Asian shares firm ahead of Fed; yen up after BOJ

Wednesday, 14 March 2012 00:02 - - {{hitsCtrl.values.hits}}

SINGAPORE (Reuters): Asian equities hit a one-week high on Tuesday, holding firm in the wake of recent signs of improvement in the U.S. economy, while the yen rose after the Bank of Japan kept monetary policy steady.

The BOJ, which surprisingly eased policy last month, kept interest rates unchanged at a range of zero to 0.1 percent, as widely expected. It also held off from conducting any further expansion of its asset-buying programme.

Financial spreadbetters expect Europe’s main stock indexes to open roughly 0.6 percent to 1 percent higher on Tuesday, reversing the previous session’s dip.

In Asia, the dollar dipped about 40 pips or so to an intraday low of 81.97 yen after the BOJ’s decision and last stood at 82.18 yen, down 0.1 percent from late U.S. trade   on Monday.

The forex market had gotten edgy as the BOJ’s policy decision came a bit later in the day than traders had been expecting. The lack of surprises from the BOJ was enough to lend   the yen some support, market players said.

“Maybe the delay in releasing the statement added 20 pips to dollar/yen on suspicions that it (the BOJ) might do something unexpected. But in the end we didn’t expect it and we didn’t get   it,” said Rob Ryan, FX strategist at BNP Paribas in Singapore.

In the stock market, Tokyo shares pared gains, with Japan’s benchmark Nikkei finishing the day 0.1 percent higher at   9,899.08, after having crept back above 10,000 earlier in the day.

The MSCI’s index of Asia Pacific shares outside of Japan also added 1.4 percent and reached its highest since March 5 at one point after slipping on Monday because of concerns about a moderation in Chinese demand.

Australian shares rose 1.2 percent, underpinned by a recovery in the mining sector, while South Korean shares gained 1.1 percent as financial stocks rallied after having underperformed recently.

After the BOJ’s policy decision, focus now turns to the U.S. Federal Reserve’s policy statement later on Tuesday. The Fed’s stance will be closely watched, particularly after last Friday’s   data showed an encouraging gain of more than 200,000 jobs in February for a third straight month.

Recent signs of improvement in the world’s biggest economy have given a boost to the dollar and caused a rethink on how aggressive the Fed needs to be in applying further stimulus.

Gold edged up to $1,702.49 an ounce, while crude oil futures rose around 0.5 percent to $106.92 after falling on Monday on China fears and concerns about recession in Italy.