Mixed Trading on Equity Markets, as the BOJ Nominees Expressed Dovish Views in Their Testimonies

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Japan markets have recently climbed, but Chinese stocks have lagged amid Alibaba Group’s and NetEase’s tech earnings.

The Nikkei 225 index opened slightly higher on February 24th, up 0.1 per cent to 27,144. In testimony in front of Japan’s Parliament, the nominees for Bank of Japan (BOJ) governor and deputy governors reiterated their stance that current monetary easing policies are appropriate and should remain unchanged.

In Parliament, BOJ Governor nominee Ueda reiterated that “current monetary easing is appropriate and that there was no need to change the Joint Statement.”

BOJ Deputy Governor nominee Himino noted that it was necessary to “watch the economy without preconceptions and that the current policy is appropriate.”

BOJ Deputy Governor nominee Uchida also reiterated his stance on continuing the monetary easing. 

The statements from the BOJ’s nominees suggest that the central bank will remain flexible with its policies but may not necessarily make any drastic changes.

Meanwhile, the ASX 200 opened flat at 7,284 early on February 24th. Australia sold A$600 million in 2.75 per cent November 2029 bonds with an average yield of 3.761 per cent and a bid-to-cover ratio of 3.29x. The underlying cash deficit for the seven months to January was A$28.4 billion.

The Reserve Bank of New Zealand’s Governor, Adrian Orr, held a speech on March 3rd, with the comments focusing on sustainable growth and productivity. 

A clear indication of the RBNZ’s next steps could significantly impact the direction of markets in Australia and New Zealand. 

Japan also released its January national consumer price index (CPI) figures. The CPI, which measures the change in the prices of goods and services purchased by households, was 4.3 per cent higher year-on-year, unchanged from the previous month’s figure. The core CPI, excluding fresh food prices, rose 4.2 per cent, slightly lower than expectations of 4.3 per cent.

Japan has been continuing to buy foreign bonds at a rapid pace. According to data released by the Japanese government, in the week ending February 17th, Japan invested ¥2.7 trillion into foreign bonds. 

Overall, the market sentiment remains positive, with investors hoping for more stimulus measures ahead under the new BOJ Governors’ leadership.  

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