Japanese Stocks Rise on Hopes for BOJ Easing
29 October 2015 - 1:00PM
Dow Jones News
Japanese stocks rose to their highest levels in two months on
Thursday, amid hopes that the Bank of Japan will announce fresh
easing measures, although gains were capped after the U.S. Federal
Reserve signaled it could raise interest rates as soon as
December.
The Nikkei Stock Average was up 0.6% at 19015.51, reaching its
highest level since late August. Many economists expects that
Japan's central bank will expand its already massive government
bond-buying program at its policy meeting Friday.
"A lot of people have bought Japan in the past few weeks in
anticipation of [Friday's meeting]," said Ilya Feygin, managing
director at New York-based brokerage WallachBeth Capital.
Elsewhere, Australia's S&P ASX 200 was down 0.3% and South
Korea's Kospi was up 0.6%.
U.S. Fed officials suggested they had become less concerned in
recent weeks about turbulence in financial markets and uncertain
economic developments overseas. They pointed specifically to the
next meeting as a time when they would assess if it was time to
raise rates.
Markets around the world have rallied this month on hopes that
the Fed would keep rates lower for longer, while the prospect of
further stimulus from central banks in Europe and Asia also fueled
gains. In September, the Fed left short-term rates unchanged amid
worries about weak growth overseas and concerns about exceptionally
low inflation at home.
The MSCI Asia Pacific Index, up 9.3% for the month as of
Wednesday's close, is on track for its best month since April
2009.
Still, Mr. Feygin noted that region's markets have lost steam in
the past week. "The Fed was a bit more hawkish than people
expected."
The Shanghai Composite Index was down 1.1% this week as of
Wednesday's close, even after the People's Bank of China cut
interest rates last Friday.
"It shows that central banks are an important factor but not all
that powerful…and that markets in China especially need something
more," added Mr. Feygin.
Overnight, U.S. stocks rebounded to new highs after the Fed held
rates near zero.
In Japan, signs of weakness in the economy are pressuring the
Bank of Japan for more stimulus, a move that would be part of a now
two-year-long fight to spark inflation.
Still, Bank of Japan Governor Haruhiko Kuroda hasn't given a
public indication that he believes further easing action is
necessary now, instead saying the bank can still achieve the bank's
2% inflation target next year.
The Japanese yen was up 0.3% at 120.66 to one U.S. dollar.
The Malaysian ringgit was down 0.7% at 4.2950 to one U.S.
dollar. The dollar strengthened broadly against global currencies
following the Fed's statement.
Shares of Nintendo Co. were recently up 0.9%. After the market's
close Wednesday, the company said its operating profit for the
April-to-September period totaled ¥ 8.98 billion ($74.6 million),
buoyed by its core game business and game-interactive figurines and
cards. The gains were a turnaround from a year-earlier loss of ¥
215 million, though analysts expected a profit of ¥ 14.4
billion.
In Australia, shares of Woolworths Ltd. fell 8.4% after the
supermarket operator warned that first-half profit may fall as much
as 35%, as it cuts prices and accelerates investments to compete
with rivals. The company expects after-tax profit of between 900
million Australian dollars (US$639 million) and A$1.0 billion in
the six months through December, which is 28% to 35% lower than a
year earlier, excluding significant items.
Brent oil was up 0.1% at $49.12. U.S. oil prices jumped 6.3%
overnight, the largest one-day percentage gain since Aug. 31.
Gold prices were down 1.5% at $1158.60.
Takashi Nakamichi and Rebecca Thurlow contributed to this
article.
Write to Chao Deng at Chao.Deng@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 28, 2015 21:45 ET (01:45 GMT)
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