por admin » Jue Jun 16, 2016 8:35 am
Global Stocks Fall as Bank of Japan Stands Pat
A brief recovery in global stock markets was derailed Thursday after Japan’s central bank dashed hopes for additional monetary easing, sending shares down while the yen and gold rose to their highest levels this year.
Futures pointed to a 0.5% opening loss for the S&P 500, following Wall Street’s longest losing streak since February. Changes in futures don’t necessarily reflect market moves after the opening bell.
The Stoxx Europe 600 dropped 0.8% in afternoon trading with bank shares hitting new lows, following a downbeat lead from Asian markets.
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The Bank of Japan’s decision to leave policy unchanged at its meeting Thursday added to a host of concerns investors have grappled with in recent sessions, including a coming U.K. referendum, an unclear path for U.S. interest rates, and mixed data on the world economy.
“We’re close to peak uncertainty,” said Neil Robson, portfolio manager at Columbia Threadneedle Investments. “Brexit [risk] is adding to this really low interest-rate, really low growth malaise.”
The Nikkei Stock Average sank 3.1% after the Bank of Japan left its monetary policy unchanged, lifting the yen, thereby reducing the competitiveness of Japanese exporters. Some economists were expecting the bank to increase its purchases of exchange-traded funds or Japanese government bonds amid a strengthening in the local currency and persistent weakness in inflation.
The dollar fell over 2% against the yen to ¥103.5800, its lowest level since 2014. “We are extremely concerned about currency movements,” said Yoshihide Suga, Japan’s Chief Cabinet Secretary, describing them as “volatile, one-sided and speculative.”
Meanwhile, in Europe, fresh polls added to concerns about a June 23 U.K. vote, weighing on risk assets and the British pound while supporting the yen, gold and government bonds.
“The market is clearly showing us today how we would react to an exit,” said Philippe Gijsels, Chief Strategist at BNP Paribas Fortis. ”The question is how much [Brexit uncertainty] is already priced in.”
European stocks have lost 5.8% from a week ago, while the Stoxx Europe 600 Banks index has fallen 8.7%. Investors are concerned a U.K. exit could presage a period of uncertainty for banks operating in the region.
Bank of Japan Governor Haruhiko Kuroda pictured Thursday as the central bank left its monetary policy unchanged.
Bank of Japan Governor Haruhiko Kuroda pictured Thursday as the central bank left its monetary policy unchanged.Photo: Reuters
Thursday’s moves came a day after the U.S. Federal Reserve kept interest rates unchanged as expected and lowered its forecasts for short-term rate rises in the coming years.
“I can’t specify a timetable,” about when rates will next be raised, Chairwoman Janet Yellen told reporters following the Fed’s two-day policy meeting. “We are quite uncertain about where rates are heading in the longer term.”
U.S. stocks held gains after the decision, but reversed course late in the session to conclude a fifth consecutive day of declines.
The Labor Department said Thursday U.S. consumer prices rose in May for the third straight month, a sign that inflation may be firming. Separately, the Labor Department also said jobless claims rose last week but remained at a level consistent with employment growth.
In commodities, oil prices continued to retreat, with Brent crude dropping 1.4% to $48.28 a barrel and copper sinking 2.1% to $4,545 a ton.
As investors sought safety, gold rose to $1,316.80 an ounce, its highest level this year. German 10-year government bond yields fell to a new all-time low of -0.033%, while 10-year Treasury yields dropped as low as 1.538%. Yields move inversely to prices.
In the U.K., 10-year government debt yielded 1.080%, while the pound fell 0.5% against the dollar to $1.4129 as polls continued to portray a tight vote.
Elsewhere, stocks in Hong Kong fell 2.1%, while shares in Shanghai and Australia ended slightly lower.
—Mitsuru Obe contributed to this article.