BLBG: Yen Gains as BOJ Meets; Stocks Fluctuate, Oil Declines
The yen rebounded from its lowest level since June 2010 against the dollar as the Bank of Japan (8301) began a two-day policy meeting. European stocks were little changed as finance chiefs gathered for the first time this year.
Japan’s currency strengthened 0.7 percent to 89.50 per dollar at 12:55 p.m. in London. The Stoxx Europe 600 Index rose 0.2 percent, with the volume of shares changing hands 28 percent less than the 30-day average. Standard & Poor’s 500 Index futures were little changed. Oil dropped from a four-month high. U.S. natural gas rose to its highest level since Dec. 7.
Speculation the BOJ, under pressure from new Prime Minister Shinzo Abe, will increase monetary stimulus to lift the economy out of its third recession in five years has pushed the yen 12 percent lower versus the dollar in the past three months. European finance ministers meet in Brussels today to discuss the debt crisis, while U.S. markets are closed for a public holiday.
“The pressure to temporarily correct excessive weakness in the yen is likely to increase,” said Junichi Ishikawa, an analyst at IG Markets Securities Ltd. in Tokyo.
The yen gained at least 0.4 percent against all 16 of its major peers, adding 0.7 percent versus the euro. All 23 economists in a Bloomberg survey expect the BOJ to expand asset purchases when its meeting concludes, with a median estimate for a 10 trillion yen ($112 billion) increase.
The euro weakened less than 0.1 percent to $1.3314. It retreated 0.3 percent to 1.24 Swiss francs.
Germany’s 10-year bond yield rose four basis points to 1.60 percent. Cash trading of Treasuries was closed today for the Martin Luther King Jr. holiday.
Richemont Falls
The Stoxx 600 (SXXP) pared an earlier gain of as much as 0.3 percent. Cie. Financiere Richemont SA, the maker of Cartier jewelry, sank 5.2 percent, the most in four months, after reporting third-quarter revenue that missed analysts’ estimates. Burberry Group Plc, the U.K.’s largest luxury-goods goods company, fell 1.2 percent and LVMH Moet Hennessy Louis Vuitton SA dropped 1.2 percent. Admiral Group Plc advanced 5.1 percent as Goldman Sachs Group Inc. upgraded the insurer.
Oil lost 0.4 percent $95.20 a barrel. U.S. natural gas increased 1 percent to $3.60 per million British thermal units in electronic trading on the New York Mercantile Exchange.
The MSCI Emerging Markets Index (MXEF) fell from a two-week high, slipping 0.3 percent. Russia’s Micex Index and Brazil’s Bovespa both lost 0.2 percent, while the Shanghai Composite Index gained 0.5 percent. Reliance Industries Ltd., India’s largest company by market value, led the Sensex 0.3 percent higher after profit beat analyst estimates.
Malaysia’s benchmark gauge tumbled 2.4 percent, the most since September 2011, on speculation the government will call for an early election that will result in a weaker grip on power.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net;
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
