* 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
NEW YORK, April 8 The yen slumped against the
dollar and the euro for a third day on Monday as the Bank of
Japan began its boldest economic boost yet while U.S. stocks
fell, failing to follow gains elsewhere in the world.
The dollar rallied to 99 yen, its highest since May 2009,
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 new 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 settled around 98.85 yen for a gain of 1
percent from Friday's New York close, and the euro added 1.5
percent to trade at about 128.64 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 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 0.07 percent
to 355.76 after registering its worst week of the year on Friday
with a five-day loss of 1.26 percent.
But the trend failed to flow through to Wall Street.
U.S. stocks slipped, following the S&P 500's largest weekly
decline this year, ss 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 50.11
points, or 0.34 percent, at 14,515.14. The Standard & Poor's 500
Index was down 2.27 points, or 0.15 percent, at
1,551.01. The Nasdaq Composite Index was down 5.23
points, or 0.16 percent, at 3,198.63.
Defensive shares led the downside move on Monday, including
the telecommunications sector, which fell 0.8 percent.
Earnings forecasts have been scaled back heading into
first-quarter reports. 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 strongly 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
"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. Treasury 10-year note yields fell sharply last week in
response to the new BOJ policy but edged up on Monday to 1.718
percent as some traders booked profits and dealers
prepared for this week's auctions of $66 billion in longer-dated
In Europe the main beneficiary was French debt with 10-year
bond yields hitting a record low.
CHINA DATA EYED
Oil prices staged a similar recovery to equities elsewhere
in the world, rebounding more than $1 per barrel, having hit
eight-month lows at the end of last week fuelled by the worries
over global economic growth.
Brent crude rose to a high of $105.55 before trading around
$104.74. U.S. crude rose 48 cents to $93.19 a barrel
after logging its biggest weekly loss in more than six
months last week.
A rise in Chinese steel futures to their highest 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 0.7 percent to $7,457 a 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.