Risk-off sentiment has rolled over into today’s Asian session following Obama threatened to veto the Republican ‘Plan B’ if it passed Thursday’s vote in Republican House of representatives during the US session. Continued back and forth in the fiscal cliff negotiation indicates this issue is still in the process of muddling through; close but no deal.
Current trade in Japanese asset classes has been cautious weighed by concerns over the fiscal cliff and in anticipations of the further accommodation the Bank of Japan by increasing its JPY 91trl asset purchase program, adding to the JPY 10trl expansion from September and the JPY 11trl expansion from October. The Nikkei 225 pulled off highs and is currently trading firmly in negative territory after a recent string of gains, one of the stocks suffering most is Mitsubishi Motor (-6.59%) who reported that Co. recalls 1.21mln vehicles on possible oil leak and will book JPY 7.5bln charge that is not reflected in FY forecast. Over in fixed income, JGBs’ have been on a steady rise since the open as participants position themselves for the forthcoming BoJ rate decision.
The ASX 200 is outperforming today, led by the healthcare, financials and utilities sectors. Meanwhile, AUD movement will continue to be driven by shifts in broader market sentiment in the absence of domestic data as we approach the Christmas holiday period.
Looking forward we anticipate the Bank of Japan’s rate decision shortly with no scheduled time having been released.
As of 0236 GMT:
ASX200 (+0.51 %), Nikkei 225 (-1.03%), Shanghai Comp. (-0.14%), Hang Seng (--0.32%), KOSPI (+0.32%)
20 Dec 2012 - 02:39 - Equities Data - Source: RANsquawk
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