The yen rose after the nation’s central bank offered to buy bonds for the third time in a week, while crude oil extended the worst two-day slump in four weeks. India’s Sensex was little changed ahead of a central-bank rates decision.
The yen advanced, as the Bank of Japan’s (BOJ) move to buy bonds maturing in five to 10 years highlighted concerns about the durability of Governor Haruhiko Kuroda’s massive quantitative easing. Energy companies fell the most in the MSCI Asia Pacific Index, as crude tumbled for a third day on concern US inventories are increasing. Copper led metals higher, as workers at the world’s largest copper mine vowed to start a strike. Economists expect the Reserve Bank of India will cut interest rates that are already at a six-year low.
The MSCI All-World Country Index of shares has stalled about 2 percent shy of the record high reached in 2015 as investors look for more details from the Trump administration on promised spending increases and tax cuts and, at the same time, that data continue to paint a mixed picture on the pace of inflation in developed markets. Currencies fluctuated overnight as political concerns sent the euro sliding.
“The market is likely to move sideways until there is more clarity on Trump policies,” said Alan Richardson, a Hong Kong-based investment manager at Samsung Asset Management. “Oil’s upside is capped by supply risks, and it’s unlikely to see strong earnings in the energy sector.”
The BOJ bond purchases this week bring Kuroda closer to when he runs out of easily sale-able securities to buy.
The stepped-up purchases were needed to stop 10-year yields from becoming unhinged from the BOJ’s target of around zero percent.