London’s FTSE 100 is expected to start Wednesday is positive territory, extending this week’s winning streak, though attentions aren’t far from Central Bank machinations.
The Bank of Japan has today decided to leave rates unchanged – already at 0.1% there’s not much wiggle room – but, boosted markets with some other manoeuvres.
It will now focus on ‘yield curve control’ over the long term, rather than have targets measured against the base interest rate itself. This has a stimulus element, whereby the BoJ will purchase long-term government bonds so that yields stay around current levels of zero percent.
With the Nikkei rising just over 1.5%, to 16,743, traders welcomed the news.
Many more eyes will be on the US Federal Reserve later today, indeed the American policy meeting has been the subject of speculation and anticipation for a number of days.
The big question is whether the central bankers will think the US economy has recovered sufficiently for interest rates to rise for the second time in the past nine months.
“If the narrative of the last few weeks has been any sort of guide it is clear that the FOMC is split down the middle as to whether rates should be raised, and it is highly likely that whatever decision is arrived at there will probably be some dissent, “said Michael Hewson, analyst at CMC Markets.
On the fence, Wall Street benchmarks barely moved on Tuesday with the Dow Jones and S&P 500 closing just 0.05% and 0.03% higher for the trading day, closing at 18,128 and 2,138 respectively.
The Nasdaq index, meanwhile, was only slightly more active as it added 0.12% to end the session at 5,241.
In London, CFD and financial spreadbetting group IG Markets predicts a similar start to trading.
It sees the FTSE 100 up around 15 points, calling the benchmark at 6,848 to 6,852 about an hour before the start of Wednesday’s session.
Story by ProactiveInvestors