Bank of Japan sets up special lending facility for disaster affected financial institutions; Australian unemployment data drops to 4.9%
City Index April 7, 2011 3:22 PM
<p>Asian markets were mostly flat today after flitting from positive to negative territory despite positive leads from Wall Street overnight. In a much anticipated decision, […]</p>
Asian markets were mostly flat today after flitting from positive to negative territory despite positive leads from Wall Street overnight.
In a much anticipated decision, the Bank of Japan (BOJ) held off on easing interest rate. At the same time it set up a special lending facility for financial institutions in areas hit and affected by the earthquake and tsunami. The BOJ is planning to lend a total of 1 trillion Yen in one-year loans at 0.1% rate. This additional money supply will bolster the financing capacity of finance institutions in the disaster affected areas.
The Nikkei 225 Index was trading 17 points up at midday (in Japan).
In Hong Kong, stocks swung between gains and losses after the Chinese government raised retail prices for gasoline and diesel, dampening the outlook for automakers while boosting oil producers. Geely Automobile Holdings Ltd, a unit of the Chinese automaker that owns Volvo cars, declined 2%.
CNOOC Ltd, China’s biggest offshore oil producer, increased 2.5%. Anhui Conch Cement Co, a cement producer jumped 6.4% after Macquarie Group Ltd raised its rating to outperform from neutral.
In Australia, the Bureau of Statistics reported the latest unemployment figure at 4.9 per cent, which is better than the 5 per cent recorded in February 2011. This shows Australia in one of the strongest positions compared to other economies including the US which is still nursing an 8.8 per cent unemployment and the Euro Zone, which has an unemployment rate of 9.9 per cent.
The strong unemployment number bode well for the Australian dollar, which is now trading around the 1.0450 level against the US dollar. At the moment, the Aussie looks formidable and unstoppable given the strong commodities prices and the overall weakness in the US dollar.
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