Stock Markets in Asia Head Towards Weekly Increases
The global financial landscape experienced a series of significant events this week, with several central banks making key decisions and markets reacting accordingly.
On Friday, the Bank of Japan (BoJ) maintained its short-term interest rates at 0.5%, but two of its members voted for a rate hike. This decision came on a day when stock options, index options, and stock index futures all expired, leading to increased trading activity and potential market volatility.
Meanwhile, the BoJ announced its decision to start selling its vast holdings of exchange traded funds (ETF) and real-estate investment trusts (Reits). This move, coupled with the lack of a rate hike, seemed to have a negative impact on the Japanese yen, which lost 0.4% to ¥147.48 after the BoJ's decision.
In contrast, central banks in the US, Canada, Norway, and the Bank of England (BoE) have made interest rate cuts this week. The dollar rebounded after the Fed's first cut in nine months, while the dollar gained 0.9% on the Norwegian crown overnight after the Norges Bank cut rates and signalled rates could continue to fall.
The BoE kept rates unchanged at 4%, leading to the pound holding losses at $1.3557. On the other hand, the S&P 500, the Dow, and the Nasdaq all closed at record highs overnight, while South Korea's benchmark share index lost 0.6% but still hovered near a record level. Japan's Nikkei, which hit a record high in early trade, reversed gains and was last down 0.4%.
The focus is now on BoJ governor Kazuo Ueda's news conference, scheduled for 6.30am GMT. Inflation figures also made headlines, with Japan's core inflation running at 2.7% in the year to August, marking the slowest pace in nine months.
In other news, Intel shares surged 23%, while Nvidia gained 3.5%. Nvidia will also be investing $5bn in the struggling US chipmaker Intel. Spot gold prices gained 0.4% at $3,658/oz.
The 10-year treasury yields held at 4.1102%, while the 10-year Japanese government bond (JGB) yield jumped 4 bps to 1.635%. The dollar index held at 97.28, having plunged to a multiyear low of 96.224 on Wednesday.
As we move forward, the global financial scene continues to evolve, with central bank decisions and market movements shaping the landscape. Stay tuned for more updates as they unfold.
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