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

Mon Apr 8, 2013 4:28pm 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, with
U.S. stocks gaining ahead of an earnings season expected to show
modest growth.
    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. 
    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. 
    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.
    Stocks have rallied strongly this year with major indexes
hitting record highs.
    "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."
    The Dow Jones industrial average was up 47.31 points,
or 0.32 percent, at 14,612.56. The Standard & Poor's 500 Index 
 was up 9.66 points, or 0.62 percent, at 1,562.94. The
Nasdaq Composite Index  was up 18.41 points, or 0.57
percent, at 3,222.26. 
    Among the day's most active names, Advanced Micro Devices
 jumped 13 percent to $2.59 and was the S&P 500's biggest
percentage gainer.
    
    BOJ EASING DRIVES UP JAPANESE SHARES
    In Tokyo, Japan's Nikkei share average jumped as
much as 3.1 percent on Monday to its highest level since August
2008, following the promise by BoJ Governor Haruhiko Kuroda on
Thursday to inject about $1.4 trillion into the economy in less
than two years. Since then the yen has fallen more than 6
percent against both the dollar and the euro, while Japanese
stocks have soared
    "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 dollar traded at 99.32 yen, up 1.5 percent, while
the euro added 1.9 percent to trade at about 129.13 yen
.
    "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 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 0.4 percent
to 356.91 after registering its worst week of the year on Friday
with a five-day loss of 1.26 percent.
    Last week, the S&P 500 posted its largest weekly decline
this year. Even so, the S&P 500 is up nearly 9 percent for the
year so far, while the Dow has gained just under 11 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. 
    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
1.748 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.    
    
  
    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
$104.95, up 0.6 percent. U.S. crude rose 86 cents to
$93.55 a barrel after logging its biggest weekly loss in
more than six months last week.
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