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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Indek Harga Saham Gabungan (IHSG) adalah salah satu dari beberapa indeks di Asia yang melawan tren pada perdagangan hari ini (02/11). Sementara kebanyakan indeks Asia, dipimpin oleh saham di Jepang, jatuh karena kekuatiran mengenai kontraksi yang berkelanjutan di Republik Rakyat Tiongkok (RRT), IHSG berhasil naik 0,22% menjadi 4.464,96 poin. Sementara itu, harga minyak jatuh dan dollar Amerika Serikat (AS) memperpanjang kerugian terhadap sebagian besar mata uang negara-negara berkembang.

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The biggest problem for western car-makers is the dominant position of Japan in Indonesia's automotive market. Japan has been dominating the Indonesian car market since the 1970s and there are no signs that this situation will change in the short or long term.

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Several days before a big Dutch trade mission visits Indonesia to enhance bilateral trade relations between both nations, there surfaced reports of three missing Dutch warships. These warships had been sunk by Japanese forces during the Battle of the Java Sea in February 1942 and had been lying on the bottom of the Java Sea off the coast of Java ever since (or, more precise, were believed to be lying there). After divers discovered the wrecks in 2002, the site was declared a war grave. The Dutch government is demanding a full investigation into this violation of a war grave.

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After Japan was disappointed by not being awarded the contract to build a high-speed railway between Indonesia's capital city of Jakarta and Bandung (West Java), the Indonesian government now plans to offer the revitalization of the northern Java railway to Japan. Another project that is expected to be offered to Japan is the Patimban seaport project in Subang (West Java). Indonesian President Joko Widodo is currently in Japan for a two-day visit to attend the Group of Seven summit on invitation of Japanese Prime Minister Shinzo Abe.

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Intense competition in the electronics industry forced the management of Panasonic and Toshiba to restructure their businesses in Indonesia. Panasonic closed one factory (located in Cikarang, West Java) and merged two local units. Meanwhile, Toshiba sold its television and twin-tub washing machine manufacturing plant - also located in Cikarang - to China's Skyworth Group, one of the largest television sets producers in China (with the Coocaa brand) and listed on the stock exchange in Hong Kong.

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Indonesia's heavily depreciated rupiah makes it more difficult for Indonesians to study abroad or to send their children to universities abroad without having the financial aid in the form of a scholarship. For those that are thinking of making such a decision, they need to take into account the performance of the Indonesian rupiah as well as the inflation outlook in the country of destination. So far in 2015, the Indonesian rupiah has depreciated 18 percent against the US dollar, 9 percent against the euro, 14 percent against China's yuan, and 2.4 percent against the Australian dollar.

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Republik Rakyat Tiongkok (RRT) telah memenangkan sebuah kontrak untuk membangun jalur kereta berkecepatan tinggi antara Daerah Khusus Ibukota Jakarta dan Bandung (Jawa Barat), mengalahkan Jepang dalam proses ini. Pada awal bulan ini, Pemerintah Indonesia secara tak terduga memutuskan untuk menunda proposal dari Jepang dan RRT untuk konstruksi jalur kereta berkecepatan tinggi bernilai miliaran rupiah antara kedua kota karena proposal-proposal ini mencakup bantuan keuangan atau jaminan dari Pemerintah Indonesia. Terlebih lagi, Indonesia menganggap kereta super cepat tidak diperlukan untuk rute yang relatif pendek (150 km).

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Contrary to the previous trading day, most emerging Asian currencies strengthened against the US dollar on Tuesday (09/12) supported by the yen’s advance as falling oil prices dented risk appetite. Based on the Bloomberg Dollar Index, Indonesia’s rupiah appreciated 0.47 percent to IDR 12,331 per US dollar today. Despite local firms’ increased US dollar demand to settle debt before the year-end, market participants were happy to learn that Indonesia’s central bank is active in the foreign exchange market to guard the currency.

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Despite positive stock indices in the USA and Europe at the end of last week as well as mostly positive indices in Asia today (08/12), the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) fell due to investors’ appetite for profit taking. Several matters made investors decide to sell their Indonesia shares, including the World Bank’s downward revision of Indonesia’s economic growth in 2015, Japan’s recession, weakening Chinese exports, and the sharply depreciating rupiah exchange rate.

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In line with most other Asian emerging currencies, Indonesia’s rupiah exchange rate depreciated on Friday (28/11). Market players continue to buy US dollars amid falling oil prices. Japan’s yen even fell to a seven-year low against the US dollar after government data showed that household spending declined four percent (y/y) and inflation slowed in the world’s third-largest economy. Based on the Bloomberg Dollar Index, the rupiah had depreciated 0.22 percent to IDR 12,204 per US dollar by 15:35 pm local Jakarta time.

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After the currency of Japan (yen) had weakened to its lowest level in seven years against the US dollar on Tuesday (11/11), the currency rebounded today (12/11) as speculation spread that Japan’s Prime Minister Shinzo Abe is not considering to dissolve parliament and to postpone a planned sales-tax increase. Japan’s currency had gained 0.4 percent to 115.31 per US dollar at 9:02 am London time according to Bloomberg data (yesterday it had touched a seven-year low at 116.10 per US dollar).

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