Major currencies came to a standstill on Tuesday as investors look to this week’s policy meetings of the Bank of Japan and Federal Reserve, with speculation rife that the Japanese central bank will make crucial changes to its easing program.
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The yen was weaker today as the Tokyo equity markets were up while investors count down to the BoJ decision and there is optimism that the Bank will take some action at this meeting.
Asian shares were mostly lower Tuesday amid a nervous wait for potential policy moves by the U.S. Federal Reserve and the Bank of Japan. An interest rate hike by the Federal Reserve is most likely to weigh on the strength of United States dollars crosses across the board.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, but it was headed for a loss of 2.4% for the week. Stocks on the Move Shares of Community Health Systems reversed premarket gains after news the struggling hospital operator is exploring a possible sale.
“Investors are holding vigil before the Bank of Japan and the Federal Reserve’s announcements tomorrow and I think everything stays quiet until then”, said Peter Cardillo, chief market economist at First Standard Financial in NY.
Both China’s blue-chip CSI300 index and the Shanghai Composite Index fell 0.1 per cent, to 3,260.11 points and 3,024.08 points, respectively. The Nasdaq composite picked up 12 points, or 0.2 percent, to 5,246.
“Investors have become more comfortable knowing that a Fed rate hike decision will be put off until future meetings, but there is more uncertainty with what Japan will do”, said Paul Springmeyer, investment managing director at the Private Client Group, U.S. Bank in Minneapolis, Minnesota. Its stock added $1.54, or 2.3 percent, to $69.88 and Starwood rose $1.76, or 2.3 percent, to $76.85.
Facebook edged 0.68 percent higher to $129.95 after Citigroup raised its price target.
Wells Fargo rose 2.15 percent and was the top influence on the S&P after Morgan Stanley upgraded the bank’s stock to “overweight”. Its stock gave up 61 cents, or 4.8 percent, to $12.09.
Japan’s Nikkei stock index .N225 shed 0.5 percent, as trading resumed after a public holiday on Monday.
This would likely result in a rise in yields of US Treasuries and other government bonds, and on the margin push uplong-term borrowing costs for consumers and corporations. Brent crude, used to price worldwide oils, slipped 10 cents to $45.85 a barrel in London.
ENERGY: Benchmark U.S. crude rose 43 cents, or 1 percent, to $43.73 a barrel in NY.
Gold rose $7.60 to $1,317.80 an ounce.
In Hong Kong, the Hang Seng index dropped 0.2 per cent, to 23,500.81 points, while the Hong Kong China Enterprises Index was unchanged at 9,751.20.
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“Dollar-yen has fallen pretty much every time we’ve had an FOMC and BOJ meeting week this year”, David Forrester, a foreign-exchange strategist at Credit Agricole, told CNBC’s “Street Signs” on Monday.
