A man walks past an electronic board displaying the Nikkei average outside a brokerage in Tokyo, Japan, April 1, 2016.THOMAS PETER/Reuters
The global stock rally intensified in Asia as Singapore unexpectedly eased monetary policy, helping stoke confidence in the ability of central banks to manage a global slowdown and damping demand for haven assets.
The regional equity benchmark was on track for its longest advance in a year as Japan's Topix index extended gains at an April high. Commodity stocks and banks rallied as copper held near a two-week high and after JPMorgan Chase & Co.'s earnings unexpectedly topped analysts' estimates. The yen slipped a third day, while Singapore's dollar slid the most in more than two months after the local monetary authority said it will no longer seek gains in the currency versus a basket of peers in a bid to ignite growth. Oil fell a second day.
Singapore's surprise move comes on the heels of policy easing from India to Norway as central bankers around the world strive to bolster their economies amid uneven energy markets and concern over the global outlook. Signs of improvement in China's economy and a marquee U.S. company defying expectations for a lackluster reporting season has encouraged a bout of equity-market optimism. Speculation the oil market will soon find some enduring stability is also key, as Russia and other major producers prepare to meet in Doha April 17 to discuss an output freeze.
"Central banks will continue to ease policy," Nader Naeimi, head of dynamic markets at AMP Capital Investors Ltd., which oversees about $120-billion, said by phone. "The weakness that we've seen in the U.S. dollar and the fact that the Fed is going slowly now is allowing other countries to come out and ease. That is what we need. Pessimism around earnings growth had gone way, way too far. This rally has more to go."
Stocks
The MSCI Asia Pacific Index added 1 per cent as of 10:06 a.m. Tokyo time, rising a seventh straight day as the Topix jumped 2.2 per cent, headed for its highest closing level since March 29. Asian raw-materials companies climbed 2.1 per cent, while financial stocks were up 1 per cent, headed for their highest close since March 22.
"The fact that investor appetite for the heavily-weighted banking sector looks to be returning could help see an even stronger day," Angus Nicholson, a markets analyst in Melbourne at IG Ltd., said in an e-mail to clients.
Markets in India, Sri Lanka and Thailand are closed for holidays Thursday, while Korean trading resumed with President Park Geun Hye failing to win a majority in parliamentary elections held Wednesday. The Kospi index rose 1.2 per cent from Tuesday levels, as banks and industrial companies climbed.
In Australia, the S&P/ASX 200 Index increased 0.7 per cent, with prices for iron ore, the country's biggest export, capping a third day of gains Wednesday. New Zealand's S&P/NZX 50 Index rose 0.3 per cent, climbing for a third day.
Futures on the Standard & Poor's 500 Index were down 0.1 per cent following the benchmark's two-day rally. Contracts on Hong Kong's Hang Seng and Hang Seng China Enterprises gauges added at least 0.8 per cent in most recent trading, after the indexes surged last session. FTSE China A50 Index futures rose 0.4 per cent.
Currencies
The Singaporean dollar lost as much as 0.9 per cent in the wake of the monetary body's announcement, touching its lowest point this month. The island nation moved to a neutral policy stance of zero per cent appreciation in the currency, according to a statement from the Monetary Authority of Singapore Thursday. Twelve of 18 economists surveyed by Bloomberg had predicted no change in their policy.
"We thought the hurdle was high for a shift to neutral," said Khoon Goh, a senior foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore. "Although the MAS said that they have no intention to depreciate the domestic currency, I don't see this as necessarily the end of the easing cycle. If downside growth and inflation risks remain, then the next easing move would be a re-centering in October."
The yen slipped 0.1 per cent to 109.42 per dollar following a two-day retreat of 1.3 per cent. The currency surged to its strongest level since October 2014 on April 7, amid the Federal Reserve's pared back plans for raising U.S. interest rates and speculation the Bank of Japan won't intervene to arrest the yen's strength.
Korea's won weakened 0.8 per cent, snapping a three-day climb as the ruling party's election loss undermined President Park's ability to enact her economic agenda in her final years in office.
–With assistance from Netty Ismail