SEOUL, South Korea – Global stocks rose Wednesday after Japanese Prime Minister Shinzo Abe announced plans for a whopping 28 trillion yen ($254 billion) stimulus package. Investors were awaiting a policy statement by the Federal Reserve, as strong U.S. economic data raised questions over the likely course for interest rates.
KEEPING SCORE: Britain’s FTSE 100 rose 0.3 per cent to 6,745.70 and France’s CAC 40 gained 1.5 per cent to 4,458.44. Germany’s DAX advanced 0.8 per cent to 10,329.36. Futures augured a tepid start on Wall Street. Dow futures added 0.2 per cent while S&P futures also gained 0.2 per cent.
JAPAN STIMULUS: Abe announced plans for extra spending worth more than 28 trillion yen to help boost growth, but details are uncertain and analysts say much of the money may already be in the pipeline. Still, the fresh support for the sagging recovery was welcomed. Japan’s central bank is expected to deliver fresh monetary stimulus at its policy meeting that wraps up Friday.
FED WATCH: The Federal Open Market Committee is scheduled to release its latest monetary policy statement later on Wednesday after wrapping up a two-day meeting. While analysts expect the Federal Reserve not to change policy this month, they said recent strength in U.S. economic data and the recovery of investor sentiment since Britain’s referendum to leave the European Union have revived the possibility of a rate hike later this year.
ANALYST’S TAKE: “The Fed will in most likelihood opt for a cautious stance while assessing Brexit implications on the U.S. economy,” Mizuho Bank wrote in a daily commentary. “We caution that there is a risk that markets may be caught wrong-footed in the event of a surprise downbeat tone.”
ASIA’S DAY: Asian stock markets closed mostly higher. Japan’s Nikkei 225 rose 1.7 per cent to 16,664.82 and Australia’s S&P/ASX200 was flat at 5,539.70. Hong Kong’s Hang Seng index finished 0.4 per cent higher at 22,218.99 but South Korea’s Kospi fell 0.1 per cent to 2,025.05. Stocks in mainland China also fell but shares in Taiwan, Singapore and Indonesia were stronger.
OIL: Benchmark U.S. crude dropped 22 cents to $42.70 per barrel on the New York Mercantile Exchange. The contract closed down 21 cents at $42.92 a barrel on Tuesday. Brent crude, used to price international oils, fell 43 cents to $44.44 a barrel in London.
CURRENCIES: The dollar gained to 105.47 yen from 104.85 yen while the euro strengthened to $1.1003 from $1.0987.