Morning Briefing: Japan opts for negative interest rates

Morning Briefing: Japan opts for negative interest rates

Morning Briefing: Japan opts for negative interest rates Japan opts for negative interest rates
The Bank of Japan made a surprise announcement Friday; it reduced interest rates into negative territory. There will be a tiered system with rates of 0.1 per cent, zero and minus 0.1 per cent. The stimulus was welcomed by the markets with the Nikkei up almost 3 per cent along with Shanghai; all Asian markets closed higher although Sydney’s gains were subdued by losses for gold miners.

European indexes are also higher this morning following the news from Japan and oil prices gaining to around $34.

Wall Street and Toronto are expected to open higher.
 
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North America (previous session)
US Dow Jones 16,069.64 (+0.79 per cent) -8.32 per cent -6.52 per cent
TSX Composite 12,591.93 (+1.73 per cent) -4.94 per cent -13.97 per cent
 
Europe (at 5.30am ET)
UK FTSE 6,008.34 (+1.29 per cent) -4.85 per cent -11.78 per cent
German DAX 9,752.54 (+1.17 per cent) -10.20 per cent -9.18 per cent
 
Asia (at close)
China CSI 300 2,946.09 (+3.24 per cent) -21.69 per cent -15.39 per cent
Japan Nikkei 17,518.30 (+2.80 per cent) -7.71 per cent -0.50 per cent
 
Other Data (at 5.00am ET)
Oil (Brent) Oil (WTI) Gold Can. Dollar
34.19
(+0.89 per cent)
33.65
(+1.29 per cent)
1113.70
(-0.13 per cent)
U$0.7128
 
Aus. Dollar
U$0.7096
 
US GDP data weighed, economists expect slower pace
A survey of economists by Reuters expects fourth quarter growth in the US to have slowed to 0.8 per cent. Official figures are released at 8.30am ET Friday but the expectation is that milder winter weather and caution among businesses will have slashed the growth rate from the 2 per cent seen in the third quarter. That said, the belief is for any slowdown to be temporary with the first quarter of 2016 predicted to see stronger results.
 
Central banks’ policies are ‘complete failure’ says investor
Marc Faber of the Gloom, Doom and Boom report says that it’s wrong to give so much power to the “bunch of professors” that set monetary policies in central banks. Speaking to CNBC Faber said that policies have been a “complete failure” and asked if the world is “crazy” to give the central banks so much power. He particularly called into question the policy of quantative easing which has been used in the US, UK, Eurozone and Japan.