Japan’s currency may face continued downward pressure if policymakers move too slowly on interest rate hikes, according to the head of the Asian Development Bank . Rate Gap with US Driving Yen Weakness ADB President Masato Kanda highlighted that the wide interest rate differential between Japan and the US remains the key driver behind yen weakness. Investors continue to favour the US dollar due to higher yields The Bank of Japan risks being seen as “behind the curve” on inflation As a result, the yen struggles to strengthen even when global risk sentiment improves . BOJ’s Slow Response Raises Market Concerns Despite inflation hovering around target levels for years, the BOJ has maintained a cautious policy stance to avoid damaging Japan’s fragile economic recovery. However, markets may react negatively if: The BOJ delays rate hikes further Investors lose confidence in Japan’s poli...
The good news is that the stocks continue to edge up with S&P 500 closes 1.80 higher to 2,090.57, a record high.
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| S&P 500 edge up slightly despite oil price slump and Greece concern |
This happened even as there is a flight to safety triggered by a sell-off in Greek bonds, while crude oil prices tumbled after a short-lived bounce. Stocks in Athens plunged as much as 11.3 percent before closing down 3.9 percent, while yields on 10-year Greek bonds touched their highest since September 2013.
On the other hand, the EURO touched the lowest in nearly 29 months against the U.S. dollar.
As for Dow Jones, there is an average down of 15.48 pts to 18,038.23 while the Nasdaq composite added 0.05 points to 4,806.91.
As for the oil, the slump continues with Brent crude futures fell 2.4 percent to $58 per barrel after hitting a high of $60.43. U.S. crude lost 1.9 percent to $53.72 a barrel.
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| Crude oil continues to drop |
It is worth to take note that each time the oil market tries to pick itself up, there is another wave of selling. The market concerns on the oversupply will stay for quite a while, even as we move into 2015.
Before the Bursa opens today, it's worth to take note that each time there is a sharp drop in the oil prices, the stock market in Malaysia follow suit. Cautious trading is expected....
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