Asian stocks rose toward their highest closing level since November as expectations for a stimulus package lifted Japanese shares and better-than-anticipated corporate earnings in the US eased concerns over global growth.
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The European Central Bank will meet later in the session, and is expected to hold policy steady while perhaps addressing a scarcity of bonds for its 1.7 trillion euro stimulus programme. Comments by the Bank of Japan governor ruling out “helicopter money” for the tepid economy also cast a chill.
Nintendo, which had more than doubled since the game’s launch this month, rose 0.84 percent to 28,000 yen.
KEEPING SCORE: France’s CAC 40 was down 0.4 percent at 4,362 while Germany’s DAX was 0.1 percent lower at 10,133.
Intel, the world’s largest chipmaker, led Wall Street lower on Thursday after it reported slower revenue growth at its data centre business. USA shares were also set to drift slightly lower with Dow and S&P 500 futures both down 0.1 percent.
At this stage there is “no need and no possibility for helicopter money”, Kuroda said in a BBC Radio 4 program that was aired Thursday and that the broadcaster said was recorded on June 17.
Tokyo stocks bounced back as the USA dollar strengthened to the lower 107 yen zone from the lower 106 yen range Wednesday afternoon. Market heavyweights, like major exporters, suffer when the yen’s value rises.
ANALYST QUOTE: “Global stocks have enjoyed an extended period of gains which have been fuelled by optimism over central banks intervening to quell the financial turmoil”, said Lukman Otunuga, research analyst at FXTM.
“We have better corporate earnings, likely bold fiscal stimulus in Japan, zero interest rates helping to absorb every macro shock we hear about and broad monetary easing”, said Chris Weston, chief market strategist at IG Ltd.in Melbourne. A big drop in business activity in the United Kingdom raised expectations of more central bank stimulus there. Add more stimulus? Don’t add more stimulus? “And they chose to stick to a safer option – wait and see”.
ASIA’S DAY: Earlier, Japan’s benchmark Nikkei 225 index added 1.4 percent to end at 16,723.31 as the market had a delayed reaction to the yen’s weakness after it reopened following a holiday.
Futures on the FTSE China A50 Index and Hong Kong’s Hang Seng Index dropped 0.3 percent before markets opened in China.
In share trading, McDonald’s Japan rose 5.26 percent to 3,700 yen on the firm’s announcement late Wednesday that it was collaborating with developers of the Pokemon Go game ahead of its rollout in Japan. Dow and S&P futures were both up 0.2 percent.
The Standard & Poor’s 500 index was basically flat at 2,173 at 10:05 a.m.
“Markets had built up some positive expectations from (the Bank of Japan) and ECB”, said Khiem Do, head of Asian Multi Asset at Baring Asset Management.
OIL: U.S. crude shed 6 cents to $44.69 in NY. Brent crude, the worldwide benchmark, rose 18 cents to $47.35 a barrel.
The pound fell almost two cents to $1.31 GBP=, back to within a couple of cents of the 31-year low struck earlier this month following the June 23 European Union referendum.
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The euro rose slightly to 1.1034 from 1.1015, while the dollar rose to 107.23 yen from 106.01 yen.
