Recent findings in Tokyo show that Asian shares started the week strong as a weaker US dollar stimulated solid gains on Wall Street.
The broadest MSCI index of Asia-Pacific shares beyond the Japanese coastline is only 0.4%. Australians shares on the other hand plummet to negative, with the S&P/ASX200 index only a couple of points short of breaching the 6,000 level for the first time in almost a decade, before dropping as investors took profits.
Stock average from Japan’s Nikkei continue to perform well as it continues to experience extended gains from 1.1% to 19,769.71 by the end of the morning session, setting a 15-year high record and closing in on its own big-figure milestone.
According to Isao Kubo, Equity strategist from Nissay Asset Management, “Sentiment for Japanese stocks has been positive, and the 20,000-mark is in sight in the short term,”
The recently concluded months saw the dollar rallying on the anticipation that US Federal Reserve is preparing to increase interest rates later this year. Its strength, however, stirred some panic about music gadgets the profits of US multinational Companies. Because of this, its weakness towards the end of the previous week played a role in Friday’s gains in US shares
Last Wednesday, the greenback stumbled after the Fed came up with the decision to cut its inflation outlook and its growth forecast. Market players’ consensus expectations for the United States Central Bank’s interest rate hike have shifted. This is because most of Wall Street’s major banks are anticipating that Feds will postpone raising rates until September.
Marc Chandler, Brown Brothers Harriman chief currency strategist stated that “Due to the light economic calendar in the week ahead, the key issue facing market participants is whether the bout of profit-taking on long dollar positions is over,”
The dollar stood at ¥120.05 against the yen, nearly flat on the day and well short of Friday’s session record of ¥121.205. The euro on the other hand traded at $1.0789, low about .3% and way above a 12-year trough of $1.0457 record during the previous week.
There is also a developing concern about the fiscal woes of Greece, as it is likely to limit the euro’s accomplishments. This is despite the welcome of various European leaders of a pledge by Greece to meet demands by creditors for a number of economic reform proposals within days to release the cash needed by Athens to prevent exclusion of the Eurozone.