While a cheaper yen is good for Japan’s exporters, lower interest rates hurt the net interest margin of Japanese banks.
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MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1 per cent.
Shares in Santos fell 2.9%, Oil Search was down 0.8% and Woodside Petroleum declined 1.1%. New Zealand’s S&P/NZX 50 Index advanced 0.6 per cent. Markets are shut for holidays on Friday in China, Hong Kong, Taiwan and South Korea. Federal Reserve and the Bank of Japan next week are also in focus for market watchers.
“It’s no surprise to see reasonable buying in the short-to medium-duration United States treasuries, while the longer end of the curve hardly moved”, he said.
The yield on benchmark 10-year German bonds escaped negative territory for the first time since mid-July while its USA equivalent shot up 8 basis points to its highest level since the end of June.
Assessment to focus on factors that have potentially hampered achievement of the 2% price stability and the cost and benefits of negative interest rates.
Apple’s shares rose as much as 3.5 per cent and gave the three major indexes their biggest boost after the company said that the first batch of its new iPhone 7 Plus sold out globally. At its meeting next week, the BOJ is due to conduct a comprehensive review of its current policy framework that combines negative interest rates with a massive asset-buying programme.
Few Japanese companies 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.
The U.S. Treasury yield curve steepened to its steepest level in about two-and-a-half months as longer-dated debt fell, highlighting expectations that the Fed could hold off from raising rates at its two-day meeting set to conclude on Wednesday.
The SNB warned that significant risks remained after sticking with its ultra-loose monetary policy and currency intervention, while the BoE said it was still likely to cut interest rates to just above zero this year.
An appropriate policy mix, including reforms in the labour market and a fiscal plan, would increase monetary policy effectiveness.
While likely holding the federal funds rate at 0.25-0.50 percent on Wednesday, the Fed could signal in stronger terms that a rate hike is coming, if for no other reason than to prevent complacency in the markets.
After a weaker-than-expected 1.1 per cent annualized pace of expansion in the second quarter, the USA economy likely picked up pace and is expected to expand 2.8 per cent in the third quarter. Most notably, retail sales, core retail sales, the Producer Price Index, and industrial production were all significantly lower than expected.
Oil prices pulled back after Thursday’s gains of as much as 2.5 percent as renewed risk appetite stemmed a two-day rout.
Brent crude futures fell $1.25, or 2.7 percent, to settle at $45.85 per barrel, while USA crude slid $1.32, or 2.9 percent, to settle at $43.58. U.S. crude retreated 0.6% to $43.66, poised to end the week down 4.8%. Spot gold XAU= was last trading up 0.1 percent at $1,314.74 an ounce, but still down about 1 percent for the week.
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An electronic board displaying the Tokyo stock index at a securities office in Tokyo, Japan.
