Asian Markets Narrow, Mixed Again. BOJ Leaves Policy Alone


Talking Points:

  • Asian markets were trendless on a largely data-free Friday
  • The Bank of Japan surprised no one by leaving its policy settings alone
  • But its Governor disappointed some by adding nothing on possible stimulus-exit plans

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Asian stocks traded mixed and rather sideways on Friday.

The Bank of Japan left interest rates alone as it was expected to. Governor Haruhiko Kuroda didn’t say anything very radical in his post-meeting press conference either, but the US Dollar got a further boost against the Yen after he declined to go into any details about possible exit strategies from extraordinary monetary stimulus.

The Nikkei ended up 0.6%, with Australia’s ASX up by 0.2%. The Kospi was off by just 0.01% and the Shanghai Composite shed 0.2%.

The US Dollar got a degree of support from some upbeat employment data on Thursday. The Labor Department said that initial claimant numbers for unemployment benefits fell 8,000 to 237,000 for the week of June 10. That was well below the 242,000 which markets had expected. The New Zealand Dollar held steady on a report from its homeland suggesting that manufacturing selected a higher gear in May.The Euro got a boost as the European session got under way, possibly on news that Greece had reached a deal with its creditors to secure the release of more bailout funding.

Crude oil prices ticked up but remain near six-month lows, held down by enduring supply overhangs and worries about the effect of supply cuts.

The gold price meanwhile edged down to three-week lows as Thursday’s economic numbers showed a larger-than-expected fall in the number of Americans filing for unemployment benefits.

The remainder of Friday will offer investors news of final Eurozone consumer prices for May, US housing starts and the University of Michigan’s consumer sentiment indicator. Oil markets can look forward to Baker-Hughes count of US drilling rigs and, on the central bank front, Dallas Federal Reserve President Robert Kaplan will speak on home turf.

— Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX


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