BoJ Unveils Agressive Stimulus, YEN Declines

The Bank of Japan's two-day policy meeting is over and investors are anxious to find out if there will be aid to Japan’s troubled financial situation.

Meeting Outcome
Japan has been suffering from a very strong currency and, as a result, its exports have been expensive. The meeting's outcome: Haruhiko Kuroda the Governor of the Bank of Japan will -- as expected -- implement a host of measures to stimulate the economy. First, the Bank will create an asset-buying program geared toward meeting an inflation rate of 2% within the next two years. The BoJ will also purchase longer-term government bonds and double its acquisition of ETF’s and long-term bonds. Governor Kuroda was nominated by Prime Minister Shinzo Abe (himself newly appointed in his position) as the PM had been outspoken about the need for the BoJ to offer further aid to the Japanese economy. This prompted the Yen to weaken by 1.5 percent against the USD.

Jobs data to come out from the U.S. yesterday not so positive. Less jobs were created in March than previously expected. 158,000 new jobs were created which falls well short of the 197,000 expected new jobs.

Daily Analysis: Assets

Stocks
The Japanese stock market wiped out its earlier session losses after the conclusion of the BOJ policy meeting. The Asian stocks jumped higher in response to news about the BOJ’s plans to flood the market with money and hence devalue the currency. The Nikkei 225 which throughout the session was mostly lower gained 2.2 percent. Hong Kong and China’s Indexes closed for a public holiday.

Worsening tensions between North and South Korea pushed down the other Asian markets with the Kospi sliding 1.84 percent down as traders escape their S. Korean assets. Australian ASX 200 dropped too even with positive retail sales data from the region which gained 1.3 percent in Feb which exceed expectations of 0.9percent gains.

European stocks yesterday closed mostly lower with investors remaining cautious around events in Cyprus and the repercussions for the rest of Europe. The EURO STOXX 50 descended 0.79 percent in late afternoon session, French CAC 40 lost 0.54 percent and the German DAX 30 lost 0.27 percent.

U.S. stocks were lower yesterday in the U.S. session after the jobs data missed its mark. By the session end the DJIA which had reached another record high the day before had closed down 0.76 percent, the S&P 500 dropped 1.05 percent and the Nasdaq finished 1.11 percent down.

Forex
The currency market not swinging much with the only real currency pair to stand out the USD/JPY after the BoJ meeting results. The pair gained 1.54 percent. While the currency in Japan the worlds second largest economy will be devalued this will have the opposite effect on the stocks as you can see from this morning’s numbers. The AUD/USD was the other pair to show any kind of movement with the pair declining 0.20 percent on the back of tis retail sales data.

Commodities
The crude oil carried on its decline in overnight trading with one-percent loss of inventory supply. This caused the price to lose 0.05 percent this morning to trade at $94.40. Gold is still on its way down having breached certain technical levels that indicated a further demise. The price at time of writing is down 0.03 percent. Copper hit a seven-month low with a 0.54 percent drop on the back of the disappointing U.S. jobs data.

What To Look For Today
The British pound to watch today as Purchasing Managers Index data to be released in the UK followed by a press meeting with the Bank of England. No dramatic announcement expected. The European Central Banks is thought to leave its interest rates untouched today. Then attention moves to the U.S. with jobless claims release.