Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: BOJ Press Conference
WHAT WE’RE WATCHING TODAY:
BOJ Holds Off Boosting Stimulus as Economic Recovery Seen
The Bank of Japan has held back adding extra stimulus as policy makers said the world’s third-biggest economy can maintain a recovery even with last week’s increase in the sales tax. Governor Haruhiko Kuroda maintained a pledge to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen ($681 billion) per year. The economy has continued to recover moderately, albeit with some fluctuations due to the consumption tax hike, according to the BOJ. While the central bank highlighted a pickup in private investment and increasing industrial production, economists predict that the BOJ will boost stimulus by July when the strength of an economic rebound will become clearer. The BOJ is gauging the extent of an anticipated setback to the economy and prospects for achieving its 2 percent inflation goal after last week’s 3-percentage-point increase in the sales tax, the first since 1997. The price goal excludes the effects of changes in the sales tax. Kuroda has stated that Japan won’t see a repeat of the recession that followed the sales tax increase in 1997, pointing to Japan’s now-stronger financial system and an absence of a regional financial crisis that hurt the country’s exports then. The yen weakened after the announcement, trading at 102.96 per dollar in Tokyo, up 0.1 percent. The Topix index, which has climbed 6.8 percent over the past year, fell 1.7 percent, down for a third day after technology shares extended a retreat.
UK Economic Recovery ‘Not Yet Secure’
The UK’s recent economic growth might be short term and recovery is “not yet secure”, according to the British Chambers of Commerce (BCC). Recovery could stall as it relies on consumer spending, while personal debt levels are said to be too high. The BCC’s economic survey for the first quarter found that UK export orders and sales in services were at all-time highs and that manufacturing was growing consistently but challenges persist despite the progress. UK growth is still reliant on consumer spending, driven by a resurgent housing market and a declining savings ratio. Personal debt levels need to fall and it will be hard to maintain growth in the medium term without significant structural changes to the UK economy. Britain’s current account deficit was the largest in the G7 group of major industrialised nations, and could pose long-term risks if left unchecked. On Monday, Chancellor George Osborne announced further measures to help boost British exporters which would make it much less risky for banks to lend to exporting firms.
Tech Stocks Sell-Off Penetrates Through World Markets
Growing concerns over technology stocks weighed hard on stock markets around the world early this week. The latest bout of nerves started last Friday when mainstays of the Internet economy such as Google, which has surged over the past year, was hammered as investors had a change of heart and decided prices were too high. The technology-heavy Nasdaq dropped 2.6 percent on Friday, its biggest one-day drop since February. It was down a further 1.4 percent Monday at 4,072. In Europe, the FTSE 100 closed down 1.1 percent at 6,622.84 while Germany’s DAX fell 1.9 percent to 9,510.85. The CAC-40 in France ended 1.1 percent lower at 4,436.08. In the U.S., the Dow Jones industrial average was down 0.8 percent at 16,278 while the broader S&P 500 index fell 1 percent to 1,847. Renewed concerns over Ukraine also unsettled investors, particularly in Europe where investors will be looking for further clues on the economic outlook later today.
That sums up today’s highlights! Remember to keep in touch via our Facebook, Twitter, Google+ and LinkedIn pages for all the latest news and developments in the financial markets today.
We hope you have a profitable day on the markets!
