Japan to implement a Y10.3tn stimulus package
The new Prime Minster, Shinzo Abe unveiled a Y10.3tn ($116bn) package to stimulate the economy.
The Prime Minister would also indicated that the candidate to replace the outgoing Bank of Japan Governor must focus on job creation, in a clear sign that further monetary expansion is expected from the BoJ this year.
Precious metals such as gold and silver that serve as store of value assets are likely to benefit from further debasement of the yen. [Currency ETFs: Everyone Hates the Japanese Yen]
Chinese vehicle sales improve, providing a boost to palladium demand
Vehicle sales rose 4.3% in 2012, up from 2.5% in 2011. The China Association of Automobile Manufacturers expects sales to rise 7% in 2013.
While the improvement does not match the double-digit growth seen in 2009 and 2010, the steady improvement is consistent with a soft-landing of the Chinese economy. Palladium is a key component of autocatalysts used in the gasoline-engine dominated auto markets of the US and China. With both US and China growth showing signs of recovery, palladium demand will likely benefit.
Key events to watch this week
Chinese Q4 GDP numbers will help confirm if a hard-landing was averted.
US industrial production data will be closely watched to see if the rebound has maintained momentum.