Despite being a Japanese holiday today with the Nikkei closed for the day, early Asian trading saw stocks rise primarily on recently announced liquidity measures and speculation of forthcoming liquidity measures.
At the end of last week, Japan announced it has increased its stimulus programme for the 2nd time in just over two months, expanding its purchasing of Japanese government bonds by 10 trillion yen ($123bn). The Bank of Japan (BOJ) made the move as the Japanese economy continues to labour amidst a slowdown in the important export markets of the ailing eurozone and the stuttering US. Prompting the liquidity measures was the release of negative consumer price figures. Japan has seen consumer prices falling in recent years whilst prices have increased in the likes of China and India. The Bank of Japan has been trying to reverse this trend setting a target of 1% for consumer price growth. Data released on Friday showed that consumer prices in Japan increased by just 0.2% in March from the previous year .Not including the highly volatile food and energy costs, , consumer prices dropped 0.5% from the previous year.
Driving the stock markets – Hong Kong’s Hang Seng Index had increased by 1.19% whilst Australia’s S&P/ASX200 increased by 0.69%,.- was the Commerce Department reporting on Friday that the US’s gross domestic product increased 2.2% in the first quarter, less than the expected economic expansion of approx 2.5%.
The figures fuelled speculation that the Federal Reserve might introduce the rolling out of quantitative easing measures. Te U.S. central bank would buy bonds from financial institutions, flooding the economy with liquidity to support more hiring and investment.
Today, the binary trader should look at FOMC member Fisher speaking at 9.30am GMT, European and Italian CPI at 10am GMT and Candian GDP at 1.30pm GMT for increased volatility in the markets.
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