BANGKOK – World stock markets were mixed Tuesday after Japan’s central bank promised open-ended monetary easing like the U.S. Federal Reserve but said it won’t start for a year.
The Bank of Japan concluded a two-day policy meeting by setting a 2 per cent inflation target and announcing open-ended asset purchases that will pump money into the financial system.
Prime Minister Shinzo Abe has been pressuring the central bank to take aggressive new measures to reverse years of economically debilitating deflation.
Markets appeared underwhelmed by the BOJ announcements. Analysts at Capital Economics called the asset purchase program “pretty timid” since it will not be introduced until January 2014. An existing asset purchase scheme will continue until then. The yen rose against the dollar as expectations of significantly easier monetary policy in the near term were diminished.
European stocks were muted in early trading. Britain’s FTSE 100 was nearly unchanged at 6,180.74. Germany’s DAX lost 0.1 per cent to 7,7376.81. France’s CAC-40 fell 0.1 per cent to 3,759.70.
Stocks on Wall Street, which was closed Monday for a public holiday, appeared set for gains. Dow Jones industrial futures rose 0.1 per cent to 13,587 and S&P 500 futures added 0.1 per cent to 1,480.80.
Japan’s Nikkei 225 index shed 0.4 per cent to close at 10,709.93 after a day of volatile trading. Markets elsewhere were less affected by events in Japan, and less cautious.
Australia’s S&P/ASX 200 rose marginally to 4,779.10. Hong Kong’s Hang Seng reversed morning losses to rise 0.3 per cent to 23,658.99. Mainland Chinese shares fell. The Shanghai Composite Index lost 0.6 per cent to 2,315.14. The smaller Shenzhen Composite Index lost 1.4 per cent to 928.90.
“The losses were a technical correction. There is some room for gains in the near future based on the brighter economic outlook,” said Peng Yunliang, an analyst based in Shanghai.
China Vanke, the country’s biggest real estate developer by market value, gained 5.7 per cent after announcing plans to shift trading of its foreign-currency shares to Hong Kong.
South Korea’s Kospi rose 0.5 per cent to 1,996.52 after Finance Minister Bahk Jae-wan said the country will help exporters struggling with the rise of the won, Yonhap News Agency said.
The remarks come amid worries that quantitative easing moves by the U.S. and Japan could result in the further appreciation of the Korean currency.
The announcement helped some of the country’s key exporters, including Samsung Electronics, which rose 1.8 per cent. Hyundai Motor Co. rose 1.9 per cent.
U.S. stock and bond markets were closed Monday for Martin Luther King, Jr. Day, which coincided with the inauguration ceremonies that launched President Barack Obama’s second term in office.
Concerns linger about the U.S. economy, with lawmakers wrangling over spending cuts and the nation’s debt ceiling, which limits the amount of debt that the government can take on. The government has hit its $16.4 trillion debt limit and is expected to run out of ways to meet all of its obligations around March 1, perhaps earlier.
Although Republican lawmakers were expected to accept a temporary increase, a final deal is still not in sight.
Gary Yau of Credit Agricole CIB said that “any further news on the US debt ceiling after Obama’s inauguration will again be closely scrutinized.”
Benchmark oil for February delivery was down15 cents to $95.41 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 9 cents to settle at $95.56 a barrel on the Nymex on Monday.
In currencies, the euro rose to $1.3356 from $1.3320 late Friday in New York. The dollar fell to 89.03 yen from 90.03 yen.
AP researcher Fu Ting contributed from Shanghai