At the same time, opinion is divided on what the Bank of Japan’s intentions are, with expectations for fresh stimulus tempered by a lack of concrete promises from Tokyo, despite weak Japanese growth and nearly non-existent inflation.
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Since investors doubt the Federal Reserve will raise interest rates on Wednesday, they may focus instead on the Fed’s statement and a press conference led by Fed chair Janet Yellen. Energy companies are slipping with the price of oil.
The Dow Jones industrial average gained 43 points, or 0.2 percent, to 18,163 as of 12:15 p.m.
The U.S. 30-year bond yield declined three basis points, or 0.03 percentage point, to 2.43 percent as of 2:05 p.m.in NY, according to Bloomberg Bond Trader data, after falling as low as 2.4 percent.
Overnight, the dollar held steady against the other major currencies in subdued trade on Tuesday, after the release of downbeat US housing sector data as investors remained cautious ahead of the Federal Reserve and Bank of Japan’s policy statements due on Wednesday. The lower the neutral rate forecast, the less anxious the Fed needs to be about tightening policy, which would justify its repeated decisions to defer rate increases. In 2.49pm trading, the Standard & Poor’s 500 Index increased 0.2 per cent. It seems unlikely that the Fed will raise interest rates in September, and the broad consensus is the probability of a rate rise is 20%. Against the dollar, the European unit was steady at $1.1152 EUR=. Its stock added $1.86, or 2.7 percent, to $70.20 and Starwood rose $2.02, or 2.7 percent, to $77.11.
Bond prices rose. The yield on the 10-year U.S. Treasury note fell to 1.69 percent from 1.71 percent.
The dollar rose modestly against the euro but dipped against the yen Tuesday ahead of key central bank meetings in the USA and Japan.
The euro was steady at $1.1177 EUR= , while the dollar index, which tracks the greenback against a basket of six major rivals, was almost flat at 95.845 .DXY .
Ministry of Finance (MOF) data showed on Wednesday that exports fell 9.6 percent in the year to August, dragged down by shipments of cars and steel.
USA stocks ended little changed, with healthcare.SPXHC gains offsetting declines in energy.SPNY.
Nagging doubts about the firepower left available to top central banks have added to volatility in markets recently. Brent crude, used to price worldwide oils, slipped 21 cents to $45.74 a barrel in London.
OVERSEAS: France’s CAC 40 slipped 0.1 percent while Germany’s DAX rose 0.2 percent.
The euro surged 0.7 percent to 114.17 yen after earlier dropping as low as 112.50, its lowest since August 16.
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The same air of caution was seen in other markets in the region: Tokyo slid 0.16 per cent on a stronger yen as it reopened after a holiday while Shanghai eased 0.1 per cent and Hong Kong dipped 0.08 per cent. The U.S. central bank is widely expected to hold interest rates unchanged at 0.25 percent to 0.50 percent, and could hint at a rate hike by the end of the year.
