Japanese companies remain committed to invest in Indonesia - particularly into infrastructure, power and manufacturing - according to the Kansai Economic Federation (Kankeiren), one of Japan's private, non-profit representative economic organizations. Kankeiren Chairman Shosuke Mouri met Indonesia's Chief Economics Minister Darmin Nasution on Monday (07/03) in Jakarta. Japan is one of the biggest investors in Indonesia. During the period 2010-2015 the country invested a combined total of USD $14.9 billion in Indonesia.

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This morning various economic data were released in Asia, most importantly data from China and Japan. China posted a record USD $63.3 billion trade surplus in January 2016, while Japan saw its gross domestic product (GDP) contract more-than-expected at 1.4 percent (y/y) in the fourth quarter of 2015. However, despite weak GDP growth data Japanese stocks managed to surge, while Chinese stocks tumbled after the record monthly trade surplus. How is that possible? And what about Indonesian assets today?

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The Indonesian rupiah is appreciating markedly on Wednesday (10/02). By 12:30 pm local Jakarta time, Indonesia's currency had appreciated 1.62 percent to IDR 13,391 per US dollar based on the Bloomberg Dollar Index, a three-month high. Today, most emerging currencies in Asia are appreciating against the US dollar ahead of Fed Chair Janet Yellen's testimony in US Congress this week. Other factors that support strong rupiah appreciation are speculation that Indonesia will attract investors due to accelerating domestic economic growth and the move of Japan's central bank to introduce negative interest rates.

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In line with the performance of the majority of stock markets in Asia, Indonesia's benchmark Jakarta Composite Index fell 0.63 percent to 4,768.62 points, while the Indonesian rupiah depreciated 0.11 percent to IDR 13,612 per US dollar (Bloomberg Dollar Index) on Tuesday (09/02). It was the first trading week for Indonesian assets after a public holiday (Chinese New Year) on Monday. Asian markets weakened today, led by Japan, due to the equities selloff that occurred in Europe and the USA overnight.

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Two major Japan-based electronics companies, Toshiba and Panasonic, have ceased all operational activities in their manufacturing plants in Indonesia. Toshiba has already closed its television manufacturing plant in Cikarang (West Java) and sold it to China-based Skyworth late last year. Reportedly, this was Toshiba's largest television manufacturing plant outside Japan. Meanwhile, Panasonic is to close its lighting manufacturing plants in Pasuruan (East Java) and Bekasi (West Java).

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Asian stocks were mixed on Monday (01/02). However, Indonesia's benchmark Jakarta Composite Index rose 0.21 percent to 4,624.63 points after a volatile trading day (one hour before trading closed, the index was down more than one percent). Furthermore, the Indonesian rupiah appreciated markedly, while there occurred inflows into bonds. It seems that Japan's surprise move to introduce negative interest rates managed to offset the negative impact of weak manufacturing activity in China and falling crude oil prices.

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Asian stocks are again in deep red territory on Thursday (14/01), led by Chinese shares (which are on track to enter a bear market) as well as Japanese shares. It means that the rebound that had occurred earlier this week - caused by positive export data from China - was short-lived. The continued slide of oil prices (below USD $30 per barrel) and turmoil in China cause money to flow away from equity and fragile emerging market currencies.

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Shares in the Asia-Pacific were mixed after opening on Monday (09/11). While, Japanese shares touched a fresh 2.5 month high on a weaker yen and Chinese shares went up (despite disappointing trade data), shares in Indonesia, South Korea and Australia were down. Indonesia's benchmark Jakarta Composite Index fell approximately 0.50 percent after opening on Monday, while the Indonesian rupiah had depreciated 0.83 percent to IDR 13,676 per US dollar by 09:16 am local Jakarta time.

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Indonesian stocks and the rupiah are feeling the negative impact of news from the USA. Both Federal Reserve Chairwoman Janet Yellen and New York Federal Reserve President William Dudley said a Fed Fund Rate hike in December is a "live possibility" amid low US employment, continued GDP growth and confidence that inflation will rise to the US central bank's target range. As a result of these remarks gold dropped to a one-month low, stocks declined, while bond yields and the US dollar were pushed higher.

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Indonesia's benchmark stock index (Jakarta Composite Index) was one of the few Asian indices that bucked the trend on today's trading day (02/11). Whereas most Asian indices, led by Japanese shares, fell on concern about persistent manufacturing contraction in China, the Jakarta Composite Index managed to rise 0.22 percent to 4,464.96 points. Meanwhile, oil prices dropped and the US dollar extended losses against most emerging market currencies.

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After rallying for three days to try to end on a new resistance level, the Indonesia Stock Exchange (IHSG) finally had to retreat. As we suspected, the index weakened after its record high. Moreover, American and European indices were weak on Thursday, thus influencing the performance of the IHSG on Friday. Lastly, a number of Asian companies reported weak corporate reports that subsequently impacted on Asian stock indices, including the IHSG.

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The positive response of Asian stock markets towards manufacture data from Europe, and the rebound of American and European stocks turned the Indonesia Stock Exchange (IHSG) back into green territory. Positive market sentiments impacted - as usual - on commodity stocks, particularly mining stocks, and which thus gained the most: Vale Indonesia (INCO), Antam (ANTM), Timah (TINS), and Resource Alam Indonesia (KKGI) all increased significantly.

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