GLOBAL MARKETS-BoJ bond buying pressures yen; U.S. stocks rise

Mon Apr 8, 2013 3:03pm EDT

* Yen touches multi-year lows vs dollar and euro
    * Nikkei index soars to highest since August 2008
    * Asia, European and U.S. stocks improve


    NEW YORK, April 8 (Reuters) - The yen dropped 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, boosting stocks in most markets,
though U.S. gains were limited ahead of quarterly earnings
reports.   
    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 99.17 yen, up 1.3 percent, while
the euro added 2.3 percent to trade at about 129 yen.
    Japan's Nikkei share 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 0.3 percent
to 356.50 after registering its worst week of the year on Friday
with a five-day loss of 1.26 percent.

    EQUITY INVESTORS SKITTISH ON EARNINGS 
    Wall Street dipped in early trading as caution ahead of the
beginning of the quarterly earnings season dominated sentiment,
but stocks turned up moving into the close. But the gains were
mostly positioning ahead of what is likely a lackluster
corporate earnings season and an economy that could be hitting a
slow patch.
    The Dow Jones industrial average was up 9.83 points,
or 0.07 percent, at 14,575.08. The Standard & Poor's 500 Index 
 was up 4.91 points, or 0.32 percent, at 1,558.19. The
Nasdaq Composite Index  was up 8.20 points, or 0.26
percent, at 3,212.05. 
    Earnings forecasts have been scaled back heading into the
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.
Last week, however, the S&P 500 posted its largest weekly
decline this year
    "We're waiting for earnings for evidence that the market can
be supported at these levels," said Jim Dunigan, chief
investment officer at PNC Wealth Management in Philadelphia. "We
will see growth in earnings, but clearing the expectations bar
could be difficult, which could give us reason to pause."
    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. 
    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
1.729 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
$104.72, up 0.6 percent. U.S. crude rose 69 cents to
$93.39 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 $7,471.505 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.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.