European markets recover as BoJ calms markets
European markets have also rebounded today.
Germany’s DAX has closed nearly 1.5% higher, while France’s CAC gained 1.9%.
Wall Street is holding its earlier gains too, where the S&P 500 is around 1% higher at midday in New York.
Bank of Japan deputy governor Shinichi Uchida’s speech overnight – saying the BoJ would not hike rates when markets are unstable – has given a proverbial “green light” to carry traders to resume shorting the yen and buying higher-yielding currencies and assets, says Matthew Weller, global head of research at FOREX.com and City Index.
He adds:
Not surprisingly, traders have reined in their expectations for BOJ tightening this year, and are now pricing in only an outside chance of any additional interest rate increases from the central bank this year.
That’s probably all from us today. Goodnight! GW
Today’s rally, and the small gains yesterday, mean the FTSE 100 has almost recovered its losses from Monday (when it fell 2%).
But as this graph shows, shares also slid last Friday after a weak US jobs report.
So far this month, the index is down around 2.3%.
