0.3 percent against the yen at 91.35 yen JPY=

Canon rose 0.9 percent to 3,775 yen and TDK Corp (6762.T) crawled up 0.8 percent to 5,380 yen.

Honda Motor Co (7267.T) was slightly firmer at 2,783 yen.

Honda is still trying to resolve a labour dispute at a China parts plant that led to the closure of all four of its car plants in the country and has no timetable for resuming production, a company spokesman said on Friday. [ID:nTOE64R06P]

Trading houses slid after metals prices fell on Friday in the wake of the Spain ratings cut.

Mitsubishi Corp (8058.T) shed 1.7 percent to 2,038 yen and Mitsui & Co (8031.T) lost 2.4 percent to 1,290 yen. Itochu Corp (8001.T) fell 1.9 percent to 743 yen.

Bearing and car parts manufacturer Jtekt (6473.T) fell 3.7 percent to 920 yen after it said it will raise up to 19.3 billion yen ($212 million) through a share offering to the market and a placement with Toyota Motor Corp. (7203.T). (Reporting by Elaine Lies; Editing by Charlotte Cooper)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Euro holds steady above lows after Spain downgrade

May 31, 2010 By Leave a Comment

(Reuters) – The euro stabilized against the dollar on Monday but remained under downward pressure after Fitch Ratings downgraded Spain’s credit rating, refueling concern about Europe’s debt woes hurting the global economy.

Investors may avoid building positions up as the United States and the UK are on holiday on Monday, though some month-end flows may be seen in the market, traders said.

The European single currency is on track for a hefty 7.7 percent decline against the dollar in May, in what would be its sixth straight monthly fall and the biggest percentage drop since January 2009.

“The market is susceptible to negative news and small rallies in the euro on short-covering don’t last for long,” said a trader at a Japanese bank.

“This jitteriness in the market is likely to continue for a while, and it is difficult to see a recovery in market sentiment as there are worries that further bad news about southern European countries may come out,” he said.

Fitch cut Spain’s credit rating by one notch to AA-plus on Friday, saying the country’s economic recovery will be “more muted” than the government forecast due to its austerity measures. The outlook on the new rating is stable.

The euro was steady at $1.2282, staying above a four-year low of $1.2143 hit this month.

“The next 24-hours might put the recent euro low in play at $1.2143,” said a trader at a major Canadian bank.

A key support is seen around $1.2135, a 50 percent retracement of the 2000-08 advance.

Charts indicate a monthly close below $1.2135 would favor additional weakness with the next downside support seen near $1.1640 — a trough hit in November 2005.

The euro was little changed at 111.88 yen, having fallen 0.7 percent on Friday.

The dollar was steady at 91.05 yen. Japanese exporters are expected to sell the greenback when it nears 91.50 yen, traders said.

Month-end flows may have some impact on dollar/yen toward the Tokyo fixing time (10 p.m. EDT) but the currency pair is basically seen staying around 91 yen, they said.

Market players are keeping an eye on Japan’s political turmoil after Japan’s tiny Social Democratic Party on Sunday left the ruling coalition ahead of an election, although its impact on the currency market so far is seen as limited.

Sterling stood at $1.4464 after a British treasury minister resigned on Saturday after revelations about his expenses, dealing a blow to the new coalition government.

(Additional reporting by Anirban Nag in Sydney, Reuters FX analyst Krishna Kumar)

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Nikkei set to slip on Spain downgrade; eyes on yen

May 31, 2010 By Leave a Comment

(Reuters) – Japan’s Nikkei average is likely to slip on Monday after a downgrade of Spain’s credit rating reinforced worries about euro zone debt issues, spooking global investors, but selling may slow if the yen’s advance is checked.

Japan

Japan’s tiny Social Democratic Party decided on Sunday to leave the ruling coalition ahead of an election but this was not expected to have any impact on the Nikkei, market players said.

Fitch cut Spain’s credit rating by one notch on Friday, saying the country’s economic recovery will be more muted than the government forecast due to its austerity measures.

Analysts said the extent of declines in the Nikkei would depend on the yen’s moves against the euro and the performance of stock markets elsewhere in Asia, and that bargain-hunting may easily emerge.

“The Fitch ratings cut on Spain shows that the European issues have not yet been cleared up at all, and this prompted selling of overseas stocks,” said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

“Yet while there’s a trend toward a stronger yen, it isn’t pronounced, and it’s possible that Wall Street’s falls may have been exaggerated by investor desire to take profits ahead of a three-day weekend. All of this may limit falls.”

The euro edged up 0.1 percent against the yen to 111.79 yen

while the dollar was flat against the yen at 91.03 yen.

The benchmark Nikkei .N225 is likely to move between 9,550 and 9,800, market players said. It closed at 9,762.98 on Monday and has lost roughly 12 percent so far this month, putting it on track for its worst monthly performance in well over a year.

In a sign the Nikkei may open lower, Nikkei futures traded in Chicago closed at 9,650, down 1.5 percent from the Osaka close.

But technical indicators are starting to point tentatively toward a possible rebound, with the Nikkei’s relative strength index (RSI) climbing above 30 late last week. Anything under 30 is considered oversold.

The Nikkei’s MACD has also stopped falling and appears to be inching upwards.

(Reporting by Elaine Lies; Editing by Edwina Gibbs)

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