Share Market: Central Bank of Japan kept its negative interest rate unchanged, this action was seen in shares
[ad_1]
Bank of Japan (BOJ) kept its lending policy unchanged on Tuesday and said it would keep an eye on price and wage trends before raising its negative interest rate. The same decision was expected from BOJ. However, investors and analysts believe that the central bank is taking steps towards change due to price rise, due to which inflation has remained above its two percent target. After the BOJ’s decision on Tuesday, the US dollar gained against the Japanese yen and stock prices rose. The policy rate of negative 0.1 percent is aimed at encouraging banks to lend more and businesses and consumers to borrow more to boost the world’s third-largest economy. Inflation has increased in Japan but at a much slower pace than in the US, and the US dollar has appreciated against the Japanese yen. Due to this, the purchasing power of the yen has decreased, due to which the cost of energy and other goods has increased. The reason for the rise of the US dollar against the Japanese yen is due to increasing rates to combat inflation.
Government spending flat in Japan
BOJ Governor Kazuo Ueda is cautious about raising rates. They say that wage growth has lagged behind rising prices and the inflation target cannot be achieved. The central bank said in a statement that housing investment remains weak and government spending is flat. The BOJ said in the statement that despite extreme uncertainties regarding economies and financial markets at home and abroad, the bank will patiently continue monetary easing. The central bank is reviewing its strategy, but will not be in a hurry to abandon its current stance of quantitative easing.
This action was seen in the Japanese market
Tokyo’s Nikkei 225 index rose 1.4% to 33,219.39, as expected. The dollar rose against the yen from 142.79 to 143.75 yen. In Sydney, the S&P/ASX 200 rose 0.8% to 7,489.10, while South Korea’s Kospi rose 0.1% to 2,568.55. Hong Kong’s Hang Seng index fell 1% to 16,469.32 and the Shanghai Composite index rose less than 0.1% to 2,932.39. Bangkok’s SET slipped 0.2%, while Taiwan’s Taiex fell 0.4%. On Monday, the S&P 500 rose 0.5% to 4,740.56 and the Nasdaq Composite rose 0.6% to 14,904.81. The Dow Jones Industrial Average was essentially flat at 37,306.02 after most of its 0.2% gain had faded by late afternoon. Retailers and big technology companies were among the big gainers. The biggest gains among S&P 500 stocks were Amazon.com, up 2.7% and Etsy, up 4.7%. Chip maker Nvidia rose 2.4%, while Meta rose 2.9% and Netflix closed 3% higher. Energy companies also rose as the price of crude jumped more than $1 amid growing concerns about attacks by Iranian-backed Houthis on shipping in the Red Sea. Oil and natural gas giant BP joined the growing list of those companies. Which has stopped the shipment in the major trade route. After agreeing to be acquired by Japan’s Nippon Steel in the U.S. Steel rose 26.1%. Pittsburgh steelmakers played an important role in the country’s industrialization. The all-cash deal is valued at about $14.1 billion, or $14.9 billion with debt. That’s almost double what rival Cleveland Cliffs had offered four months earlier.
,with language input,
[ad_2]
Source link
