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Futures Rebound Back Near All Time Highs, Precious Metals Bounce After Crash

Futures Rebound Back Near All Time Highs, Precious Metals Bounce After Crash

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Futures Rebound Back Near All Time Highs, Precious Metals Bounce After Crash Tyler Durden Wed, 08/12/2020 - 08:08

Reversing yesterday's sharp Nasdaq and precious metals-led selloff, S&P futures rebounded from Tuesday’s drop ignoring the continuing deadlock in Washington on more stimulus spending which could significantly delay the U.S. virus rescue package, and pushing the Emini to within inches of the all time high.

Energy stocks Exxon Mobil gained 1.1% and Chevron Corp added 1.5% in premarket trading, alongside gains in ConocoPhillips, Marathon Oil Corp. and other oil drillers all of which rose pre-market as crude futures approached a five-month high. Nasdaq 100 contracts also climbed after the index dropped for three days, an unheard of event. Tesla rose 5.7% as it announced a five-for-one stock split in an attempt to make its shares more accessible to employees and investors. The fact that a stock split has added billions to a company's market cap just shows how broken everything in this "market" truly is.

On Tuesday, the S&P 500 Index fell for the first time in eight sessions after the benchmark index came within 0.15% of its closing record high, powered by historic fiscal and monetary stimulus and signs of a nascent economic recovery, and sparking speculation that a rotation out of the tech stocks may happen soon.

“The bias at moment is probably to fade the S&P 500 and fade risk generally,” said Societe Generale strategist Kit Juckes. “What happens next probably depends on what happens in U.S. equity markets (which are focused on stimulus)... That might be the decisive factor for short-term sentiment."

Barring a bipartisan deal on stimulus, the U.S. economy could be left with measures U.S. President Donald Trump called for on Saturday through executive orders to bypass Congress.

“We have enormous uncertainty. It appears it’s getting harder for both sides to compromise as the election is nearing... Trump’s proposals would be smaller than markets have expected. There’s question over whether they are viable, too,” said Junpei Tanaka, strategist at Pictet.

Europe’s Stoxx 600 Index edged up thanks to gains in telecom and bank shares. Advances in ABN Amro Bank NV and HSBC Holdings Plc and drugmakers Novartis AG and GlaxoSmithKline Plc offset declines in tech, aviation and real estate shares. Elsewhere, Europe’s corporate bond spreads narrowed to their tightest since early March, just a few basis points off pre-virus levels, according to a Bloomberg Barclays index.

Earlier in the session, mixed sentiment dragged on Asian stocks as sniping continued between China and the United States. Beijing also reported weaker-than-expected loan growth, while the U.S. Senate’s majority leader described stimulus talks there overnight as “at a bit of a stalemate”.

Investors are weighing whether a rotation in equities is playing out as pandemic high-flyers including AMD and Zoom Video tumbled on Tuesday. There’s some portfolio switching “given the constant flurry of concerns about crowded positioning and stretched valuations in growth sectors such as tech and communication services,” said Matthew Sherwood, head of investment strategy for multi-asset at Perpetual Investment. “Value and cyclicals continue to be supported by positive economic surprise momentum.”

With a better-than-feared (but still down over 30% Y/Y) second-quarter earnings season largely over, attention will turn to the upcoming U.S. presidential elections. Democratic candidate Joe Biden on Tuesday picked Senator Kamala Harris as his choice for vice president.

In FX, the Bloomberg Dollar Spot Index was unchanged after earlier declining for the first time in four days, which the euro reversed an early decline to rise for a second day. The Norwegian krone and the Swedish krona led gains among Group-of-10 currencies as oil and regional equities advanced. NZD/USD fell for a fourth day, sliding as much as 0.8%, as the Reserve Bank of New Zealand boosted its Large Scale Asset Program to as much as NZ$100 billion ($65 billion) and said negative rates remained in "active preparation." Turkey’s volatile lira took another 1.5% pounding as concerns about its economic health and policy making took hold again, while New Zealand dollar’s dropped 0.4% after its central bank signalled it would stay highly supportive.

In rates, U.S. Treasuries yield climbed a couple of basis points to 0.67% in Europe to stay at a one-month high. The 10-year yield (+6.6bps) and 30-year (+7.5bps) yields saw their biggest increases in over a month on Tuesday, while the 2s10s curve steepened 4.6 basis points, the most since June 5th. The gap between U.S. two-year and 10-year Treasury yields is a metric closely watched for signs of a slowdown. On Wednesday, yields were cheaper by 1bp to 4bp across the curve with 20-year sector faring worst; long-end underperformance steepens 2s10s by more than 2bp to 51.3bp, 5s30s to 106.8bp, both highest since early July. 10-year yield at 0.671% is highest since July 7 and above its 50- and 100-DMAs. In Europe, bunds lagged by 1bp while 30-year German bond yield turns positive for first time since July. Refunding auctions resume with $38b 10-year at 1pm ET, conclude with $26b 30-year Thursday, both all-time high sizes. The WI 10-year yield ~0.69% is cheaper than July’s record low stop at 0.653%, which was ~1bp lower than WI yield at the bidding deadline.

In commodities, oil prices edged up after bigger-than-expected drop in U.S. inventories, with Brent up 0.6% at $44.75 a barrel. U.S. crude was up 0.5% at $41.80. Silver halted its selloff with gold, as investors decided the flight from precious metals amid advancing bond yields had gone too far.

Expected data include inflation. Royalty Pharma, Cisco, Lyft and Trulieve Cannabis are among companies reporting earnings

Market Snapshot

  • S&P 500 futures up 0.7% to 3,352.75
  • STOXX Europe 600 up 0.1% to 371.20
  • MXAP up 0.2% to 169.90
  • MXAPJ down 0.09% to 561.67
  • Nikkei up 0.4% to 22,843.96
  • Topix up 1.2% to 1,605.53
  • Hang Seng Index up 1.4% to 25,244.02
  • Shanghai Composite down 0.6% to 3,319.27
  • Sensex down 0.1% to 38,351.33
  • Australia S&P/ASX 200 down 0.1
  • German 10Y yield rose 3.0 bps to -0.448%
  • Euro up 0.1% to $1.1755
  • Italian 10Y yield rose 2.2 bps to 0.817%
  • Spanish 10Y yield rose 2.1 bps to 0.3%
  • Brent futures up 1% to $44.95/bbl
  • Gold spot up 1.2% to $1,934.56
  • U.S. Dollar Index little changed at 93.60

Top Overnight News from Bloomberg

  • The U.K. suffered the worst economic downturn in Europe, with a 20.4% contraction in the second quarter, pushing the country in its first recession since 2009
  • China is to bring up the recent measures brought by President Donald Trump against the WeChat and TikTok apps during upcoming trade talks with the U.S. this week. The trade review, for which an exact date hasn’t been released yet, comes in a context of growing hostility between the two superpowers
  • California reported a surge in coronavirus cases, nations in Asia are struggling to contain new waves of infections, and European countries report new increases, a reminder that the battle against the virus is far from over. But there are encouraging vaccine news, including Russian President Vladimir Putin’s announcement that his government has cleared the first Covid vaccine before clinical tests are finished

A quick look at global markets courtesy of RanSquawk:

Asian equity markets traded with a lacklustre tone following on from a weak lead from US where the major indices faltered in late trade after comments from US Senate Majority Leader McConnell dashed some stimulus hopes and saw the S&P 500 retrace its earlier gains which had initially pushed the index to within 1% of its all-time high. ASX 200 (-0.1%) was subdued with underperformance seen in gold miners following the aggressive pullback in the precious metal which retreated firmly below the USD 2000/oz level. Furthermore, nearly all its sectors languished in the red aside from financials which showed some resilience despite CBA posting an 11.3% decline in FY cash profits, while recent data releases contributed to the dampened mood after a further deterioration in Westpac Consumer Sentiment and with Wage Growth at its slowest pace in 27 years. Nikkei 225 (+0.4%) was choppy as participants digested earnings including SoftBank which was pressured following a drop in Q1 pre-tax profits, and NZX 50 (-1.3%) suffered from lockdown restrictions following reports of the country’s first COVID-19 cases after having gone 102 days without any locally-transmitted spread of the virus, although some of the losses were stemmed following the RBNZ announcement to expand its QE program. Elsewhere, Hang Seng (+1.4%) and Shanghai Comp. (-0.6%) initially conformed to the glum mood despite a strong liquidity effort by the PBoC which injected CNY 140bln through 7-day reverse repos as participants also react to weaker than expected lending data from China and as US-China tensions lingered. Finally, 10yr JGBs are weaker in the aftermath of yesterday’s extended retreat and following recent losses in T-notes, while participants were also kept sidelined amid the enhanced liquidity auction for longer dated JGBs which attracted weaker interest than prior.

Top Asian News

  • Abu Dhabi Is Said to Seek Local Investors for Gas Pipelines
  • Alibaba-Backed Best to List Delivery Business in H.K.: Reuters
  • Softbank-Backed KE Poised to Raise $2.1 Billion in U.S. IPO
  • Singapore Regulator Warns of More Bank Job Losses in Second Half

European equities trade flat/firmer after an uninspiring cash open [Euro Stoxx 50 +0.1%] as sentiment somewhat improved from a downbeat APAC handover. News flow has again been light in early hours with little by way of fresh fundamental catalysts to shift the dials. That being said, the DAX (-0.2%) holds its position as the laggard as heavyweight SAP (-0.9%) fails to trim losses amid the broad tech underperformance seen Wall St and Asia-Pac, whilst the FTSE 100 (+0.6%) trades on the other side of the spectrum bolstered by its heavy energy and financials exposure. Sectors are mixed with no clear risk profile to be derived, with the breakdown seeing banking names among the gainers after ABN AMRO (+5.3%) reported lower than expected loan loss provisions whilst Q2 operating income was more-or-less in-line with forecasts. The energy sector meanwhile is propped up by price action in the oil complex, whilst Travel & Leisure remains pressured amid fears of the impact of resurging cases in the sector. In terms of individual movers, Sunrise Communications (+26%) soared at the open and held onto gains as Liberty is to acquire Co. for CHF 110/shr for a total of CHF 6.8bln. Note, shares closed at CHF 86.20 yesterday. E.ON (-1.6%) remains in the red after cutting its FY adj. net guidance and EBIT guidance. Asos (+4.6%) remains firmer, albeit off highs, after the group noted that profit before tax for the FY is expected to be significantly ahead of market forecasts.

Top European News

  • M&G Commits to Dividend in Face of Retail Investor Fund Exodus
  • ABN Amro Cuts a Third of Investment Bank After Virus Losses
  • Just Eat Takeaway’s 1H Orders Jumped 32% During Pandemic

In FX, the Kiwi has fallen further from recent highs on renewed 2nd wave pandemic concerns following an outbreak in Auckland and reports that up to 4 more people may have contracted the virus, while latest negative OCR vibes via the RBNZ have also undermined sentiment more so than the LSAP extension and increase to Nzd 100 bn from Nzd 60 bn that was widely expected. Nzd/Usd is now hovering below 0.6550 and Aud/Nzd fading from 1.0900+ peaks overnight, as the Aussie drifts back towards 0.7100 in wake of Westpac’s August consumer sentiment showing a downturn in morale and Q2 wages sub-consensus for the weakest y/y rate of growth in 27 years.

  • USD - More real yield appreciation and associated GOLD depreciation (Xau down through Usd 1900/oz at one stage) boosted the Buck across the board, with the DXY hitting 93.909 before waning ahead of 94.000 and last week’s 93.997 apex after a late swoon on Wall Street amidst the ongoing fiscal relief stalemate. Ahead, US CPI comes hot on the heels of firmer than forecast PPI reads, but unlikely to impact much in the current less data-centric mood.
  • JPY - Another victim of relative Dollar strength and US Treasury curve concessions for Quarterly Refunding, as Usd/Jpy shifts into a loftier range in the upper 106.00 region and Eur/Jpy rebounds from just shy of 125.00 to around 125.55.
  • SEK/NOK/CHF/EUR/GBP/CAD - The tide has turned somewhat in Scandinavia where the Swedish Crown has been inflated by firmer CPI prints to an extent, while the Norwegian Krona has lost momentum alongside crude prices, but both are still outperforming vs the Euro circa 10.2600 and 10.5500 respectively as the single currency tops out against the Greenback following unsuccessful attempts to clear 1.1800 and the 200 HMA near the round number. Elsewhere, the Franc is paring declines from 0.9200, but respecting resistance at 0.9150 and Sterling has recoiled from 1.3100+ on Tuesday to test support into 1.3000, largely shrugging off not quite as bad as feared, though still pretty abject UK GDP along the way. Similarly, the Loonie handed back more gains vs its US counterpart as oil slipped and broad risk sentiment/appetite dipped before bouncing circa 1.3350.
  • EM - Payback after yesterday’s strong recovery rallies, and perhaps a few signs of Cny/Cnh caution in the run up to Saturday’s US-Sino Summit as China’s Foreign Ministry warns against the danger of playing with fire in reference to US Health Chief Azar’s trip to Taiwan.

In commodities, WTI and Brent futures eke mild gains in early trade with prices supported by the larger-than-expected draw in private crude inventories (-4.4mln vs. Exp. -3.1mln), whilst EIA’s STEO also provided a bullish outlook, with 2020 and 2021 world oil demand forecast upgraded by 40k BPD and 30k BPD respectively, whilst also lowering 2020 US production forecasts by 370k from the prior report. Aside from that, news flow has been scarce, WTI September meanders on either side of USD 42/bbl (vs. low USD 41.53/bbl) whilst its Brent October counterpart briefly rose above USD 45/bbl after printing a base at USD 44.49/bbl. Elsewhere, precious metals see gains in what seems to be a consolidation from yesterday’s dire losses, spot gold tested USD 1950/oz to the upside (vs. low 1863/oz) before coming off highs, and spot silver briefly reclaimed a USD 26/oz handle from a sub-25/oz base.  Meanwhile, due to price fluctuations, the Shanghai Gold Exchange said it will increase margin requirements for gold contracts to 12% from 9%, trading limit to be raised to 11% from 8%, whilst margin requirements for silver contracts will also be raised to 16% from 13%, trading limit to be raised to 12% from 15%. In terms of base metals, Shanghai copper declined in tandem with Chinese stocks in the run-up to US-China meeting, whilst the stalemate on US fiscal stimulus added to the downbeat tone overnight. Dalian iron ore prices retreated overnight after the China Iron and Steel Association predicted iron ore discharging difficulties and port congestion issues are seen easing later this month.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -5.1%
  • 8:30am: US CPI MoM, est. 0.3%, prior 0.6%; US CPI Ex Food and Energy MoM, est. 0.2%, prior 0.2%
  • 8:30am: US CPI YoY, est. 0.7%, prior 0.6%; CPI Ex Food and Energy YoY, est. 1.1%, prior 1.2%
  • 8:30am: Real Avg Weekly Earnings YoY, prior 4.6%; Real Avg Hourly Earning YoY, prior 4.3%
  • 2pm: Monthly Budget Statement, est. $137.5b deficit, prior $119.7b deficit

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Four burning questions about the future of the $16.5B Novo-Catalent deal

To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.
Beyond spending billions of dollars to expand…

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To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.

Beyond spending billions of dollars to expand its own production capacity for its weight loss drugs, the Danish drugmaker said Monday it will pay $11 billion to acquire three manufacturing plants from Catalent. It’s part of a broader $16.5 billion deal with Novo Holdings, the investment arm of the pharma’s parent group, which agreed to acquire the contract manufacturer and take it private.

It’s a big deal for all parties, with potential ripple effects across the biotech ecosystem. Here’s a look at some of the most pressing questions to watch after Monday’s announcement.

Why did Novo do this?

Novo Holdings isn’t the most obvious buyer for Catalent, particularly after last year’s on-and-off M&A interest from the serial acquirer Danaher. But the deal could benefit both Novo Holdings and Novo Nordisk.

Novo Nordisk’s biggest challenge has been simply making enough of the weight loss drug Wegovy and diabetes therapy Ozempic. On last week’s earnings call, Novo Nordisk CEO Lars Fruergaard Jørgensen said the company isn’t constrained by capital in its efforts to boost manufacturing. Rather, the main challenge is the limited amount of capabilities out there, he said.

“Most pharmaceutical companies in the world would be shopping among the same manufacturers,” he said. “There’s not an unlimited amount of machinery and people to build it.”

While Novo was already one of Catalent’s major customers, the manufacturer has been hamstrung by its own balance sheet. With roughly $5 billion in debt on its books, it’s had to juggle paying down debt with sufficiently investing in its facilities. That’s been particularly challenging in keeping pace with soaring demand for GLP-1 drugs.

Novo, on the other hand, has the balance sheet to funnel as much money as needed into the plants in Italy, Belgium, and Indiana. It’s also struggled to make enough of its popular GLP-1 drugs to meet their soaring demand, with documented shortages of both Ozempic and Wegovy.

The impact won’t be immediate. The parties expect the deal to close near the end of 2024. Novo Nordisk said it expects the three new sites to “gradually increase Novo Nordisk’s filling capacity from 2026 and onwards.”

As for the rest of Catalent — nearly 50 other sites employing thousands of workers — Novo Holdings will take control. The group previously acquired Altasciences in 2021 and Ritedose in 2022, so the Catalent deal builds on a core investing interest in biopharma services, Novo Holdings CEO Kasim Kutay told Endpoints News.

Kasim Kutay

When asked about possible site closures or layoffs, Kutay said the team hasn’t thought about that.

“That’s not our track record. Our track record is to invest in quality businesses and help them grow,” he said. “There’s always stuff to do with any asset you own, but we haven’t bought this company to do some of the stuff you’re talking about.”

What does it mean for Catalent’s customers? 

Until the deal closes, Catalent will operate as a standalone business. After it closes, Novo Nordisk said it will honor its customer obligations at the three sites, a spokesperson said. But they didn’t answer a question about what happens when those contracts expire.

The wrinkle is the long-term future of the three plants that Novo Nordisk is paying for. Those sites don’t exclusively pump out Wegovy, but that could be the logical long-term aim for the Danish drugmaker.

The ideal scenario is that pricing and timelines remain the same for customers, said Nicole Paulk, CEO of the gene therapy startup Siren Biotechnology.

Nicole Paulk

“The name of the group that you’re going to send your check to is now going to be Novo Holdings instead of Catalent, but otherwise everything remains the same,” Paulk told Endpoints. “That’s the best-case scenario.”

In a worst case, Paulk said she feared the new owners could wind up closing sites or laying off Catalent groups. That could create some uncertainty for customers looking for a long-term manufacturing partner.

Are shareholders and regulators happy? 

The pandemic was a wild ride for Catalent’s stock, with shares surging from about $40 to $140 and then crashing back to earth. The $63.50 share price for the takeover is a happy ending depending on the investor.

On that point, the investing giant Elliott Investment Management is satisfied. Marc Steinberg, a partner at Elliott, called the agreement “an outstanding outcome” that “clearly maximizes value for Catalent stockholders” in a statement.

Elliott helped kick off a strategic review last August that culminated in the sale agreement. Compared to Catalent’s stock price before that review started, the deal pays a nearly 40% premium.

Alessandro Maselli

But this is hardly a victory lap for CEO Alessandro Maselli, who took over in July 2022 when Catalent’s stock price was north of $100. Novo’s takeover is a tacit acknowledgment that Maselli could never fully right the ship, as operational problems plagued the company throughout 2023 while it was limited by its debt.

Additional regulatory filings in the next few weeks could give insight into just how competitive the sale process was. William Blair analysts said they don’t expect a competing bidder “given the organic investments already being pursued at other leading CDMOs and the breadth and scale of Catalent’s operations.”

The Blair analysts also noted the companies likely “expect to spend some time educating relevant government agencies” about the deal, given the lengthy closing timeline. Given Novo Nordisk’s ascent — it’s now one of Europe’s most valuable companies — paired with the limited number of large contract manufacturers, antitrust regulators could be interested in taking a close look.

Are Catalent’s problems finally a thing of the past?

Catalent ran into a mix of financial and operational problems over the past year that played no small part in attracting the interest of an activist like Elliott.

Now with a deal in place, how quickly can Novo rectify those problems? Some of the challenges were driven by the demands of being a publicly traded company, like failing to meet investors’ revenue expectations or even filing earnings reports on time.

But Catalent also struggled with its business at times, with a range of manufacturing delays, inspection reports and occasionally writing down acquisitions that didn’t pan out. Novo’s deep pockets will go a long way to a turnaround, but only the future will tell if all these issues are fixed.

Kutay said his team is excited by the opportunity and was satisfied with the due diligence it did on the company.

“We believe we’re buying a strong company with a good management team and good prospects,” Kutay said. “If that wasn’t the case, I don’t think we’d be here.”

Amber Tong and Reynald Castañeda contributed reporting.

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Petrina Kamya, Ph.D., Head of AI Platforms at Insilico Medicine, presents at BIO CEO & Investor Conference

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb….

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Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

Credit: Insilico Medicine

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

The session will look at how the latest artificial intelligence (AI) tools – including generative AI and large language models – are currently being used to advance the discovery and design of new drugs, and which technologies are still in development. 

The BIO CEO & Investor Conference brings together over 1,000 attendees and more than 700 companies across industry and institutional investment to discuss the future investment landscape of biotechnology. Sessions focus on topics such as therapeutic advancements, market outlook, and policy priorities.

Insilico Medicine is a leading, clinical stage AI-driven drug discovery company that has raised over $400m in investments since it was founded in 2014. Dr. Kamya leads the development of the Company’s end-to-end generative AI platform, Pharma.AI from Insilico’s AI R&D Center in Montreal. Using modern machine learning techniques in the context of chemistry and biology, the platform has driven the discovery and design of 30+ new therapies, with five in clinical stages – for cancer, fibrosis, inflammatory bowel disease (IBD), and COVID-19. The Company’s lead drug, for the chronic, rare lung condition idiopathic pulmonary fibrosis, is the first AI-designed drug for an AI-discovered target to reach Phase II clinical trials with patients. Nine of the top 20 pharmaceutical companies have used Insilico’s AI platform to advance their programs, and the Company has a number of major strategic licensing deals around its AI-designed therapeutic assets, including with Sanofi, Exelixis and Menarini. 

 

About Insilico Medicine

Insilico Medicine, a global clinical stage biotechnology company powered by generative AI, is connecting biology, chemistry, and clinical trials analysis using next-generation AI systems. The company has developed AI platforms that utilize deep generative models, reinforcement learning, transformers, and other modern machine learning techniques for novel target discovery and the generation of novel molecular structures with desired properties. Insilico Medicine is developing breakthrough solutions to discover and develop innovative drugs for cancer, fibrosis, immunity, central nervous system diseases, infectious diseases, autoimmune diseases, and aging-related diseases. www.insilico.com 


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Another country is getting ready to launch a visa for digital nomads

Early reports are saying Japan will soon have a digital nomad visa for high-earning foreigners.

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Over the last decade, the explosion of remote work that came as a result of improved technology and the pandemic has allowed an increasing number of people to become digital nomads. 

When looked at more broadly as anyone not required to come into a fixed office but instead moves between different locations such as the home and the coffee shop, the latest estimate shows that there were more than 35 million such workers in the world by the end of 2023 while over half of those come from the United States.

Related: There is a new list of cities that are best for digital nomads

While remote work has also allowed many to move to cheaper places and travel around the world while still bringing in income, working outside of one's home country requires either dual citizenship or work authorization — the global shift toward remote work has pushed many countries to launch specific digital nomad visas to boost their economies and bring in new residents.

Japan is a very popular destination for U.S. tourists. 

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This popular vacation destination will soon have a nomad visa

Spain, Portugal, Indonesia, Malaysia, Costa Rica, Brazil, Latvia and Malta are some of the countries currently offering specific visas for foreigners who want to live there while bringing in income from abroad.

More Travel:

With the exception of a few, Asian countries generally have stricter immigration laws and were much slower to launch these types of visas that some of the countries with weaker economies had as far back as 2015. As first reported by the Japan Times, the country's Immigration Services Agency ended up making the leap toward a visa for those who can earn more than ¥10 million ($68,300 USD) with income from another country.

The Japanese government has not yet worked out the specifics of how long the visa will be valid for or how much it will cost — public comment on the proposal is being accepted throughout next week. 

That said, early reports say the visa will be shorter than the typical digital nomad option that allows foreigners to live in a country for several years. The visa will reportedly be valid for six months or slightly longer but still no more than a year — along with the ability to work, this allows some to stay beyond the 90-day tourist period typically afforded to those from countries with visa-free agreements.

'Not be given a residence card of residence certificate'

While one will be able to reapply for the visa after the time runs out, this can only be done by exiting the country and being away for six months before coming back again — becoming a permanent resident on the pathway to citizenship is an entirely different process with much more strict requirements.

"Those living in Japan with the digital nomad visa will not be given a residence card or a residence certificate, which provide access to certain government benefits," reports the news outlet. "The visa cannot be renewed and must be reapplied for, with this only possible six months after leaving the countr

The visa will reportedly start in March and also allow holders to bring their spouses and families with them. To start using the visa, holders will also need to purchase private health insurance from their home country while taxes on any money one earns will also need to be paid through one's home country.

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