Yen Gains as Bullish Bets Reach Four-Year High Before BOJ Meets

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The yen rose the most among its developed-market peers after Bank of Japan Governor Haruhiko Kuroda showed little appetite for an immediate expansion of stimulus before the central bank sets policy on Friday.

Japan’s currency halted a two-day slide after Kuroda said in an interview on Jan. 22 in Davos, Switzerland that “at this stage, we don’t think the current market situation has been affecting corporate behavior unduly.” The yen has gained against all its major counterparts since the start of the year as a China-led stock selloff and a continued tumble in oil prices spurred demand for haven assets. Hedge funds and other large speculators raised net bullish yen positions to the highest in almost four years last week.

The yen added 0.2 percent to 118.50 yen per dollar as of 9:46 a.m. in Tokyo, extending its advance this year to 1.4 percent. It strengthened 0.2 percent to 127.96 per euro.

Source: Bloomberg

WTI Oil Books Best One-Day Gain Since August

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Oil futures rocketed higher on Friday, stretching their rally to a second straight session and marking the best one-day jump since August, according to FactSet data.

March West Texas Intermediate crude finished at $32.19 a barrel on the New York Mercantile Exchange. It rose $2.66, or 9%, for the session. For the week, it gained 9.4% based on Friday's closing level for the February contract, which expired Wednesday.

Source: MarketWatch

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Asia Stocks Extend Global Rebound as Japan, Material Shares Rise

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Asian stocks extended the rally that sent global equities to their biggest gain in 3 1/2 years as Japanese shares and materials companies climbed.

The MSCI Asia Pacific Index added 0.5 percent to 119.07 as of 9:02 a.m. in Tokyo, with materials and health-care shares leading the advance. Japan’s Topix index climbed 1.1 percent as markets across the region extended gains that began after European Central Bank President Mario Draghi signaled it may boost economic support. Bank of Japan Governor Haruhiko Kuroda, who decides on policy on Jan. 29, played down the impact of recent market gyrations on his economy, while traders are predicting the Federal Reserve will hold interest rates when it also meets this week.

A measure of volatility on the MSCI Pacific Gauge climbed to the highest since September last week, while the Shanghai Composite Index swung between gains and losses every trading day. Japan’s Topix surged 5.6 percent on Friday after losing 6.4 percent the previous two days.

The MSCI Asia Pacific Index is still down 9.7 percent this year, while the Shanghai Composite Index has tumbled 18 percent as investors retreat from riskier assets on concerns about China’s economic slowdown and a rout in oil and other commodities.

South Korea’s Kospi index added 0.4 percent on Monday. New Zealand’s benchmark gauge rose 0.7 percent and Australia’s S&P/ASX 200 Index increased 1.1 percent. Markets in China and Hong Kong have yet to start trading. Futures on the Hang Seng and Hang Seng China Enterprises indexes gained 1.3 percent in most recent trading, while contracts on the FTSE China A50 Index futures rose 1.2 percent.

Chinese stocks rallied on Friday as energy producers surged on higher oil prices and after the government signaled it will curb overcapacity in industries such as coal that have been dragging down economic growth. The Shanghai Composite Index rose 1.3 percent, while the Hang Seng China Enterprises Index climbed 3.4 percent.

Futures on the Standard & Poor’s 500 Index slid 0.1 percent on Monday. The U.S. equity benchmark index advanced 2 percent Friday, the most since Dec. 4, while the MSCI All-Country World Index posted its best day since June 2012.

Energy shares advanced in Asia as oil fluctuated near $32 a barrel following the biggest two-day rally in more than seven years.

Source: Bloomberg

Japanese Stocks Advance for Second Day Amid Stimulus Speculation

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Japanese stocks jumped, heading for their biggest two-day gain since November 2014, as speculation central banks will step in to bolster markets continued fueling a recovery in shares.

The Topix index added 1.1 percent to 1,388.99 as of 9:02 a.m. in Tokyo, extending Friday’s 5.6 percent advance and headed for the first back-to-back gain of the year. The Nikkei 225 Stock Average climbed 0.8 percent to 17,087.47. The yen traded at 118.64 per dollar, near its weakest since the first week of January. Oil maintained gains after a two-day rally of 13 percent.

Japanese trade data showed exports dropped 8 percent in December from a year earlier, steeper than estimates for a 7 percent decline. Imports lost 18 percent, compared with expectations for a 16.4 percent drop.

Despite Friday’s rally, the Topix ended last week with a 2 percent loss. Both the Topix and the Nikkei 225 fell into a bear market on Wednesday.

E-mini futures on the Standard & Poor’s 500 Index added less than 0.1 percent after the underlying measure jumped 2 percent Friday, with energy and raw-material companies leading gains to post their first weekly advance this year.

Source: Bloomberg

U.S. Stocks Rally Amid Stimulus Optimism Led by Energy Shares

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The Standard & Poor’s 500 Index capped its strongest two-day rally in three months, amid speculation central banks around the world will act to support the global economy even as the Federal Reserve tightens policy.

The S&P 500 gained 2 percent to 1,906.88 at 4 p.m. in New York, the best back-to-back increase since October after turning positive for the week.

Equities continued a snap-back from the worst start to a year since 2009, hammered as oil sank to 12-year lows amid rising supplies and concern that flagging global growth, particularly in China, will drag on the U.S. economy. Crude rallied Friday to its biggest two-day advance since 2009.

The S&P 500 rebounded yesterday from a 21-month low as European Central Bank President Mario Draghi signaled the potential for more stimulus as early as March. Sentiment also received a boost overnight from speculation that the Bank of Japan is considering additional easing.

The benchmark through Thursday was headed for a fourth weekly decline, and on Wednesday dipped below a level technical analysts call oversold, meaning a selloff has gone too far. A rout stoked by concerns about China’s slowdown and plunging oil wiped off as much as $2.45 trillion from U.S. equities this year.

Source : Bloomberg