BoJ open-ended asset purchase decision ‘boosts commodities’

<p>Commodities have reached a three-month high following Japan’s latest policy shift.</p>

The decision by the Bank of Japan to bring in open-ended asset purchases from next year has resulted in a boost for most major commodities indices.

Japan's policy shift has lifted optimism that economic revival could be on the cards for Japan, meaning a demand for natural resources could be set to rise.

Indeed, today (January 22nd) has seen the Standard & Poor's GSCI index of 24 raw materials climbing 0.6 per cent to 664.62, with soybeans gaining 1.2 per cent and natural gas rising 2.1 per cent.

On the New York Mercantile exchange, US natural gas enjoyed gains of up to 2.2 per cent to take it to 3.645 per million British thermal units.

As part of Japan's policy shift, BoJ governor Masaaki Shirakawa and six other board members voted in favour of a two per cent inflation target. It is hoped such a move will play an important role in reviving the country's economy.

Find the latest spread betting strategies for the commodities market at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.