Asian stocks rose for a sixth day, while the dollar traded near a four-month low against the euro, amid speculation the Federal Reserve will unveil a bond-buying program at a policy meeting today.
The MSCI Asia Pacific Index (MXAP) added 0.2 percent as of 12:27 p.m. in Tokyo. Yields on South Korea’s three-year government bonds rose the most in four weeks after the central bank unexpectedly chose not to cut interest rates. Standard & Poor’s 500 Index futures slipped 0.1 percent.
The Fed is likely today to announce another round of bond purchases, according to almost two-thirds of economists in a Bloomberg survey. The previous two series of quantitative easing totaling $2.3 trillion have failed to revive the labor market, which Fed Chairman Ben S. Bernanke said last month is a “grave concern.”
“Markets are slightly nervous in anticipation of quantitative easing,” Lim Say Boon, chief investment officer at DBS Private Bank, said on Bloomberg Television in Singapore. “If we get QE3 then the markets, beyond this period of nervousness, are likely to rally even further.”
About nine stocks rose for every seven that fell on the MSCI Asia Pacific Index, which headed for its longest winning streak since July. Trading volumes were lower across regional benchmarks, with the number of shares changing hands 24 percent below the 30-day average on Hong Kong’s Hang Seng Index, which added 0.2 percent.
James Hardie Industries SE, a building-materials supplier that gets 67 percent of sales from the U.S. rose 0.9 percent in Sydney. Kansai Electric Power Co. and Kyushu Electric Power Co. advanced more than 7 percent on a Yomiuri newspaper report the Japanese utilities are considering a rate increase.
[h=2]Korean Rates[/h]Bond investors were disappointed in South Korea, where the central bank predicted any pickup in the global economy will be moderate. Massive stimulus would be “detrimental” to China’s long-term growth, the Xinhua News Agency wrote yesterday.
Only one out of 16 economists surveyed by Bloomberg forecast today’s Korean rate decision, while 15 predicted the benchmark would be cut by 25 basis points to 2.75 percent. Germany’s top constitutional court cleared the way for ratification of Europe’s permanent bailout fund yesterday. The Fed concludes its two-day meeting today.
“I had thought the Bank of Korea might take a wait-and-see stance ahead of the Fed meeting today, but I expect a cut next month,” said Yum Sang Hoon, a fixed-income analyst at SK Securities Co. in Seoul.
The yield on the government’s 3.25 percent bonds due June 2015 climbed eight basis points, or 0.08 percentage point, to a three-week high of 2.88 percent. Australian government bonds declined for a second day, with the yield on 10-year notes rising six basis points to 3.23 percent.
[h=2]Dollar Drops[/h]The dollar traded 0.2 percent from a four-month low against the euro. Gains in Europe’s currency were limited after Greece’s Prime Minister Antonis Samaras received the second refusal in four days from coalition partners over plans to reduce spending that are key to receiving international aid.
The dollar slid 0.2 percent to $1.2920 per euro. The greenback yesterday touched $1.2937, the weakest since May 11. The New Zealand dollar advanced 0.2 percent against the greenback, trading near the strongest in more than four months, after the nation’s central bank left interest rates unchanged. The Australian dollar gained 0.1 percent to $1.0478.
“The markets are seeing a good chance that the Fed will announce QE3 today,” Daisaku Ueno, a senior foreign-exchange and fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, a unit of Japan’s biggest listed bank, said. “That’s lending support to risk currencies like the Aussie and kiwi.”
The cost of insuring corporate and sovereign bonds in the Asia-Pacific region from non-payment fell, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan declined one basis point to 122 basis points in Hong Kong, Credit Agricole SA prices show. The index is poised for its lowest close since Aug. 2, 2011, CMA prices show.
To contact the reporter on this story: Jason Clenfield in Tokyo at [email protected]; Adam Haigh in Sydney at [email protected]
To contact the editor responsible for this story: Shelley Smith at [email protected]
The MSCI Asia Pacific Index (MXAP) added 0.2 percent as of 12:27 p.m. in Tokyo. Yields on South Korea’s three-year government bonds rose the most in four weeks after the central bank unexpectedly chose not to cut interest rates. Standard & Poor’s 500 Index futures slipped 0.1 percent.
The Fed is likely today to announce another round of bond purchases, according to almost two-thirds of economists in a Bloomberg survey. The previous two series of quantitative easing totaling $2.3 trillion have failed to revive the labor market, which Fed Chairman Ben S. Bernanke said last month is a “grave concern.”
“Markets are slightly nervous in anticipation of quantitative easing,” Lim Say Boon, chief investment officer at DBS Private Bank, said on Bloomberg Television in Singapore. “If we get QE3 then the markets, beyond this period of nervousness, are likely to rally even further.”
About nine stocks rose for every seven that fell on the MSCI Asia Pacific Index, which headed for its longest winning streak since July. Trading volumes were lower across regional benchmarks, with the number of shares changing hands 24 percent below the 30-day average on Hong Kong’s Hang Seng Index, which added 0.2 percent.
James Hardie Industries SE, a building-materials supplier that gets 67 percent of sales from the U.S. rose 0.9 percent in Sydney. Kansai Electric Power Co. and Kyushu Electric Power Co. advanced more than 7 percent on a Yomiuri newspaper report the Japanese utilities are considering a rate increase.
[h=2]Korean Rates[/h]Bond investors were disappointed in South Korea, where the central bank predicted any pickup in the global economy will be moderate. Massive stimulus would be “detrimental” to China’s long-term growth, the Xinhua News Agency wrote yesterday.
Only one out of 16 economists surveyed by Bloomberg forecast today’s Korean rate decision, while 15 predicted the benchmark would be cut by 25 basis points to 2.75 percent. Germany’s top constitutional court cleared the way for ratification of Europe’s permanent bailout fund yesterday. The Fed concludes its two-day meeting today.
“I had thought the Bank of Korea might take a wait-and-see stance ahead of the Fed meeting today, but I expect a cut next month,” said Yum Sang Hoon, a fixed-income analyst at SK Securities Co. in Seoul.
The yield on the government’s 3.25 percent bonds due June 2015 climbed eight basis points, or 0.08 percentage point, to a three-week high of 2.88 percent. Australian government bonds declined for a second day, with the yield on 10-year notes rising six basis points to 3.23 percent.
[h=2]Dollar Drops[/h]The dollar traded 0.2 percent from a four-month low against the euro. Gains in Europe’s currency were limited after Greece’s Prime Minister Antonis Samaras received the second refusal in four days from coalition partners over plans to reduce spending that are key to receiving international aid.
The dollar slid 0.2 percent to $1.2920 per euro. The greenback yesterday touched $1.2937, the weakest since May 11. The New Zealand dollar advanced 0.2 percent against the greenback, trading near the strongest in more than four months, after the nation’s central bank left interest rates unchanged. The Australian dollar gained 0.1 percent to $1.0478.
“The markets are seeing a good chance that the Fed will announce QE3 today,” Daisaku Ueno, a senior foreign-exchange and fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, a unit of Japan’s biggest listed bank, said. “That’s lending support to risk currencies like the Aussie and kiwi.”
The cost of insuring corporate and sovereign bonds in the Asia-Pacific region from non-payment fell, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan declined one basis point to 122 basis points in Hong Kong, Credit Agricole SA prices show. The index is poised for its lowest close since Aug. 2, 2011, CMA prices show.
To contact the reporter on this story: Jason Clenfield in Tokyo at [email protected]; Adam Haigh in Sydney at [email protected]
To contact the editor responsible for this story: Shelley Smith at [email protected]