HONG KONG: Japanese stocks rallied again on Thursday while traders on most other markets took a breather after a strong three-day rally, while the pound edged down ahead of a Bank of England policy meeting.
The Nikkei index headed for a fourth straight gain as investors awaited details from the government of fresh stimulus after a sweeping election victory at the weekend.
But the yen clawed back some losses against the dollar and gold, considered a safe haven bet, also gained with analysts saying there remained a sense of unease on trading floors after last month’s shock vote by Britain to leave the EU.
“Investors remain very skittish and it won’t take much to rattle sentiment,” James Audiss, a senior investment adviser at Shaw and Partners in Sydney, told Bloomberg News.
Markets have surged this week on talk that central banks and governments around the world will ramp up their spending and stimulus to kick-start economic growth.
Japan’s Prime Minister Shinzo Abe is expected to unveil a new round of spending as the world’s number three economy limps along.
Reports that Tokyo will introduce so-called helicopter money — direct cash injections for the economy such as straight into consumers’ banks — were rebuffed by the government but there is still speculation such measures could be introduced.
By the break, Tokyo was up 0.8 percent up, while the dollar slipped to 104.17 yen from 104.52 yen in New York Wednesday. Gaming giant Nintendo ended the morning another 16 percent higher thanks to the huge success of its Pokemon Go game. The firm has now soared more than 60 percent in a week.
May takes reins
The Bank of England will gather later in the day for a meeting where many expect it will cut interest rates from an already record low 0.5 percent to 0.25 percent, or even zero by August as it tries to plot a course after the Brexit vote.
With the meeting hours away, the pound dipped to $1.3124 from $1.3144.
However, it is well up from the levels below $1.28 touched last week, thanks to the surprisingly quick change of leadership of the ruling Conservative party, with Theresa May taking over from David Cameron as Prime Minister.
Hong Kong was flat and Shanghai eased 0.5 percent, a day after China unveiled data showing imports and exports both fell last month, reinforcing worries about the slowing economy.
The figures bode ill for Friday’s release of second-quarter economic growth figures, which is expected to come it at a seven-year low of 6.6 percent, according to a survey by Agence France-Presse.
Elsewhere, Sydney edged up 0.3 percent and Singapore and Seoul fell 0.2 percent apiece.
On Wall Street, the Dow and S&P 500 posted new records, albeit with smaller gains than seen recently, after a Federal Reserve report described the US economy as still modestly growing with signs of a slowdown in consumer spending.
Oil prices rebounded following a 4.5 percent slump Wednesday caused by a smaller-than-forecast drop in US inventories.
In morning Asian trade West Texas Intermediate was up one percent at $45.19 and Brent added 0.9 percent to $46.67.
Key figures around 0230 GMT
Tokyo – Nikkei 225: UP 0.8 percent at 16,355.30 (break)
Hong Kong – Hang Seng: DOWN 0.1 percent at 21,309.62
Shanghai – Composite: DOWN 0.5 percent at 3,046.42
Dollar/yen: DOWN at 104.17 yen from 104.52 yen Wednesday
Pound/dollar: DOWN at $1.3124 from $1.3144
Euro/dollar: UP at $1.1097 from $1.1089
New York – DOW: UP 0.1 percent at 18,372.12 (close)
London – FTSE 100: DOWN 0.2 percent at 6,670.40 (close)