Wells Fargo Bank fell again, by 0.8 percent, amid reports that Federal prosecutors have begun a probe into the its bogus accounts scandal.
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The MSCI Asia Pacific Index rose 0.6 percent to 137.35 as of 3:44 p.m.in Tokyo, halting a six-day run of declines and paring this week’s loss to 2.1 percent.
Both central banks will hold policy meetings next week.
Australian shares climbed 1%, and were on track for a weekly decline of 0.9%.
South Korean, Chinese, Taiwanese and Hong Kong markets are closed for holidays.
Market players had thought that bond yields would continue trending downward on the BOJ’s buying spree, but the price movements have been upended now that the rules of the game have changed, according to a source at an overseas-based brokerage. Two said the rates would be lowered to minus 0.3 percent. “Anyone left calling for a September hike next week from the Federal Reserve must be feeling a bit hot under the collar after further signs of economic vulnerabilities”.
“We’ve seen a battle in the yield curve in recent weeks”, said Robert Tipp, chief investment strategist at Prudential fixed income.
The gap between five-year note yields and 30-year bond yields widened to 129.70 basis points, the steepest since June 27.
Households’ inflation expectations are now lower than they were before QQE started, consumer sentiment data show. The single currency was also changing hands at US$1.1225 compared with US$1.1217 in USA trade.
The BOJ is likely to maintain its pledge to hit its 2 percent inflation target “at the earliest date possible”. Brainard said that she wanted to see a stronger trend in US consumer spending and evidence of rising inflation before the Fed raises rates, and that the United States still looked vulnerable to economic weakness overseas.
While the BOJ is widely expected to combine a cut in short-term rates with an attempt to steepen the yield curve, possibly by making its bond buying target more flexible, in its next easing, market players say uncertainty surrounding its policy meeting on Sept 20-21 is unusually large.
NEW JAPANESE FOCUS ON NEGATIVE RATES Japan’s central bank will also meet on Tuesday and Wednesday and present an assessment of its ultra-easy monetary policy.
Most Japanese businesses see the central bank’s aggressive monetary stimulus as achieving its stated goal of spurring inflation, a Reuters poll found, with firms citing negative fallout from the program more than positive effects.
Yesterday, the Swiss National Bank and the Bank of England held interest rates steady.
The Fed has been stirring up markets with rate hike speculation in a big way since late August when key Fed officials said they could raise rates in September. Loose monetary policies of global central banks have benefitted emerging markets such as India over the past few months.
The yen gained 0.2 percent to 101.84 per dollar, putting it up 0.7 percent for the week. The euro was little changed at $1.1240.
It would also be a shift away from the BOJ’s unique monetary experiment that attempted to crush yields across the curve and try to convince the public that its massive money printing will boost economic activity and prices. That followed gains on Thursday of as much as 2.5% as renewed risk appetite stemmed a two-day rout.
Brent crude futures were trading at $46.32 per barrel, down 0.6 percent, from their last settlement. USA crude retreated 0.6 percent to $43.66, poised to end the week down 4.8 percent.
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Sterling added to modest gains made overnight and was last up 0.2 per cent at $1.3266.
