Asian stocks win as BOJ defends extremely easy stance, oil loosens for Shanghai lockdown

FILE PHOTO: A man wearing a protective mask in the midst of the coronavirus epidemic (COVID-19) walks past a billboard showing Shanghai Composite, Nikkei index and Dow Jones Industrial Average outside a Tokyo brokerage, Japan, March 7, 2022 REUTERS / Kim Kyung-Hoon

March 29, 2022

By Selena Li

HONG KONG (Reuters) – Japanese stocks led to gains in Asian stocks on Tuesday as the Bank of Japan defended its extremely easy stance as oil fell amid fears of lower demand from China as Shanghai implemented a “strategy”. zero COVID ”closing despite the relatively modest case load.

The Japanese Nikkei gained 0.91% at the beginning of trading, while the broader Asia-Pacific stock index of MSCI outside Japan rose 0.64%.

The BOJ has pledged to keep monetary policy extremely loose, offering to buy unlimited government bonds for the first four days of this week to prevent rising yields in Japan as elsewhere, following the US Federal Reserve’s move to increase interest rates. growing inflationary pressures.

Yields on 10-year Japanese government bonds hovered close to the Bank of Japan’s 0.25% yield target, even after the central bank seldom moved to enter the market for a second day.

However, trading remained volatile. Investors will favor markets that are lagging behind the Fed raising interest rates, trading in a “day-to-day trading mindset” and market noise and short-term growth, said Chi Lo, APAC senior market analyst at BNP Paribas Asset Management.

“There really is no middle ground in the market either,” he added.

The BOJ’s action left the yen fighting for stability on Tuesday, after its worst session in 16 months.

The Japanese currency fell as much as 2.4% to 125.10 against the dollar overnight, the lowest level since August 2015, before recovering to 124.24 in volatile morning trading in Tokyo.

Meanwhile, oil fell further on Tuesday as the market expects China to suffer from a slowdown in the economy as it battles a new coronavirus outbreak.

US crude was down 1.04% at $ 104.86 a barrel and Brent was down $ 111.09, down 1.24% on the day. The Shanghai Economic Zone reported a record 4,381 asymptomatic COVID-19 cases and 96 accidental cases as of March 28 – a limited number of cases. according to world standards.

“Certainly commodity markets will not be comfortable in the short term with China closing,” Lo said, adding that many of the players estimate growth of less than 5% this year for the economy, which he said is “very pessimistic” against expectations. stronger stimulus.

The CSI300 stock index fell 0.52%, while in the offshore market, Hong Kong’s Hang Seng index rose 0.54%.

The Australia S & P / ASX 200 index fell 0.8% at the beginning of trading, despite the stronger-than-expected retail sales data.

Yields on 10-year US Treasury bonds remained stable at 2.4696%, slightly changing the day due to the cessation of the sharp sell-off observed in recent days.

The US government yield curve, as measured by the gap between the five- and 30-year yields, reversed on Monday for the first time since early 2006.

“I think this is a macroeconomic signal that there is a risk of a recession along the way, which the Fed acknowledges. But I think at this point, the recession is not on everyone’s mind. It’s on the radar, “said Lo of BNP.

The gold spot rose 0.2% to $ 1,926.52 an ounce.

(Edited by Simon Cameron-Moore)

Asian stocks win as BOJ defends extremely easy stance, oil loosens for Shanghai lockdown

Source link Asian stocks win as BOJ defends extremely easy stance, oil loosens for Shanghai lockdown

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