World stocks maintain their healthy start to the year, on Tuesday, January 9, following a tweak to the Bank of Japan’s bond-buying program which caused the yen to rise.
MSCI’s all-country world stocks index posted another record high as Europe’s main markets shrugged off a tech wobble in Asia and instead cheered Christmas trading updates [.EU] and more forecast-beating data from Germany.
The yen rose as much as half a percent to 112.50 yen to the dollar after Japan’s central bank trimmed its purchases of long-dated government bonds, stoking speculation it could start to wind down its stimulus policy this year.
Since it adopted its yield-curve-control policy in 2016, the BoJ has occasionally tweaked its buying, but some market players seemed to take Tuesday’s move as a signal.
“It shouldn’t be perceived as a monstrous signal of the end of monetary easing but it shows that even the tiniest announcement on a quiet day can have a reaction,” said Societe Generale’s global head of currency strategy Kit Juckes.
“And it shows that when they start turning their ship around from this policy, the yen is going to go miles.”
Asian trading saw Japan’s Nikkei close at its highest since November 1991, catching up to the previous session’s gains as markets reopened after a holiday on Monday.
South Korea’s share market erased its gains and slipped 0.1 percent, dragged lower by a 3.1 percent drop in shares of Samsung Electronics Co.
