YEN Close To 100 As Nikkei Breaks New High

Fourth-day winning streak for the Asian stocks in overnight trading as the promise of both Japanese and now U.S. stimulus measures as confirmed yesterday boosted market sentiment keeping traders hungry for more risky assets.

Data releases from Japan indicate that the M2 Money Stock gained 3 percent in March, which is a 0.01 per cent gain from the month before. This surpassed expectations of 2.9 percent. Another Japanese report released yesterday by the Economic and Social Research Institute was the core machinery orders which had gained 7.5 percent in March after they fell 13.1 percent in the previous month. Expectations had been of a 6.8 percent increase.

Asian stocks were also bolstered by President Obama’s new 3.77 trillion dollar budget that he unveiled yesterday. The budget will be a Robin Hood tax on the wealthy and will also cut state benefit packages. The investors have priced in the strong possibility that Obama will not get most of his suggestions fulfilled by congress.

The U.S. Federal Reserve is pumping $85 billion into the economy with an asset buying program of mortgage debt and treasury holdings. This will bring down the interest rate and fill the market with liquidity which in turn will weaken the USD, make exports cheaper and push up stock prices at the same time until the Fed decides to wind the stimulus program of quantitative easing up.

Daily Analysis Assets:

Stocks
A day of bearish markets in the Asian stocks overnight session with the Nikkei 225 gaining 1.27 percent to hit its highest point since Jul 2008. The Hong Kong Hang Seng rose 0.84 percent and the Shanghai Composite ‘inched up 0.02 percent. Meanwhile the Australian ASX 200 gathered nearly 1 percent after the release of data there indicating an unemployment rate gain of 5.6 per cent last month from 5.4 percent in the previous month.

European stocks also moving up, by late afternoon European session EURO STOXX 50 jumped up 1.44 percent, the French CAC 40 up 1.21 percent and the German DAX 30 up 1.17 percent. European markets boosted on the back of the rather suspect Chinese trade surplus data.

U.S. stocks also gained on Wednesday ahead of positive expectations of Q4 earnings. Meanwhile the Federal Reserve used optimistic language regarding the forecast of the economy, which also helped the U.S. stocks. By end of trading the DJIA closed up 0.88 percent, the S&P 500 gained 1.22 percent and the Nasdaq 1.83 percent.

Forex
A fairly quiet session for the currencies where the AUD/USD stood out as it dropped 0.23 percent following on from the unemployment data in Australia. The overall investor push away from the currencies to the riskier assets meant very little movement with the currencies. Yen getting nearer to its 100 point against the dollar. The pair touched 99.61 in late Asian session.

Commodities
High volume of commodity trading in the markets with gold pushed down by 0.03 percent and silver down 0.81 percent. OPEC released data showing that oil production is down, which would normally boost the price however negative sentiment on worldwide economic growth kept the price down 0.27 percent in overnight trading.