Japan Stocks mixed on stronger yen, global growth woes

Headline indices of the Japan share market were mixed on Thursday, 11 April 2019, as risk sentiments hurt by as a relatively higher yen against the dollar and as the latest signs of caution from global central banks about slowing economic growth. Total 19 subsectors of the total 33 subsectors of the Tokyo Stock Exchange declined, with shares in Real Estate, Banks, Iron & Steel, Mining, and Nonferrous Metals issues being notable losers, whereas Air Transportation, Oil & Coal Products, and Foods issues being notable gainers. Around late afternoon trade, the 225-issue Nikkei Stock Average edged up 0.37 point, or 0.00%, at 21,687.94. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 1.12 points, or 0.07%, at 1,606.54.

European Central Bank President Mario Draghi reiterated warnings on Wednesday that global risks continue to batter the region's economy as the ECB signaled no rate hikes for the rest of 2019, shortly after the International Monetary Fund (IMF) sharply downgraded its economic growth forecast for the euro zone economy. Interest rates on its marginal lending facility and deposit facility will remain unchanged at 0%, 0.25% and -0.40%, respectively.

 

On Tuesday, the IMF slashed its forecast for global economic growth this year, saying a slowdown could force world leaders to coordinate stimulus measures. The world economy will grow 3.3% this year, down from the 3.5% the IMF had forecast for 2019 in January, the fund said Tuesday in its latest World Economic Outlook. The IMF also sharply downgraded growth in the euro zone. It now expects the bloc to grow at 1.3% in 2019 lower than its forecast had been six months ago.

The central bank's Federal Open Market Committee voted unanimously to not raise its benchmark rate at the March 19-20 gathering, and simultaneously indicated that it didn't see likelihood for any hikes through 2019, according to minutes from the session released Wednesday. Minutes from the Federal Reserve's March 19-20 meeting said some policymakers under certain circumstances could judge it appropriate to raise the target range for the federal funds rate modestly later this year. The Federal Reserve's decision in March to cease raising interest rates this year was driven by unease over the U.S. and global economies and surprisingly subdued inflation.

Last month the Fed aborted previous plans to keep raising a key short-term U.S. interest. Instead, Chairman Jerome Powell reiterated the Fed would remain patient, with the central bank's closely watched dot plot pointing to no increase in interest rates for 2019.

ECONOMIC NEWS: Japan M2 Money Stock Up 2.4% On Year In March -- Japan M2 money stock was up 2.4% on year in March, the Bank of Japan said on Thursday - coming in at 1,012.7 trillion yen and unchanged from the previous month's reading. The M3 money stock climbed an annual 2.1% to 1,344.7 trillion yen. The L money stock advanced 2.4% on year to 1,794.0 trillion yen, up from the 2.1% increase in February.

CURRENCY NEWS: The Japanese yen, widely viewed as a safe-haven currency, appreciated against the dollar on Thursday, as investors turned risk-averse in view of a looming U.S.-European Union trade war. In the wake of the United States and the European Union showing their readiness to slap fresh tariffs on each other over subsidies to aircraft makers, the dollar slipped below 111 yen level. The dollar was quoted at 110.99-111.00 yen compared with 110.97-111.07 yen in New York and 111.18-19 yen on Wednesday in Tokyo.

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