Pedestrians walk past an Abc-Mart Inc. store in Tokyo, Japan.
Japan’s currency tumbled 2.2 percent to 111.61 per dollar by 6 a.m. in New York, the weakest since January 2008. The Stoxx Europe 600 Index added 1.2 percent, Japan’s Topix index jumped the most since June 2013 and Standard & Poor’s 500 Index futures signaled the gauge may rise to a record. Yields on 10-year notes in Italy, Portugal and Greece slid at least five basis points. Russia’s ruble weakened 1 percent while stocks gained as the central bank met. Gold retreated as
much as 2.6 percent in London to the lowest price since July 2010.
The BOJ said it will increase holdings of government bonds by 80 trillion yen ($723 billion) and boost exchange-traded fund purchases to 3 trillion yen. Adding impetus to the stock rally, Japan’s public pension fund, the world’s biggest, boosted its target for equity holdings today. Exxon Mobil Corp. and Chevron Corp. are among companies reporting earnings today.
“If they wanted a big reaction in dollar-yen, they definitely succeeded,” said Niels Christensen, chief currency strategist at Nordea Bank AB in Copenhagen. “Very few were looking for new initiatives from the BOJ today, so that’s the reason we see a much a weaker yen, and also a strong increase in Japanese equities.”
Employees work on the trading floor of the Tokyo Stock Exchange in Tokyo. Japanese... Read More
Narrow Vote
In the first policy change since Governor Haruhiko Kuroda began record asset purchases in April last year, the BOJ boosted its annual target for expanding the monetary base to 80 trillion yen from 60 to 70 trillion yen before, according to a statement in Tokyo today. The board was split 5 to 4 on the decision. Only 3 of 32 economists surveyed by Bloomberg News forecast the BOJ would expand stimulus today.The yen’s biggest drop since June last year dragged South Korea’s won lower by 1.2 percent to 1,068.82. Japan is South Korea’s third-largest trading partner.
Japan’s Topix index jumped 4.3 percent, the most since June 2013, and the Nikkei 225 Stock Average closed at a seven-year high.
More than 10 shares advanced for every one that declined in the Stoxx 600, with trading volumes 27 percent greater than the 30-day average, according to data compiled by Bloomberg. The gain trimmed its decline in October to 2.4 percent, the worst month since June 2013.
BNP Profit
BNP Paribas SA (BNP), France’s largest bank, gained 3 percent after saying profit rose 11 percent in the third quarter, exceeding analysts’ estimates. Royal Bank of Scotland Group Plc, Britain’s largest taxpayer-owned lender, rose 2.8 percent after reporting third-quarter earnings that beat projections.Bank of Ireland Plc climbed 2.7 percent after saying it continued to generate capital at a “significant pace” in the third quarter after returning to underlying profit this year for the first time since 2008.
International Consolidated Airlines Group SA advanced 3.5 percent after the parent of British Airways said it boosted third-quarter earnings 30 percent.
Anheuser-Busch InBev NV (ABI) lost 3 percent after the market of Beck’s and Corona beer reported profit growth that fell short of analysts’ expectations.
Futures on the S&P 500 jumped 1.2 percent after the gauge closed 0.8 percent away from its all-time high reached in September.
About 81 percent of S&P 500 companies that have posted quarterly earnings this season have topped analysts’ estimates for profit, while 60 percent beat sales projections, data compiled by Bloomberg show.
Emerging Markets
The MSCI Emerging Markets Index rose for a fourth day, advancing 0.7 percent. The gauge climbed 3.1 percent this week, the most for the period since March. Indexes in China, Russia, India, Turkey, South Africa and the Czech Republic gained more than 1 percent.The Micex Index increased 1.2 percent, bringing this week’s gain to 6.5 percent, the best week since December 2011. Stocks gained as a weaker ruble boosts earnings prospects for exporters.
The ruble slumped to records against the dollar on seven consecutive days before a rebound yesterday, even as the central bank spent almost $30 billion on interventions this month to shore up sentiment weakened by U.S. and European sanctions over President Vladimir Putin’s role in Ukraine.
Russia Rates
Policy makers will probably increase their benchmark interest rate for the fourth time this year, bringing it to the highest level since it was introduced 13 months ago.The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong added 1.2 percent before the release of official manufacturing data tomorrow. The Shanghai Composite Index also rose 1.2 percent, capping a 2.4 percent gain in October, its six monthly advance and longest run since July 2009.
The Purchasing Managers’ Index from the National Bureau of Statistics and China Federation of Logistics & Purchasing probably rose to 51.2 in October, up from 51.1 in September. A reading of more than 50 indicates expansion.
India’s Sensex headed for a record high amid expectations Prime Minister Narendra Modi will accelerate policy changes. The jumped 4.7 percent this month, the most since June.
Gold Falls
Gold for immediate delivery tumbled 1.9 percent to $1,176.25 an ounce in London, and earlier today touched $1,167.49. The precious metal is down 4.4 percent this week and 2.6 percent this month, headed for the first consecutive monthly declines this year. Silver plunged 2.3 percent to $16.1201 an ounce, and earlier fell 3 percent to $16.0009, the lowest price since February 2010. The metal fell 5.1 percent this month.Nickel led industrial metals higher, advancing 1.6 percent to $16,031 a metric ton on the London Metal Exchange. Copper for delivery in three months rose 0.6 percent to $6,778 a ton. The metal headed for a 1.6 percent gain this month, the most since June.
West Texas Intermediate crude oil fell 0.7 percent to $80.59 a barrel in New York, declining for a second day and headed for a 12 percent monthly decline amid signs OPEC boosted production. U.K. gas prices fell the most in more than a month after Russia agreed to restore supplies to Ukraine, just as Europe enters its peak demand season. The December contract slid as much as 2.7 percent on ICE Futures Europe.
The cost of insuring corporate debt fell. The Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies fell two basis points to 66, while the region’s high-yield benchmark declined seven basis points to 357. Both measures are the lowest since they started trading Oct. 6.
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