Monday July 30, 2012
Tokyo market waiting fr ECB and US Fed stimulus this week
TOKYO: INVESTORS in Tokyo are looking to the European Central Bank and US Federal Reserve for further stimulus measures this week but worries over the high yen could drag down sentiment.
Expectations for policy steps to contain Europe's debt crisis increased following comments last Thursday by ECB President Mario Draghi, who said the bank was ready to do “whatever it takes” to preserve the euro.
“And believe me it will be enough,” he told a business conference in London, warming investor sentiment around the world, including in Japan where the Nikkei trimmed losses made earlier in the week.
“The head of a central bank saying believe me' carries weight,” said Hiroichi Nishi, general manager of equity division at SMBC Nikko Securities.
In the week to July 27, the Nikkei 225 Index at the Tokyo Stock Exchange slipped 1.19% or 103.23 points to 8,566.64.
The broader Topix Index of all first-section shares fell 1.00% or 7.38 points, to 726.44.
Easing concerns over Spanish sovereign debt and expectations for stimulus measures globally were boosting market sentiment, said Yoshihiro Okumura, general manager of research at Chibagin Asset Management.
Madrid's benchmark 10-year bonds fell to 6.899% last Friday, which although still high is well down from the near eight percent levels seen earlier in the week.
But concerns remained over a strong yen weighing on the market, said Credit Suisse economist Hiromichi Shirakawa.
“Even if the market tilts toward a risk-on condition, we cannot deny the possibility that a high yen would cap the top side of the market,” he said. AFP