The report is the most comprehensive indicator of how Japan Inc is faring.
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Expectations of further stimulus in Japan has dominated trading for the past few weeks and eclipsed attention paid to the US central bank’s statement on Wednesday, when the Fed was seen as indicating that a September rate increase was possible, but not necessarily likely.
As Japan’s prime minister promised a greater-than-expected stimulus package on Wednesday, the question has heightened further as to whether the Bank of Japan agrees to lend a hand to the government when its policy members come out of a two-day policy meeting ending this Friday. The decision sparked a rally in the safe-haven Japanese currency that threatened profits at Japan and fanned fears about the already weak economy. It has made session high at 1.3251 and hit low at 1.3151 levels. Slumping oil prices held the gains in check.
Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities, said that the amount is “so large that the stimulus package is bound to have a big economic impact”. The Canadian economic calendar is light until Friday, when gross domestic product data will be released for May. Hong Kong ended 0.4 percent up and Sydney was marginally higher.
But the central bank’s improved mood wasn’t enough to cement expectations that it was gearing up to raise interest rates anytime soon. He repeated Abe’s comments on Wednesday that the stimulus package will be more than 28 trillion yen and that 13 trillion yen of this will be “fiscal measures”.
A spokesperson for the prime minister’s office would not comment when asked about the size of direct spending in the stimulus. Stocks in mainland China also fell but shares in Taiwan, Singapore and Indonesia were stronger.
UK’s benchmark FTSE 100 closed up by 0.
MarketWatch reported insiders saying “Japan is considering issuing 50-year bonds for the first time, the longest maturity of Japanese government debt in the postwar era, to take advantage of the ultra-low rates resulting from the Bank of Japan’s monetary easing”. The S&P 500 .SPX slid 2.6 points, or 0.12 percent, to 2,166.58 and the Nasdaq Composite .IXIC added 29.76 points, or 0.58 percent, to 5,139.81.
“Maybe players are getting too short dollar/yen ahead of this and we may see a reaction higher regardless of the outcome”, he said.
The two-year Treasury yield, which is sensitive to traders’ views on Fed policy, fell 3 basis points to 0.734 percent. It reached 0.778 percent on Tuesday, its highest since Britain’s vote to leave the European Union on June 23.
The euro, which gained 0.7 percent overnight, edged up to a nine-day high of $1.1088 while the Australian dollar, which has been closely tracking the yen recently, was up 0.4 percent at $0.7524.
U.S. West Texas Intermediate (WTI) crude futures settled down $1, or 2.3 percent, at $41.92 a barrel.
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Brent earlier dropped to $43.33, the lowest since May 10. It has underperformed by 1.20% the S&P500. Across the Korean Strait, the Kospi was up 0.15 percent.
