GLOBAL MARKETS-BoJ bond buying sends yen lower; U.S. stocks ease

Mon Apr 8, 2013 1:41pm EDT

* Yen touches multi-year lows vs dollar and euro
    * Nikkei index soars to highest since August 2008
    * World stocks stage recovery from Friday's selloff
    * U.S. stocks edge lower ahead of earnings season


    NEW YORK, April 8 (Reuters) - The yen slipped for a third
straight day against the dollar and the euro on Monday as the
Bank of Japan began aggressive monetary easing in an attempt to
beat persistent deflation, while U.S. stocks failed to follow
other equity markets higher.
    The dollar rallied against the yen to its highest level
since May 2009, above 99 yen, and the euro touched a three-year
peak against the Japanese currency after the BoJ conducted its
first bond purchases since announcing the new monetary easing
steps last week. 
    Since BoJ Governor Haruhiko Kuroda promised on Thursday to
inject about $1.4 trillion into the economy in less than two
years, the yen has fallen more than 6 percent against both the
dollar and the euro, while Japanese stocks have soared
    "Barring any sudden spike in risk aversion, (dollar/yen) is
likely to roll through that (100) level as momentum remains
relentless for the time being," said Boris Schlossberg, managing
director of FX Strategy at BK Asset Management in New York.
    The dollar traded at 98.87 yen, up 1 percent from
Friday's New York close, and the euro added 1.6 percent to trade
at about 128.72 yen.
    Japan's Nikkei stock average jumped as much as 3.1
percent on Monday to its highest level since August 2008.
    "The BoJ's bazooka has sparked the buying of Japanese
stocks, especially domestic sectors like real estate," said
Yasuo Sakuma, a portfolio manager at Bayview Asset Management.
    The BoJ has said it would buy 1 trillion yen ($10 billion)
of government bonds with maturities between five and 10 years,
and 200 billion yen of bonds with maturities exceeding 10 years.
    MSCI's world equity index rose 0.1 percent
to 355.97 after registering its worst week of the year on Friday
with a five-day loss of 1.26 percent.
    European shares rose, led higher by the healthcare sector,
as investors tiptoed back into the market, after a sharp drop on
Friday on the weak U.S. jobs figures. Traders noted a lack of
conviction on Monday -- evidenced by low volumes -- with some
investors apprehensive before the start of the U.S. earnings
season.
    The FTSEurofirst 300 closed up 0.2 percent at
1,164.79 points. The euro zone's blue-chip Euro STOXX 50
 advanced 0.2 percent to 2,589.25 points. 
     
    TREND FAILS
    A sense of caution dominated Wall Street on Monday. U.S.
stocks slipped, following the S&P 500's largest weekly decline
this year, as investors faced the prospect of a lackluster
corporate earnings season and an economy that could be hitting a
slow patch.
    The Dow Jones industrial average was down 37.33
points, or 0.26 percent, at 14,527.92. The Standard & Poor's 500
Index  was down 0.03 points, or 0.00 percent, at
1,553.25. The Nasdaq Composite Index  was down 1.47
points, or 0.05 percent, at 3,202.39. 
    Earnings forecasts have been scaled back heading into
first-quarter reports, which kick off this week. S&P 500
earnings are expected to have risen just 1.6 percent from a year
ago, according to Thomson Reuters data, down from a 4.3 percent
forecast in January. 
    Still, U.S. stocks have rallied this year with major indexes
hitting record highs, helped in part by the Federal Reserve's
stimulus program. The S&P 500 is up nearly 9 percent for the
year so far, while the Dow has gained just under 11 percent. 
    "It's a little easier to pull the trigger and take some
profits when you're on the fringe of an earnings season that
might not be as good as what the stock market has indicated with
a phenomenal first quarter," said Alan Lancz, president at Alan
B. Lancz & Associates Inc in Toledo, Ohio.
    The prospect that Japanese investors will move out of the
domestic debt market due to the heavy central bank buying has 
boosted the attractiveness of some European debt and demand for
U.S. Treasuries.
    The U.S. Treasury 10-year note yield fell sharply last week
in response to the new BoJ policy, but edged up on Monday to
1.7178 percent as some traders booked profits and
dealers prepared for this week's auctions of $66 billion in
longer-dated Treasury debt.
    In Europe the main beneficiary was French debt with 10-year
bond yields hitting a record low.    
    
  
    
    CHINA DATA EYED
    Oil prices were mostly higher, after hitting eight-month
lows on Friday on worries over global economic growth.
    Brent crude rose to a high of $105.55 before trading around
$104.10, little changed on the day. U.S. crude rose 39
cents to $93.12 a barrel after logging its biggest weekly
loss in more than six months last week. 
    A rise in Chinese steel futures to their highest levels in
more than a week in anticipation of improving demand in the
world's second-biggest economy during the second quarter
supported other industrial commodities like copper.
    Three-month copper on the London Metal Exchange 
climbed 0.9 percent to $7,472.755 tonne, up from an eight-month
low of $7,331.25 hit last week. The metal is still down more
than 3 percent over the past three weeks.
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