Yen Bulls Burned After BOJ's Surprise Spurs Biggest Rout in Year

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The currency held losses against all major peers and bond yields dropped to fresh records on Monday after Kuroda unexpectedly announced a negative interest-rate strategy on Friday, setting off the yen’s biggest drop against the dollar since October 2014. The move hammered hedge funds and other large speculators that had built up the most bullish yen position in almost four years as a rout in global stocks spurred demand for havens.

The yen fell 0.2 percent against the dollar to 121.33 as of 9:01 a.m. in Tokyo after slumping as much as 2.3 percent on Friday to 121.69, its lowest since Dec. 18. The currency closed down 1.9 percent at 121.14 on Friday, its biggest daily decline since October 2014 when the BOJ surprised markets by expanding its stimulus. The yen fell 0.7 percent in January.

Source : Bloomberg

Oil Records Second Weekly Gain Amid Output Cut Speculation

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Oil recorded a second weekly gain amid speculation that OPEC and Russia will meet to discuss trimming crude production to bolster prices.

Russian Energy Minister Alexander Novak said that while OPEC member Venezuela proposed a meeting next month, nothing is scheduled. Russia, after months of insisting it was happy to keep pumping at full throttle, suggested in recent comments it is open to compromise with the Organization of Petroleum Exporting Countries. Equities climbed as the Bank of Japan’s unexpected monetary stimulus boosted confidence that central banks remain vigilant of slowing economic growth.

Oil has pared its decline this year to about 9 percent after plunging to a 12-year low. Global markets remain volatile because of concerns about brimming U.S. stockpiles and rising exports from Iran following the removal of sanctions against the country. OPEC’s January crude output climbed to the highest level in data compiled by Bloomberg going back 20 years as Indonesia’s membership was reactivated.

West Texas Intermediate for March delivery rose 40 cents to settle at $33.62 a barrel on the New York Mercantile Exchange. The contract climbed as much as 3.6 percent to $34.40 earlier. Total volume traded was 46 percent above the 100-day average.

Brent for March settlement, which expires Friday, rose 82 cents, or 2.4 percent, to $34.71 a barrel on the London-based ICE Futures Europe exchange.

Source: Bloomberg

Asian Stocks Advance for Fourth Day Amid Central Bank Optimism

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Asian stocks rose, with the regional benchmark index heading for its fourth day of advances, as shares in Tokyo extended Friday’s rally after the Bank of Japan stepped up its monetary stimulus.

The MSCI Asia Pacific Index gained 0.4 percent to 121.82 as of 9:05 a.m. in Tokyo, extending its longest winning streak of the year as optimism grew that central banks around the world will support financial markets.

Policy makers took the sting out of the worst start to a year since 2009 for global equities, helping to ease a selloff that wiped more than $5 trillion from market value. The European Central Bank’s indication it could expand stimulus as soon as March was followed by the Federal Reserve standing pat on interest rates and noting its concern over the global situation. The BOJ outdid them both, shocking investors Friday by joining the ECB in imposing negative rates, a strategy once considered unthinkable among central bankers that’s aimed at stoking spending.

Japan’s Topix index jumped 1.2 percent, adding to Friday’s 2.9 percent surge, as the yen maintained losses near a six-week low. South Korea’s Kospi index advanced 0.2 percent. Australia’s S&P/ASX 200 Index gained 0.9 percent. New Zealand’s benchmark gauge increased 0.4 percent.

Futures on the FTSE China A50 Index added 0.4 percent in most recent trading, while those for Hong Kong’s Hang Seng Index slipped 0.7 percent. The Shanghai Composite Index rallied 3.1 percent on Friday amid speculation the steepest monthly selloff since the global financial crisis was overdone, while the central bank injected more liquidity into the financial system to avert a cash crunch before this month’s holidays.

Source : Bloomberg

Japan Stocks Rise as Topix Pares Worst Annual Start Since 2009

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Japanese stocks rose for a second day after the Bank of Japan’s unexpected boost to stimulus, paring the Topix index’s worst start to a year since 2009. Lenders fell again following the central bank’s decision to start charging for some of their deposits held at the institution.

The Topix index added 1 percent to 1,446.97 as of 9 a.m. in Tokyo, after closing higher on Friday amid wild swings as investors assessed the BOJ’s plan to introduce a negative interest rate on some deposits. The Nikkei 225 Stock Average gained 1 percent to 17,688.83. The yen traded at 121.35 per dollar after slumping 1.9 percent on Friday.

Gains on Friday pared the Topix’s January loss to 7.5 percent. The measure fell into a bear market on Jan. 20, buffeted by concerns of a slowdown in China and the rout in oil and other commodities. Banks, energy explorers and insurers were the only decliners among the 33 Topix industry groups on Monday.

Source : Bloomberg

U.S. Stocks Trim January Rout Amid BOJ Action

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The U.S. stocks ended the worst January since 2009 with the best one-day gains in more than four months, after earnings from Microsoft Corp. exceeded expectations and the Bank of Japan stepped up monetary stimulus.

Equity gains accelerated in the final hour, with the strong finish a fitting end to a weak month that featured sharp reversals on an almost daily basis. Microsoft led the surge Friday with its biggest gain in three months. Nine of the S&P 500’s 10 main groups rose at least 1.6 percent. Amazon.com Inc. was a blemish, tumbling 7.6 percent as earnings for the holiday quarter missed estimates.

S & P 500 rose 2.5 percent to 1,939.72 at 4 p.m. in New York. The gauge slumped 5.1 percent in January, its worst start to a year since the height of the financial crisis.

Stocks swung between gains and losses this week as investors assessed corporate earnings and the degree to which central banks will intervene to help stem increasing volatility and a dimming outlook for global growth.

Prior to today’s unexpected action from the Bank of Japan to adopt a negative interest-rate strategy, the European Central Bank signaled last week it could boost stimulus as soon as March. The Federal Reserve said Wednesday it was watching to see how the global economy and markets impact the U.S. outlook.

Source : Bloomberg