In Asian trading Monday, Japan’s Nikkei 225 is up 2.21% as USD/JPYtrades near its highest levels in nearly four years. The yen dropped more than 3% against the dollar last Thursday after the Bank of Japan said it plans to double its asset purchase program over the next two years and extend the maturities of the bonds it purchases.
Traders also ditched the yen following the current account deficit report. Earlier today, the Ministry of Finance said that Japan’s current account balance for the first quarter was JPY637.4 billion, well above the JPY457.5 billion median estimate.
Hong Kong’s Hang Seng is down 0.25% while the Shanghai Composite is lower by 1.72% following a two-day holiday. That means the benchmark mainland index has plunged 10% since its February peak. Speculation regarding a new outbreak of bird flu is seen hampering Chinese shares.
Elsewhere, riskier assets are under pressure after Portuguese Prime Minister Pedro Passos Coelho said the government there will have reduce spending. Last Friday, a court invalidated some of Portugal’s austerity measures that were implemented in 2011 as part of a bailout package.
Last Friday, Portugal’s Constitutional Court ruled against a 2013 budge that include EUR5 billion in tax hikes, leaving the country short EUR1.4 billion in expected revenue. Portugal, the "P" in the popular PIIGS acronym, was the third euro zone member after fellow PIIGS members Greece and Ireland to receive bailout assistance
Australia’s S&P/ASX 200 is essentially unchanged while New Zealand’s NZSE 50 slipped 0.89%. South Korea’s Kospi fell 0.18%, extending losses accrued last week following BoJ’s efforts to further weaken the yen.
Singapore’s Straits Times Index dropped 0.16%. S&P 500 are flat at this writing. The benchmark U.S. index fell nearly 1%, good for its worst performance this year.
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