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Not for the first time, the BOJ spite the hype
There were high expectations from the BOJ at today’s meeting, yet what they delivered was a nothing burger. That is classic BOJ!
Why the Nikkei uptrend looks set to resume
Leading the recovery in Asian stock markets yesterday, the Nikkei 225 finished the day 2.08% higher at 28517, boosted by strong gains in semiconductor stocks, including Tokyo Electron and Advantest.
Nikkei 225 Index: Have we seen this chart before?
If the Nikkei 225 is going to move higher, it may look like the recent price action in GBP/USD!
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Nikkei's Break To New Highs Puts USD/JPY On The Radar
Renewed trade optimism and strong earnings saw Asian shares break higher. With Nikkei 25 breaking a new cycle high, we're closely watching USD/JPY to see if it follows suit.
USD/JPY may follow Nikkei’s big breakout after Japanese elections
Underscoring investors’ insatiable appetite for risk, Japan’s main Nikkei index rose for the 14th consecutive day, which was one the longest winning streaks ever recorded. The USD/JPY, which tends to rise and fall in tandem with stocks, also gained ground, helping the Dollar Index to break its two-day losing streak.
Market Review & Outlook: Stimulus Talk Moves Markets
With central banks in renewed stimulus mode and market concerns over Brexit consequences having increasingly faded into the background, this past week has largely been one of expanded risk appetite for global financial markets.
Nikkei: Will the BOJ come to the rescue?
Global equities and crude oil prices have endured another wild session today, with both assets moving more or less in tune with one another. Oil prices have been pushing higher in recent days on speculation about Russia meeting with the OPEC to discuss a possible cut in oil production in an effort to shore up prices. Today, both Brent and WTI prices surged higher after Russia appeared to confirm the news. As my colleague James Chen reported earlier, the Russian oil minister was quoted as saying that Saudi Arabia has proposed a 5% reduction in output by each oil-producing nation, with the deal to be discussed in a meeting among oil and energy ministers of both the OPEC and non-OPEC. Brent spiked to $35.80 and WTI to $34.80. The rally then lost momentum after bullish traders took profit and as another report contradicted the earlier one. Even if there is truth in the matter, it remains to be seen if the deal will actually happen. For a start, Iran will oppose any cuts to its production, having just had its sanctions lifted. Will Saudi and Russia be willing to concede market share to Iran? I doubt it. US share producers will also be happy if Russia and the OPEC did actually cut production; they will simply fill the gap. So, there are serious question marks about this potential deal. But if the deal were to be made, it would most likely provide oil prices only a short term boost. For a longer-lasting stability in the oil market, we will need to see a significant rise in demand growth and/or a meaningful drop in US oil production. If the OPEC and Russia were to help support oil prices, why would US oil companies stop production?
USD/JPY bouncing, but skepticism remains below 118.60 barrier
Earlier today, my colleague Fawad Razaqzada discussed the Nikkei 225 and whether Japan’s most widely-followed stock market index was forming a double bottom or merely seeing an oversold bounce. While the correlation is not perfect (no intermarket correlation is!) that bourse and many other equity indices are closely correlated with USD/JPY.
Nikkei: double bottom reversal or just an oversold bounce?
As we reported earlier today, crude oil is currently driving almost everything at the moment. In particular, it has been correlating positively with the equity markets due to oil’s obvious impact on the energy stocks. So, when oil prices bounced back from the key $30 handle today, the severely oversold energy stocks jumped and global indices and index futures have correspondingly rallied. US markets have been supported further by forecast-beating earnings from JPMorgan, which has lifted hopes that the rest of Wall Street banking giants will also provide positive or at least better-than-expected numbers over the next several days.
#TemporadaDeGanancias del Q4 de #Amazon 📈 💻 AMZN publicará este jueves 2 de febrero las ganancias de Q1 después del cierre de los mercados estadounidenses. Descubre más sobre el presente de la empresa y qué esperar de las acciones de #AMZN 👇 📲 https://t.co/y2I0mIg8mY https://t.co/FPZyWujQOI
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