Yen Extends Slump on BOJ Move; Japanese Shares Gain

aussieJapanese 10,000 yen, left, and U.S. 100 dollar banknotes are arranged for a photograph in Tokyo, Japan, on Monday, June 20, 2016. Photographer: Tomohiro Ohsumi
  • Yen Extends Slump on BOJ Move; Japanese Shares Gain

The yen extended the biggest decline in a week and Japanese bonds rose as the nation’s central bank stepped in to buy debt. Japanese shares gained in a day of thin trading across Asia with a slew of markets closed for Lunar New Year celebrations.

The yen dropped for a second day as the BOJ’s move signaled it won’t let 10-year yields rise. The Topix Index rose to within a few points of the highest since December 2015, while Australian shares also climbed. The S&P 500 Index slipped Thursday from an all-time high, while the Dow Jones Industrial Average notched another record. Oil traded above $53 a barrel, while gold was heading for its longest slump in three months.

Signs U.S. expansion remained on uneven footing emerged Thursday, as data showed rising bond yields damped home purchases last month, while jobless claims rose more than forecast. Japanese consumer prices dropped for a 10th straight month, though the pace of declines eased, supporting expectations for a return to inflation later this year.

Markets in China, South Korea, Taiwan and Vietnam will be closed Friday for the start of Lunar New Year. Hong Kong, Malaysia and Singapore will have shortened sessions.

Here are the main moves in markets:

Stocks

  • The Topix rose 0.4 percent as of 11:30 a.m. in Tokyo.
  • Australia’s S&P/ASX 200 Index rose 0.6 percent as the nation’s markets reopened after being closed Thursday for a national holiday. Hong Kong’s Hang Seng Index slipped 0.1 percent, while Singapore’s Straits Times Index added 0.2 percent.
  • The S&P 500 Index slipped 0.1 percent at 2,296.68 on Thursday in New York, after the measure rose past 2,300 for the first time.

Currencies 

  • The yen slid 0.3 percent to 114.89 per dollar, after dropping 1.1 percent the previous session.
  • The Bloomberg Dollar Spot Index added 0.1 percent. It jumped 0.6 percent on Thursday. The measure is headed for a fifth straight weekly decline — the longest stretch since May 2015 — after rising to the highest in more than a decade.
  • The peso dropped 0.5 percent to 21.3179 per dollar, extending Thursday’s 0.7 percent retreat as Mexico’s president canceled a meeting with Donald Trump.

Bonds

  • Japanese 10-year yields fell two basis points to 0.07 percent after the BOJ boosted the amount of 5-to-10-year bonds it buys in its outright purchase operations.
  • Australian 10-year yields jumped six basis points to 2.79 percent, while those on similar-dated New Zealand debt advanced four basis points to 3.40 percent.
  • The yield on 10-year Treasuries was up one basis point to 2.51 percent. It had slipped one basis point on Thursday after an auction of $28 billion in seven-year notes drew a record amount of buying from indirect bidders, signaling interest from foreign central banks and mutual funds.

Commodities

  • Gold retreated 0.2 percent to $1,186.25 an ounce, after dropping 1 percent in New York. It was headed for its fourth straight loss, which would be the longest slump since October.
  • West Texas Intermediate crude was at $53.85 a barrel after surging 2 percent to an almost three-week high as optimism increased OPEC and other producing nations would adhere to their pledged output cuts.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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