Will the Japanese yen be recovered?

Japan intends to retain a stake in Russia’s Sakhalin-1 oil and gas project after Russia temporarily banned Western investors from selling shares in the country, Industry Minister Koichi Hagiuda said on Monday.

Mr. Koichi Hagiuda told a press conference that the project contributed to the diversification of Japan’s energy supply.

“Sakhalin-1 is a valuable non-Middle East source for Japan, as Japan relies on the Middle East for 90 percent of its crude oil imports,” said Haguida, Minister of Economy, Commerce and Industry.

“There has been no change in preserving the interests of Japanese companies,” he said.

Russia has banned investors from unfriendly countries from selling shares in major banks and energy projects, including Sakhalin-1, by the end of the year, adding to pressure on Western sanctions.

Japanese conglomerate Sakhalin Oil and Gas Development owns 30 percent of Sakhalin-1.

Separately, the Russian government issued a decree on Aug. 2 giving foreign investors in the Sakhalin-2 liquefied natural gas (LNG) project a month to require their shares in a new unit to replace an existing one. Foreign investors include Royal Dutch Shell (LON:RDSa) and Japanese businesses Mitsui & Co and Mitsubishi Corp.

Hagiuda reiterated that Japan intends to allow Japanese commercial institutions to retain a share in Sakhalin-2.

“After confirming the details of Russia’s decision, we will have to consider specific measures,” he said.

“The public and private sectors will work together to ensure a stable supply of LNG to Japan,” Hagiuda said. They shared the basic principles of shareholding, and he wanted commercial companies to begin the process of transitioning to the new entity if Russian conditions were met.

Mitsui & Co holds a 12.5% share in Sakhalin-2. Mitsubishi Corp holds 10%.

USD/JPY is likely to edge higher today, running between 136,500 and 133,200, according to USD price technical analysis. Today, I encourage investors to buy at 133,500 and set risk at 130,500 and profit at 135,500.

Analyzed by: Mr. Long Samnang Business Manager of PP Link Securities

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