Australia’s S&P/ASX 200 Index added 0.7 per cent as of 8:42 a.m. Tokyo time in a second day of gains, with energy and telephone shares climbing at least 1.8 per cent. New Zealand’s S&P/NZX 50 Index also rose 0.7 per cent.
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What these powerful central banks say and do could move markets as stimulus measures and interest rate levels still play a key role in pricing financial assets in a world still struggling with sub-par economic growth and inflation below the 2% level central banks view as healthy.
In Japan, Nikkei 225 Stock Average futures were bid for 17,050 in the Osaka pre-market, from 16,850 at their close on Friday, while yen-denominated contracts traded in Chicago dropped 0.2 per cent to 17,025.
TOKYO/SYDNEY, March 14 The dollar steadied against the euro and yen on Monday following last week’s large swings, as the market braced for Japanese and USA central bank policy meetings that could provide investors with fresh incentive.
As widely expected, the central bank maintained its pledge to increase base money at an annual pace of 80 trillion yen (S$971 billion).
“Consumer sentiment is worsening even after the adoption of negative rates and downside risks are heightening not just for prices but for the economy as a whole”, said Mari Iwashita, chief market economist at SMBC Friend Securities. The dollar held largely unchanged against the yen as the Bank of Japan kicked off a two-day policy meeting. In contrast, the Fed hiked short-term rates for the first time in almost a decade back in December and are contemplating further rate hikes this year amid an improving US job market and economy.
In China, the blue-chip CSI300 index rose 1.9%, while the Shanghai Composite Index gained 2%, after both had lost more than 2% last week.
Other upbeat data showed fourth quarter US GDP was revised higher.
The yield on 10-year US Treasuries rose to 1.985 per cent, the highest since late January.
The BOJ also chose to exempt money reserve funds (MRFs) from the minus 0.1 per cent rate and instead apply a rate of zero starting in May.
On risks moving forward, the board cited “uncertainties surrounding emerging and commodity-exporting economies, particularly China” along with “developments in the USA economy and the influences of its monetary policy response to them on the global financial markets”. US crude stockpiles continue to rise and Iran is seen showing little interest in joining major producers in freezing production.
There are also interest rate decisions from the Swiss National Bank, the Australian and Norwegian central banks this week along with the Bank of England.
The euro added 0.1 per cent to $1.1159, well above last week’s low of $1.0821 plumbed after the ECB’s stimulus expansion.
West Texas Intermediate crude fell 0.3 per cent to US$37.06 a barrel, extending Monday’s 3.4 per cent slide.
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Elsewhere, the benchmark indexes in India, Indonesia, Singapore and Taiwan were up between half a percent and 1.2 percent while Malaysian shares were marginally higher.
