You’ll have noticed that the yen and Nikkei were displeased yesterday. Like throw your toys out of the pram because you didn’t get what you wanted displeased. Like one of the worst one day JPY moves in the past decade displeased.
What they didn’t get, and what prompted that tantrum, was any auld bit of easing from the Bank of Japan.
And here are eight potential reasons why the BoJ disappointed, from SocGen: Read more
A brief history of Japan’s stock market, charted by Nomura. Do click to enlarge/ to spot the bubbles:
Slightly wearying, all this see-sawing in Japan. The Nikkei fell more than 6 per cent at one point on Thursday, though it had rallied a bit at pixel time. Still heading towards bear territory.
Some Nikkei investors spotted leaving the scene on Wednesday: Read more
This is is a guest post from Philip Pilkington, a writer and research assistant at Kingston University.
After a few days of volatility the S&P 500 rebounded on the back of better than expected jobs data last Friday. Meanwhile the Nikkei, the decline of which the previous week seems to have precipitated the shakiness in the S&P 500, started to stabilize on Monday. And so the classic question rears its head once more: do stock markets drive the economy or vice versa? Read more
In a word: muted.
The lack of progress on US debt ceiling talks over the weekend hasn’t caused a spiral of chaos. Read more
The following is the formula for a properly structured warrant tied to Japan’s Nikkei index — which would (we presume) be easy enough to hedge for its issuer:
(Closing Level – Strike Level) x Index Currency Amount / Exchange Rate. Read more
Contrary to popular myth — goldfish have a memory capability that spans months.
But that doesn’t stop Nomura’s chart of the day, titled “markets’ goldfish memory,” from making its point. Assets have very quickly reversed their post-March 11 moves. Read more
Rising concerns about contamination from the Fukushima nuclear accident and little sign that allied bombing has reduced Colonel Gaddafi’s resolve pushed the FTSE All-World index lower for the first time in five days, the FT’s global market overview reports. The global benchmark was down 0.2 per cent as the rally from last week’s Japan quake/Libya-inspired rout fades. This continues an easing trend seen overnight on Wall Street, when the S&P 500 lost 0.4 per cent as traders stepped back from the market in an attempt to draw breath after a several days of extreme volatility. News that the US had stopped food imports from the area and that Tokyo authorities have warned young children not to drink tapwater further spooked Japanese stocks, pushing an already soft Nikkei 225 to close down by 1.6 per cent, and nudging US stock futures lower. Wall Street was currently predicted to open with a loss of about 0.3 per cent on Wednesday.
Well, tomorrow’s Nikkei surely can’t be any worse than today’s.
As FT Alphaville noted on Friday, the iShares MSCI Japan Index Fund (EWJ) is proving an interesting barometer for investor sentiment about where the Nikkei is heading the next day. Read more
It’s probably not the time to say this, given Tuesday’s sharp sell-off, but are some financial markets overreacting to the Japanese earthquake?
From Nomura: Read more
Via Reuters, the Nikkei’s biggest percentage fall since October 2008 — a staggering 10.5 per cent.
The latest from the wires and the FT’s live blog is that the death toll is “set to exceed 1,000″ and that aftershocks of magnitude 6.6 and 5.8 have been detected in northern Japan.
A “nuclear emergency” remains in place. As the FT reports on Friday, Japanese officials are considering whether and how to reduce pressure in reactors in the Fukushima Daiichi facility. Reuters reports that the Japanese government has warned there could be a “small radiation leak.” It’s unclear yet whether this was due to engineers’ efforts to reduce pressure and heat in the facility. Read more
As we noted earlier on Friday, there’s nothing quite like a killer earthquake and tsunami to boost a currency — at least, that seems to be the case in Japan where the yen not only recovered after dipping in the wake of Friday’s 8.9-magnitude earthquake and massive tsunami, but went on to rack up some fairly astonishing gains.
In most countries, a natural disaster of that scale would drive a currency down, as seen in New Zealand, where the earthquake that devastated central Christchurch drove down the kiwi and prompted the central bank to cut rates. Read more
US equity futures point to the S&P 500 pulling back from recent multi-month highs on Thursday, but Japanese markets have stood out for a burst of optimism, the FT reports. The Nikkei 225 average climbed 1.4 per cent, as the weaker yen and improving economic data boosted exporters’ outlook, sending the benchmark index to its best level since mid-May. The dollar has consolidated gains from a Wednesday surge against other currencies, borne aloft on a raft of good US economic data, says Reuters. Traders said that another surge would need a strong positive surprise from Friday’s nonfarm payrolls numbers — expected to come in at 175,000 — towards 250,000 or 300,000.
It looks like the Santa Rally is flagging, but then the old boy has had a good run, the FT’s global market overview reports. Bourses in Europe opened flat, the FTSE All-World index was up just 0.06 per cent, US stock futures were little changed and many industrial commodities were weaker. The FTSE Asia-Pacific index was up 0.1 per cent. Japan’s Nikkei 225 dipped 0.2 per cent, though in earlier trading exporters got a lift from figures showing a 9.1 per cent rise in Japan’s exports in November compared with a year earlier. South Korea’s Kospi Composite was 0.1 per cent higher after investors remained largely unruffled by South Korea’s announcement that it would conduct a live-firing drill on Thursday near the border with the North. Hong Kong’s Hang Seng index rose 0.1 per cent, with oil-related shares benefiting from Beijing’s increase in gasoline and diesel prices. But on the mainland the Shanghai Composite fell as the rally in property stocks faded. India’s Sensex was up 0.2 per cent and Australia’s S&P/ASX 200 rose 0.1 per cent. The FTSE Eurofirst 300 was up just 0.1 per cent, while London’s FTSE 100 was flat as the oil and gas sector shed some of its recent gains.The euro has reclaimed the 200-day moving average around the $1.31 level, though judging from moves in other crosses this is as much about a period of dollar weakness than it is of single currency strength. The euro was up 0.3 per cent to $1.3132, while the dollar index, which tracks the buck against a basket of peers, was down 0.2 per cent to 80.50.
An easing of tensions between North and South Korea and supportive comments on the eurozone from the Chinese government has emboldened the bulls, the FT’s global market overview reports. The FTSE All-World equity index was higher by 0.5 per cent, copper was leading commodities as the red metal hit a fresh record, and the dollar was slipping as risk appetite picked up. The FTSE Asia Pacific index was up 1.1 per cent, and South Korea’s Kospi index gained 0.8 per cent as the tensions on the Korean peninsula eased. Japan’s Nikkei 225 rose 1.5 per cent, after the Bank of Japan left its ultra-loose monetary policy unchanged, as widely expected. China’s Shanghai Composite added 1.8 per cent, as funds picked up property stocks that have had a difficult time of late on worries over Beijing’s drive to cool speculative activities. Hong Kong’s Hang Seng advanced 1.5 per cent, with energy stocks in good form as the winter draws in. Australia’s S&P/ASX 200 index advanced 0.7 per cent and India’s Sensex was up 0.8 per cent. The FTSE Eurofirst 300 was up 0.5 per cent and London’s FTSE 100 was higher by 0.5 per cent, with miners and energy again in the driving seat. The dollar is suffering from the improved mood across the market as its haven attractions wilt. The dollar index, which tracks the buck against a basket of peers, was down 0.5 per cent to 80.27.
Cold war-type tensions in Korea, the cold shoulder for the euro and the cold weather affecting much of the European continent meant a difficult start to the holiday-shortened trading week, reports the FT’s global market overview. Despite a poor performance in Asia, stocks managed to heat up in Europe as the end of year rally trundled on. Wall Street was flitting between positive and negative territory but the S&P 500 was up 0.3 per cent and the FTSE All-World index nudged up 0.2 per cent. The FTSE Asia-Pacific index was down 0.3 per cent with South Korea’s Kospi, which at one point was off 1 per cent, losing 0.3 per cent as shipbuilders provided support on hopes for large overseas orders. Japan’s Nikkei 225 fell 0.9 per cent and Australia’s S&P-ASX 200 declined 0.6 per cent. In China, the Shanghai Composite lost nearly 3 per cent in early trade as worries about tighter monetary conditions also affected sentiment. Property developers in Shanghai declined after Beijing on Sunday urged local authorities to take steps to curb rapid growth in land prices. The SCI closed off 1.4 per cent, while Hong Kong’s Hang Seng index was lower by 0.3 per cent. India’s Sensex index bucked the regional trend with a gain of 0.1 per cent. The South Korean won has been volatile as dealers reacted to tensions on the Korean peninsula and news that Seoul is to impose levies on capital flows. The won retreated 1.5 per cent at one stage to hit a three-month low of Won 1,171.90 per dollar, but has staged a turnaround and is now up 0.2 per cent at Won 1,150.25.
European bourses have opened mixed as seasonal bullishness suffers a chill, reports the FT’s global market overview. Cold war-type tensions in Korea, the cold shoulder for the euro and the cold weather affecting much of the continent means a difficult start to the holiday-shortened trading week. The FTSE All-World index was flat, the FTSE Eurofirst 300 was higher by 0.1 per cent and London’s FTSE 100 was off 0.1 per cent as miners, banks and retailers fell back but gas and electricity groups saw buyers. The FTSE Asia-Pacific index was down 0.4 per cent with South Korea’s Kospi, which at one point was off 1 per cent, losing 0.3 per cent. Japan’s Nikkei 225 fell 0.9 per cent and Australia’s S&P-ASX 200 declined 0.6 per cent. In China, the Shanghai Composite lost nearly 3 per cent in early trade as worries about tighter monetary conditions also affected sentiment. The SCI finished off 1.4 per cent, while Hong Kong’s Hang Seng index was lower by 0.8 per cent. The geopolitical concerns are helping support the traditional haven currencies such as the dollar, Swiss franc and yen, though moves are meagre in early European trade. The buck was up 0.1 per cent on a trade-weighted basis to 80.41, while the euro was down 0.1 per cent to $1.3166 as eurozone debt woes weigh.
Hopes for a reduction in eurozone angst following news out of Brussels of a planned bail-out system to combat future crises has boosted the euro and freed investors to embrace improving global economic signals, the FT’s global market overview reports. The FTSE All-World index was up 0.3 per cent, commodities were rallying and the dollar falling as risk appetite increases. US stock futures suggest Wall Street will open flat but at the 2-year highs reached on Thursday following better than expected reports on housing, jobs and factory activity in the mid-Atlantic region. A sharp downgrade of Ireland’s credit rating by Moody’s has been waved away as old news. The FTSE Asia Pacific index was up 0.4 per cent, with South Korea’s Kospi Composite up 0.9 per cent to a 3-year high and Taiwan up 0.4 per cent. However, Japan’s Nikkei 225 lost 0.1 per cent, with investors cautious as the benchmark index has gained nearly 13 per cent since early November on the back of improved corporate earnings. The FTSE Eurofirst banking index was down 0.5 per cent and this has ensured the broader FTSE Eurofirst 300 is down 0.2 per cent. London’s FTSE 100 was up 0.1 per cent, supported by resources groups. The euro is displaying some early vigour on the news out of Brussels, rising 0.5 per cent versus the dollar to $1.3297 and up 0.4 per cent to the yen at Y111.62. The dollar index was down 0.3 per cent at 79.79 as the pull back in Treasury yields and the more upbeat broader mood reduces “haven” flows.
Trading was positive but cautious as investors welcomed mounting evidence of global economic recovery but remained wary of an imminent rate rise from Beijing and signs of further stress in the eurozone, the FT’s global market overview reports. The FTSE All-World equity index was up just 0.1 per cent, commodities were firmer and top-rated bond yields were lower as the heavy recent selling of debt continued to abate. Currencies were relatively stable, though the euro had given up early gains as Spanish bond yields moved back up towards euro-era highs. The FTSE Asia-Pacific index was down 0.1 per cent, held back by a 0.7 per cent slip in Japan’s Nikkei 225 as its good run came to a halt on signs of a possible halt to the yen’s recent slide versus the dollar. Australia’s S&P/ASX 200 rose 0.1 per cent, but Hong Kong’s Hang Seng index was down 0.1 per cent as banks and developers came under pressure. On the mainland, the Shanghai Composite, which has been underperforming global peers for some time on monetary tightening fears, was up 1.1 per cent, recovering from an earlier fall after China reported a surge in imports and exports. The FTSE Eurofirst 300 index was up fractionally, while London’s resource-heavy FTSE 100 was down 0.2 per cent. The US dollar has been trading in tight ranges against key rivals while the euro was a bit firmer in spite of concerns about the bloc’s debt problems. The buck was down 0.1 per cent to 80.0 on a trade-weighted index and off 0.1 per cent against the single currency at $1.3245.
A slight pullback in sovereign bond yields and hopes for Asian economic growth have put bulls on the front foot, reports the FT’s global market overview. The FTSE All-World equity index was up 0.5 per cent, the dollar was a touch weaker and commodities were firmer. The S&P 500 futures index was suggesting Wall Street will open higher by 0.6 per cent, a two-year high. The FTSE Asia-Pacific index was up 1 per cent, with financial shares bolstered by a firm showing from their Wall Street peers. Japan’s Nikkei 225 Average rose 0.5 per cent, a seven-month high as the yen’s recent weakness helped exporters. Sentiment improved further after the Japanese government revised upwards the July-September GDP growth rate to an annualised 4.5 per cent, from a preliminary 3.9 per cent rate. South Korea’s Kospi Composite surged 1.7 per cent to a three year high, led by a strong tech sector, while Hong Kong’s Hang Seng index gained 0.3 per cent as insurers advanced after Standard & Poor’s raised its outlook for the US life insurance industry. However, the Shanghai Composite Index fell 1.3 per cent as investors continue to express fears for an imminent rate rise by the People’s Bank of China. The FTSE Eurofirst 300 was up 0.7 per cent and London’s FTSE 100 was higher by 0.7 per cent as banks see buying. The trade-weighted dollar index was off 0.1 per cent to 79.92 and the buck was down 0.1 per cent relative to the euro at $1.3269. The yen was strengthening versus the dollar after the previous session’s losses, up 0.2 per cent to Y83.83, and was up 0.1 per cent to Y111.19 per euro.
Asian markets rallied on Thursday as they took their cue from healthy rises in the previous session in Europe and the US on hopes that the European Central Bank was set to step up its bond buying programme to calm the eurozone debt markets, the FT’s global market overview reports. In Asia, the Nikkei 225 climbed 1.8 per cent to 10,168.52, while the Shanghai Composite rose 0.7 per cent to 2,843.61. Yet the focus of the day remains Europe’s sovereign debt markets as many investors hope for action by the ECB to stabilise government bond markets. European stock markets opened in buoyant mood with the FTSE 100 up 0.4 per cent at 5,662 and the FTSE Eurofirst 300 up 0.2 per cent. The euro, which gained more than 1 per cent in the previous session against the dollar, was steady at $1.3135 against the US currency in early trading on Thursday. Commodity markets were also benefiting from the more upbeat mood in Europe as well as promising recent economic and jobs data out of the US and Asia. Copper was up for the third session in a row, briefly touching a high of $8,716 a tonne, just $250 short of its record of November 11.
Sovereign debt worries in Europe remain the key focus for markets on Wednesday as Portugal looks to tap the bond markets for €500m, the FT’s global market overview reports. The auction will be closely watched by investors as concerns have heightened in recent weeks that Portugal could be the next country to require an EU bail-out. On Tuesday, Jean-Claude Trichet, ECB president, left open the possibility of the bank significantly expanding its government bond purchases, warning markets not to underestimate Europe’s determination to resolve the escalating eurozone crisis. This helped sentiment with European stock markets opening higher. The FTSE Eurofirst 300 climbed 0.9 per cent to 1,076.74 and the FTSE 100 was 0.9 per cent higher to 5,579. 90. In Asia, stock markets were also higher with the Nikkei 225 almost recapturing the 10,000 mark, climbing 0.5 per cent to 9,988.05. China’s Purchasing Managers Index (PMI) climbed to 55.2 in November, a seven month high, helping turn around earlier losses in mainland Chinese equities. The Shanghai Composite was up 0.1 per cent. The euro, which plumbed new 11 week lows on Tuesday, recovered earlier losses from Asian trading to climb to $1.3075 against the dollar.
Concerns that Ireland’s debt problems will spread to other European markets weighed on investor sentiment on Tuesday, with Asian markets closing mostly lower across the region, the FT’s global market overview reports. However, European markets made inroads into Monday’s heavy losses with the FTSE 100 climbing 0.6 per cent in early trading to 5,581.93 and the FTSE Eurofirst 300 rising 0.3 per cent to 1,072.56. The Shanghai Composite index hit a fresh seven-week low, closing down 1.6 per cent at 2,820.18, having pared back earlier heavier losses of more than 3 per cent. Japan’s Nikkei 225 closed 1.9 per cent lower at 9,937.04 on Tuesday but still managed to record gains of 8 per cent for November, its best monthly performance since March. The euro, which on Monday fell 1.5 per cent in European trading as investors dissected the €85bn bail-out terms for Ireland, was holding firm on Tuesday at $1.3135, just above a 200-day moving average of $1.3128. The euro was down about 6 per cent against the dollar for the month of November, a performance not much better than in May this year when the single currency fell 7.5 per cent at the height of the Greek crisis.
The EU’s €85bn bail-out for Ireland brought some much-needed calm to markets, with the euro holding steady at €1.3300 against the dollar in European trading, reports the FT’s global market overview. But there were few tangible signs of relief in government bond markets, with yields on peripheral sovereign bonds continuing to rise, albeit at a very modest pace. Equity markets in Europe were up healthily in early trading with the FTSE 100 up almost 1 per cent at 5,715.45 and the FTSE Eurofirst 300 up 0.85 per cent to 1,095.87. Financials led the gainers, with Bank of Ireland – which on Monday confirmed plans to raise €2.2bn of additional capital – up 16.9 per cent and Allied Irish Banks up 6.7 per cent. The indices took their lead from Asia, where Japan’s Nikkei 225 was headed for its best month in a year, with the market up 0.9 per cent at 10,125.99, its highest level in five months. The Nikkei 225 closed on Monday up 10.6 per cent for the month of November so far, helped by a return of foreign funds to Japanese equity markets and a recent weakening of the yen against the dollar that has boosted exporters. Hong Kong’s Hang Seng index closed up 1.1 per cent to 23,129.19. Gold held steady at $1,366.60 a troy ounce.
Hopes for an improving US economy are doing battle with an irritating trio of market imps – monetary, fiscal and political – at the end of a volatile week, reports the FT’s global market overview. Earlier today, the gremlins were on top. The FTSE All-World equity index was down 0.4 per cent and commodities were under pressure. Worry was pushing money into perceived havens like the dollar and core bonds. Better data out of the States – supported by well-received corporate earnings and the Federal Reserves’s $600bn backstop – had provided flurries of positivity over recent days. The S&P 500 in New York rose 1.5 per cent, for example, on Wednesday following upbeat news on jobs and consumer sentiment. News of artillery fire within North Korea spooked Asian stocks in late trade, further hurting a region already wary of eurozone fiscal woes and potential monetary tightening in China. The Kospi in Seoul was off 1.3 per cent, Shanghai down 0.8 per cent and Hong Kong lower by 0.6 per cent. The Nikkei 225 in Tokyo lost 0.4 per cent, but has climbed almost 10 per cent in November as foreign investors have returned to the market. In Europe, Bourses were forecast to open down about 0.7 per cent in response to the signs of stress in the euro and the falls in Asia. The euro dropped to a fresh 2-month low versus the dollar as heavier trading returned following Thursday’s holiday-thinned session and as dealers fretted about the economic and political health of the eurozone. The single currency was down 0.6 per cent to $1.3279.
Investors made additions to some riskier bets, emboldened by signs of improvement in the US economy, even as US markets were closed for Thanksgiving, reports the FT. The FTSE All-World equity index edged forward 0.16 per cent, while commodity prices were modestly higher. European bourses posted gains under 1 per cent. The beleaguered euro remained just above two-month lows against the dollar, says Reuters. Expectations remain positive in one bourse however, the FT observes. After five months of struggling below the psychologically important 10,000 level, the Nikkei 225 Stock Average has managed to clear this hurdle and stayed above it for a week. In the past month alone, it has gained 7.4 per cent.
Markets were calmer as the turmoil caused by an exchange of artillery fire between North and South Korea and intense anxiety surrounding eurozone sovereign debt contagion subsided, reports the FT’s global market overview. The FTSE All-World equity index was down just 0.1 per cent, and haven plays, such as the dollar and “core” bonds were moving lower, as investors added to riskier bets in commodities and growth-linked currencies like the Aussie dollar. The Asia-Pacific region has put in a pretty stoic performance given the mood it inherited from the US and Europe overnight, where Wall Street fell 1.4 per cent and “peripheral” bond spreads widened dramatically. The benchmark Kospi index retraced much of a 2 per cent opening fall to close down just 0.2 per cent as investors noted that the country’s stocks already trade at a “North Korea discount” and that skirmishes with Pyongyang do not usually lead to broader conflict. The FTSE Asia-Pacific index was down 0.3 per cent, but the decline is mainly caused by Tokyo playing catch-up after a holiday on Tuesday. The Nikkei 225 fell 0.8 per cent as exporters were pressured by the yen’s “haven” surge in the previous session. The euro has halted its slide. After falling more than 2 cents versus the dollar on Tuesday, as traders became increasingly concerned about the viability of the single currency project in the light of sovereign debt contagion, the euro was up 0.2 per cent to $1.3396. The more reflective mood is reducing demand for dollars and the US unit was down 0.2 per cent on a trade-weighted basis to 79.52, just off an eight-week high.
Chatter among traders of an imminent 75 basis point hike in Chinese interest rates delivered a whipsaw session in Shanghai, somewhat eclipsing the optimism garnered from hopes that a putative Irish bail-out will halt eurozone sovereign debt contagion, the FT’s global market overview reports. The Shanghai Composite fell more than 2 per cent at one stage as the mooted monetary tightening – designed to suppress rising inflation in the People’s Republic – trumped hopes for a solution to Dublin’s debt problems and some positive US economic data overnight. However, Chinese stocks rallied sharply into the close, finishing up 0.8 per cent, possibly on a report that Beijing would release soybeans and vegetable oils from the state reserves. The FTSE Asia-Pacific index was down just 0.04 per cent with Japan’s 225 Nikkei Average up 0.1 per cent and South Korea’s Kospi Composite 0.7 per cent higher. Hong Kong’s Hang Seng index was up 0.2 per cent, rebounding alongside its mainland cousin. The euro was up 0.2 per cent against the dollar at $1.3672 as traders awaited further developments on an Ireland bail-out. On Thursday, Wall Street bounced back from several weak sessions as traders took heart from the likelihood that Ireland would agree to a bail-out, thereby, supposedly, reducing the chances of further eurozone sovereign debt contagion. The S&P 500 index rose 1.5 per cent, while the Vix index, which measures expected market volatility and is considered a gauge of investor anxiety, fell 14 per cent to 18.8.
Asian fears about inflation were again rattling investors, reports the FT’s global market overview. The FTSE All-World index was down 0.2 per cent and commodity prices were falling as traders fretted over the monetary response to burgeoning price pressures in many “emerging” markets. The S&P 500 futures contract was down 0.6 per cent and Treasuries were rallying. China is the fulcrum of these worries. The Shanghai Composite was down 3 per cent, taking its losses over the past three sessions to more than 7 per cent, as investors become increasingly concerned about Beijing’s attempts to cool demand. The FTSE Asia Pacific Index was down 0.2 per cent. Adding to the fall in Shanghai were Japan’s Nikkei 225 Stock Average, down 0.3 per cent, and South Korea’s Kospi Index, off 0.8 per cent. The Hang Seng in Hong Kong was off 0.1 per cent. The dollar was weaker as investors reacted to comments from William Dudley, New York Federal Reserve president, who said the exit from the central bank’s ultra-loose monetary policy “could be years away”. The dollar was off 0.2 per cent on a trade-weighted basis to 78.49. Against the euro, the buck was down 0.2 per cent to $1.3617 as the single currency received some respite from recent eurozone sovereign debt worries.