Nikkei Surges 2.6%

Elena
09 Mar, 2006
New York City

Asian-Pacific benchmarks closed largely in the positive as the Bank of Japan announced a decision to abandon its ultra-easy monetary policy and return to a more normal policy. The news sent the Nikkei 2.6% higher to 16,036.91 and boosted the yen to 117.44 against the dollar. Among other regional markets, Taiwan Weighted index rose 0.4%, while South Korean Kospi declined 0.2%.

8:00AM The Bank of Japan abandons easy monetary policy
Asian-Pacific benchmarks traded mostly higher after the Bank of Japan brought relief to regional markets, stating a decision to abandon its ultra-easy monetary policy. The bank concluded that the economic and price conditions are favorable for making a shift to a more normal monetary policy. The Nikkei soared 2.6% to 16,036.91 ending a five-session decline. The yen also got a boost on the news, rising to 117.44 against the dollar.

Across the region, Taiwan Weighted index rose 0.4%, Hong Kong’s Hang Seng gained 0.1%, recovering from recent losses with the help of property stocks, while South Korea’s Kospi fell 0.2% for a third session in a row, dragged by Samsung Electronics.

European stocks advanced at mid-day, rebounding from two consecutive lower sessions. Stocks were boosted by a slide in oil prices, comparatively strong close on Wall Street, and upbeat earning reports from insurance and retail companies, such as Royal & Sun Alliance and Carrefour. A sharp 22% jump in the shares of drug maker Elan also lifted sentiment. The German DAX 30 climbed 0.9%, the French CAC 40 advanced 0.5%, and London FTSE 100 rose 0.6%.The Bank of England announced a decision to leave interest rates on hold at 4.5%, as expected.