“We will monitor the developments in the currency market carefully and will respond appropriately when necessary”, Aso also said, while refusing to comment directly on mounting speculation that the ministry may intervene in the currency market to halt the yen’s rapid rise.
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NEW YORK – Global equities teetered on the precipice of a bear market, as USA shares staged an afternoon comeback on Thursday to trim losses that surpassed 2% amid growing concern that central banks would not be able to boost growth. J.P. Morgan’s chief Japan economist, Masaaki Kanno, said he anticipated the Bank of Japan would cut its policy rate in March or sooner, to negative 0.5% from the current minus 0.1%, plus increase Japanese government-bond purchases.
Mainland Chinese stock markets have been closed all week for the Lunar New Year holiday.
Elsewhere Friday, shares eased off their lows of the day, but largely remained in the red.
Hong Kong fell one percent after a near four percent fall Thursday, Sydney shed 0.9 percent, Seoul was 1.4 percent lower and Wellington eased more than one percent. JX Holdings fell 4.28 percent to 424.2 yen. South Korea’s small-cap Kosdaq index ended more than seven percent lower, having been suspended briefly during the session when it dived eight percent.
Major Asian stock markets sank as investors continued to dump riskier assets.
Concerns that the upheaval that has wracked world markets will now seep into the USA economy, the world’s biggest, is adding to selling and financial stocks – particularly banks – are coming under intense pressure.
The efforts to devalue the Japanese Yen have proved to be futile after the Yen’s strength pressed it up 3% lower the level it was trading at in October 2014. Speaking later after a regular meeting with Prime Minister Shinzo Abe, Kuroda said he would watch market moves closely. “Of course, that is not at all what the Bank of Japan had hoped to achieve”.
The yen and government bonds tend to appreciate in times of economic uncertainty.
Investors ignored a second day of testimony from Federal Reserve Chair Janet Yellen, whose indication that the central bank won’t rush to raise US benchmark interest rates in the face of global market turmoil failed to stem a selloff in risk assets from bank shares to crude oil and emerging-market currencies.
Only six weeks ago cheap oil was still expected to cushion the outlook for growth, but tumbling energy prices are upending the economies of oil-producing countries.
ENERGY: Benchmark U.S. crude was up $1.45, or 5.5 percent, to $27.66 a barrel in electronic trading in NY. It last stood at $1,237.5.
While there are worries that the world is headed for a systemic banking crisis, the performance of financial stocks Friday morning in Asia suggests skittishness was contained. In Australia, financial stocks fared a tad worse than the overall market, down by 1.2%.
The global stock rout rolled across Asia on Friday. Casio Computer 6952, -10.33% was down 7.9% while J. Front Retailing 3086, -8.27% fell 7.6%.
Shares in Japanese financial institutions led Friday’s losses.
KEEPING SCORE: The Dow Jones industrial average rose 121 points, or 0.8 percent, to 15,781 as of 10:10 a.m. Eastern Time. The Standard & Poor’s 500 lost 22.78 points, or 1.2 percent, to 1,829.08 and the Nasdaq composite fell 16.76 points, or 0.4 percent, to 4,266.84. The Stoxx Europe 600 fell 3.7% to its lowest close since 2013, and the U.K.’s FTSE 100 closed at its lowest level since July 2012.
“Maybe it splashes into the US, but that’s a big maybe”, he said Thursday.
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Gold futures, another haven, jumped to settle at the highest level in about a year at $1,247.80 a troy ounce overnight, but were last down 1.1% at $1,234.30 in Asia.
