Ja­panese stocks surge, dol­lar up

The Myanmar Times - - International Business -

TOKYO led most Asian eq­ui­ties higher and the yen fell af­ter Ja­pan’s cen­tral bank ad­justed its stim­u­lus pro­gram, giv­ing mar­kets a healthy start on what has been dubbed “Big Wed­nes­day”.

The Nikkei sprang from neg­a­tive ter­ri­tory to end 1.9 per­cent higher af­ter the Bank of Ja­pan said it would aim to raise govern­ment bond yields as part of its drive to kick­start in­fla­tion.

“BoJ’s de­ci­sion to steepen the yield curve shows they are tak­ing into ac­count the sit­u­a­tion of fi­nan­cial in­sti­tu­tions,” said Takeshi Mi­nami, chief economist at the Nor­inchukin Re­search In­sti­tute.

The dol­lar soared to 102.30 yen from 101.69 yen in the morn­ing and 101.72 in New York, while the euro was at 114.10 yen from 113.50 yen ear­lier.

The an­nounce­ment came at the end of a keenly awaited meet­ing and fol­lows weak read­ings on the econ­omy, which has failed to re­vive de­spite three years of bank and govern­ment stim­u­lus.

Global mar­kets have suf­fered se­vere vo­latil­ity in the weeks lead­ing up to the gath­er­ing, with Fed of­fi­cials, who were also meet­ing yes­ter­day, giv­ing con­tra­dic­tory opin­ions on the need for a rise in in­ter­est rates.

While it is not ex­pected to tighten this month, the pol­icy board’s state­ment will be pored over for clues about its plans for its next meet­ing in De­cem­ber, or Jan­uary.

Pre­dic­tions of tight­en­ing US rates and a lack of re­cent eas­ing from other cen­tral banks have fu­elled de­bate that the age of easy money – which has helped fuel a rally on global mar­kets – could be end­ing. This has sparked fears of a painful cor­rec­tion.

The Bank of Ja­pan de­ci­sion was be­ing care­fully watched on Asian trad­ing floors, where Hong Kong re­bounded from early losses to sit 0.8pc higher in the af­ter­noon and Shang­hai ended up 0.1pc. Syd­ney added 0.7pc and Seoul gained 0.5pc, while Taipei put on 0.7pc.

How­ever, Sin­ga­pore and Welling­ton were slightly lower.

Oil prices climbed for a sec­ond day as traders await the re­lease of US stock­piles data, while also hav­ing one eye on next week’s meet­ing of top pro­duc­ers that will dis­cuss a global sup­ply glut and over­pro­duc­tion.

West Texas In­ter­me­di­ate for Novem­ber de­liv­ery was 91 cents higher at US$44.96 and Brent was up 72 cents at $46.60.

News that Libya had fi­nally shipped its first cargo of crude since 2014 from its Ras Lanouf port had lit­tle im­me­di­ate ef­fect on prices. The ship­ment was meant to have left on Septem­ber 18 but was de­layed by un­rest.

“The amount of oil com­ing out of Libya is fairly lim­ited so it won’t have a ma­te­rial im­pact on crude prices to­day,” OANDA se­nior mar­ket an­a­lyst Jef­frey Hal­ley told AFP.

Ja­pan pub­lished weak trade fig­ures yes­ter­day that un­der­lined the strug­gles fac­ing BoJ chief Haruhiko Kuroda.

“I think the pos­i­tive re­ac­tion [to the BoJ de­ci­sion] will be short-lived,” said Daisuke Uno, chief mar­ket strate­gist at Su­mit­omo Mit­sui Bank.

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