Singapore, Dec. 21 (BNA): Asian stocks were trying to get into a festive mood on Wednesday, managing to make small gains as Japan’s Nikkei rose from a two-month low hit after the Bank of Japan’s sudden decision to loosen its tight reins. on government bond yields.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6%. Japan’s Nikkei fell 0.2%, recouping its previous losses by around 1%. Gold miners in Australia led a 1.3% jump for the S&P/ASX 200 Index.
Wall Street snapped a four-day losing streak overnight and S&P 500 futures rose 0.5% in Asian trade, Reuters reported.
The Bank of Japan on Tuesday widened its trading range for the 10-year government bond yield from 25 basis points on both sides of zero to 50 basis points.
This led to a jump in the yen, which spent most of the year declining due to lower yields in Japan, selling in the Japanese stock market, and selling off bonds around the world.
The resulting decline in the US dollar tested spot gold prices to six-month highs and gold miners rose. Newcrest stock is up 6% in Sydney and smaller names even more so. Global miners BHP and Rio Tinto rose 2%.
He bought spot gold at $1,816 an ounce.
“The tone is good, we’ve got our little version of a Santa Claus parade,” said Damien Rooney, a trader at Argonaut Securities in Perth, referring to the usual gains in late December as markets drift towards the end of the year.
The yen mostly held Tuesday’s big gains at 132.09 against the dollar, and traders were eyeing more losses for the greenback.
Some of the main drivers of the dollar’s gains – the weaker yen than ever, the faltering Chinese yuan and the huge rises in US yields – are beginning to shift. The euro settled at $1.0625, which is not far from last week’s highest level in six months.
Bond markets remained under pressure as the last major central bank to anchor its bond market began to loosen its iron grip on yields.
The benchmark 10-year Treasury yield rose four basis points to a three-week high of 3.722%. Japan’s 10-year yield rose 5.5 basis points to 0.45%, close to the Bank of Japan’s 0.5% ceiling.
Brent crude futures hovered at $80.24 a barrel.
SM