Yen Drops as Abe Delays Sales Tax, Calls Early Vote; Krona Rises

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The yen fell against the euro and touched its weakest in more than seven years against the dollar as Japanese Prime Minister Shinzo Abe called an early election and suspended a planned sales-tax increase.

Japans currency slipped against most of its 16 major peers as Abe said he will dissolve parliament on Nov. 21. The euro rallied as German investor confidence rose for the first time in 11 months. Russias ruble strengthened as the tax season approaches. Swedens krona lead a rally among the 16 major currencies, while New Zealands dollar strengthened before a dairy auction.

The yen depreciated 0.9 percent to 146.59 per euro at 3:16 p.m. New York time, after trading at 146.70, the weakest since October 2008. The currency reached 117.05 per dollar, matching the weakest level since October 2007, before trading at 116.98. The 18-nation euro rose 0.7 percent to $1.2532.

Source: Bloomberg

Gold gains as dollar falls in the wake of Japan economic moves

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Gold prices jumped Tuesday as the dollar eased against major currencies amid economic and political news, and as equities continued to get stuck in a tight trading range.

Gold for December delivery gained $13.60, or 1.2%, to settle at $1,197.10 an ounce. December silver tacked on 12 cents, or 0.7%, to $16.17 an ounce.

The dollars fall against major currencies resulted in gold prices moving higher. The dollar underpins gold contract trading. The U.S. currency fell against the yen after Japanese Prime Minister Shinzo Abe said Tuesday the government will delay, by 18 months, a planned increase in sales tax. He will dissolve the lower house of parliament on Nov. Friday and has called for a snap election to be held in December.

Meanwhile, the dollar fell against the euro after a measure of German economic confidence improved for the first time in nearly a year, sharply beating expectations.

In other metals action, January platinum added $3.30 to $1,204.60 an ounce, while December palladium shed $8, or 1%, to $776.70 an ounce.

High-grade copper for December delivery lost four cents to $3 a pound.

Source: Markewatch

Japanese Stocks Rise After Abe Shelves Sales Tax, Calls Election

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Japanese stocks rose after Prime Minister Shinzo Abe postponed a planned sales-tax increase, called a snap election and ordered his ministers to start preparing a stimulus package.

The Topix index climbed 0.6 percent to 1,402.67 as of 9:01 a.m. in Tokyo after gaining 2.1 percent yesterday. The Nikkei 225 Stock Average advanced 0.4 percent to 17,415.72 today. The yen slipped 0.1 percent to 116.93 per dollar after weakening 0.2 percent yesterday. Abe will delay raising the levy by 18 months, he said at a press conference yesterday. Parliament will be dissolved Nov. 21. The vote will probably be Dec. 14, said people with knowledge of the ruling partys strategy.

The Topix has almost doubled since November 2012, with investors in Japanese stocks about $1 trillion richer, as policies of Abe and the Bank of Japan weakened the yen and spurred inflation. Through yesterday, the measure was up 18 percent from an Oct. 17 low after the central bank added to quantitative easing, the $1.1 trillion pension fund pledged to buy more shares and amid speculation Abe wouldnt go through with the tax increase.

Japanese stocks tend to rise after elections are called. In 11 elections since 1980, the Topix index has posted average total returns of 3.1 percent between the dissolution of parliament and the vote, according to data compiled by Bloomberg and Daiwa Securities Group Inc.

The BOJ ends a two-day meeting and issues a policy statement today.

Source : Bloomberg

Asian Stocks Follow U.S. Equities Higher as Abe Calls Election

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Most Asian stocks rose after Japans Prime Minister Shinzo Abe called an early election and U.S. equities rallied to all-time highs.

The MSCI Asia Pacific Index added 0.1 percent to 140.75 as of 9:05 a.m. in Tokyo, with three shares advancing for each that fell. Japans parliament will be dissolved on Nov. 21, Abe said at a press conference yesterday in Tokyo, without giving an election date. He also delayed for 18 months a second planned sales-tax increase after the first installment in April led consumer spending to stagnate and the economy to contract for two straight quarters.

Japans Topix index climbed 0.7 percent as the yen held near a seven-year low against the dollar. Abe also ordered his ministers to prepare a stimulus package. The Bank of Japan will wrap up a two-day policy meeting today, after it boosted already-unprecedented stimulus last month.

South Koreas Kospi index advanced 0.1 percent. New Zealands NZX 50 Index rose 0.1 percent and Australias S&P/ASX 200 Index slipped 0.2 percent. Markets in China and Hong Kong have yet to open.

Futures on the Hang Seng Index gained 0.1 percent in their most recent trading session. The Hong Kong gauge has fallen 2.3 percent in the past two days to a three-week low amid a slow start to the Shanghai-Hong Kong stock link. Just 7.6 percent of the Hong Kong quota was taken up yesterday, while 37 percent of the Shanghai limit was filled.

Source : Bloomberg

U.S. Stocks Advance on Economic Optimism as Health-Care Gains

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U.S. stocks rose, sending benchmark indexes to all-time highs, as health-care and raw-material companies rallied amid speculation the economy is strong enough to overcome a global slowdown.

The Standard & Poors 500 Index rose 0.5 percent to 2,051.81 at 4 p.m. in New York, for its biggest gain since Nov. 5. The Dow Jones Industrial Average increased 40.07 points, or 0.2 percent, to 17,687.82.

The S&P 500 has rallied to records as better-than-expected earnings and economic data have increased confidence that the U.S. economy is able to weather a global slowdown even as the Federal Reserve winds down its stimulus program.

The equity benchmark has rebounded 10 percent from a six-month low in October and is trading at 17.1 times the projected earnings of its members, the highest multiple since 2009. JPMorgan Chase & Co. yesterday told investors to dump U.S. equities in favor of their European counterparts because of relative valuations.

Source: Bloomberg