Asian markets traded higher after the BoJ expanded its JPY 20 trillion bank loan facility to JPY 30 billion as a strengthening yen threatens the recovery. (See RGE critical issue: Is Yen Intervention in the Offing?). Markets, however, pared back some of their gains as the size of the increase disappointed.
The MSCI Asia Pacific Index rose 0.2% to 117 led by material producers, while the MSCI ASIA APEX 50 rose 0.9% to 740.
In Japan, stocks advanced as the central bank increased the size of its liquidity facility. The Nikkei 225 gained 1.8% to 9,149. Technology (up 2.64%) and industrials (up 1.94%) led the gains. Canon rose 2.4% while Honda gained 1.6%.
In Hong Kong, stocks also gained led by basic materials (up1.71%) and technology (up 1.51%). The Hang Seng Composite gained 0.7% to 20,737. China Shenhua gained 1.77% while Cnooc rose 1.67%.
In mainland China, stocks advanced led by commodity producers and consumer stocks. The Shanghai SE Composite was up 1.6% to 2,653. Consumer stocks rose after news reports that officials expect consumer prices to reach a peak of 4% this year in September. Jiangxi Copper jumped 5.4%.
In India, the BSE SENSEX 30 rose 0.2% to 18,032 led by basic materials (up 1.99%) and telecom (up 1.82%).
In Australia, the S&P/ASX 200 index advanced 1.9% to 4,453, while in Korea the KRX 100 also rose 1.9% to 3,707. BHP rose 1.5% while Rio Tinto gained 2.5%.
In Asian trade, the yen led a broader currency gain up 0.06% to 84.62 while the Aussie dollar advanced 0.96% and the New Zealand kiwi rose 0.57%.
10-year JGBs fell with the yield up 2 bps to 1.029%. Sovereign CDS spreads narrowed across the region with the Korean 5-year spread up 7 bps to 118 bps. Corporate spreads also narrowed in the region with the Markit iTraxx Asia ex-Japan 50 IG down 2 bps to 136 bps and the iTraxx Japan index down 3.1 bps to 109 bps.
Click Table to Enlarge
All rights reserved, Roubini GlobalEconomics, LLC