eBusiness Weekly
Asian equities built on the best start to a year since 2006 as Japanese traders returned from a holiday following new all-time highs for U.S. shares. The yen climbed in an apparent reaction to the Bank of Japan trimming bond purchases in one of its regular operations.
Japanese shares pared their gains after the yen’s advance in wake of the announcement by the BOJ, which made a small tweak to its buying of longer-dated debt. While a number of analysts do anticipate the central bank to tweak its stimulus program this year, Governor Haruhiko Kuroda has repeatedly emphasized there’s no shift on the immediate horizon.
Shares from Sydney to Hong Kong were modestly higher after the S&P 500 Index eked out a fresh closing high. Declines at Samsung Electronics Co. in wake of its profit announcement weighed on South Korea’s equity index. Earnings will continue to be a focus as the week goes on, with financial firms including JPMorgan Chase & Co. and Wells Fargo & Co. on the schedule. The dollar’s softness last year may reverberate for some, as it did negatively for Samsung.
The yen rose 0.4 percent against the dollar after the BOJ cut its purchases of government bonds maturing in more than 10 years by 10 billion yen ($88 million) compared with operations last month.
Signs of financial-market stress continue to abate at the start of 2018 amid optimism that lower U.S. taxes and a broadening global economic recovery justify record high prices for global equities. In Europe, data showed confidence in the euro area continued its advance at the end of 2017. At the same time, the euro has been restrained by concerns about Germany’s continued struggle to form a government.
“This environment of strong global growth and contained inflation is actually a great environment for Asian equities, including tech,” said Ajay Kapur, head of Asia Pacific and global emerging market strategy at Bank of America Merrill Lynch in Hong Kong, in an interview with Bloomberg TV. “On the margin you will get hurt a little bit on the currency,” as seen with Samsung, but demand for tech companies’ products remains good, he said. – Bloomberg
