World stocks mixed, Japan supported by stimulus speculation

HONG KONG – World stock markets were mostly higher Friday as investors mulled the global growth outlook while Japanese shares were supported by investor hopes for more stimulus to restrain the rising yen and support the government’s economic revival plan.

KEEPING SCORE: European stocks rose in early trading, with Britain’s FTSE 100 climbing 0.5 per cent to 6,169.22 and France’s CAC 40 gaining 0.7 per cent to 4,273.49. Germany’s DAX added 0.8 per cent to 9,604.28. U.S. stocks were poised to open higher, with Dow futures up 0.5 per cent while broader S&P 500 futures increased 0.6 per cent.

RISING YEN: The dollar rebounded slightly against Japan’s currency but the yen was hovering near its highest level in almost a year and a half. The dollar rose to 108.95 yen after sinking as low as 107.70 in the previous day’s trading, its weakest level since October 2014. As global markets fluctuate, investors are shifting from riskier assets toward safer bets, including the yen, which has been traditionally seen as a haven. However, the yen’s strength threatens to undermine Prime Minister Shinzo Abe’s plan to revive Asia’s second biggest economy through monetary easing and fiscal stimulus. Analysts are starting to think the government may have to intervene if the yen falls further.

THE QUOTE: “The rise in the value of the yen is worth keeping an eye on,” said Shane Oliver, head of investment strategy at AMP Capital in Sydney. He said a stronger yen is bad for Japanese economic growth also might be a sign that global investors are taking less risk in moving around their capital. “The flipside though is that a rising yen is just a normal phenomenon of periods of investor nervousness and in any case the higher the yen goes the greater the pressure on the Bank of Japan to undertake more monetary stimulus,” he added.

ASIAN SCORECARD: Japan’s benchmark Nikkei 225 index erased earlier losses to finish 0.5 per cent higher at 15,821.52. South Korea’s Kospi dipped 0.1 per cent to 1,972.05. Hong Kong’s Hang Seng staged a last-ditch rally to finish in positive territory, up 0.5 per cent to 20,370.40 while the Shanghai Composite Index in mainland China fell 0.7 per cent to 2,984.96. Australia’s S&P/ASX 200 slid 0.5 per cent to 4,937.60. Taiwan’s benchmark rose while those in Southeast Asian were mixed.

ENERGY: Benchmark U.S. crude rose $1.20 to to $38.46 barrel in electronic trading on the New York Mercantile Exchange. The contract fell 49 cents, or 1.3 per cent, to settle at $37.26 per barrel on Thursday. Brent crude, used to price international oils, rose $1.24 to $40.67 a barrel in London.

CURRENCIES: In other foreign exchange trading, the euro rose to $1.1387 from $1.1376.