|
 Investors were also cheered by a better-than-expected reading of
German investor and analyst sentiment, which pointed to a more
positive outlook for Europe's No. 1 economy.
Japanese Prime Minister Shinzo Abe's call for parliament to be
dissolved on Friday was widely expected and is seen potentially
bringing more measures to stimulate growth after the Japanese
economy unexpectedly slipped into recession. Abe also said an
unpopular sales tax rise would be delayed.
The yen fell to a seven-year low against the dollar after Abe's
comments, extending recent losses in the wake of fresh stimulus
measures announced by Japan's central bank at the end of October. It
slid to a six-year trough against the euro.
"This is positive for growth and supports the 'overweight' position
in Japanese equities we added to on weakness yesterday," said Trevor
Greetham, Director of Asset Allocation at Fidelity Worldwide
Investment.
The pan-European FTSEurofirst 300 <.FTEU3> extended early gains and
was up 0.6 percent at 1,360.08 points at 1224 GMT. Japan's Nikkei
index had risen 2.2 percent after press reports said Abe would call
snap elections and delay the tax increase.
U.S. equity futures <SPc1> pointed to a flat opening on Wall St.
Investor sentiment was also buoyed by Germany's monthly ZEW survey
of analyst and investor sentiment, which rose in November for the
first time in almost a year, lifting hopes of an improvement in
Europe's biggest economy.
The euro rose to $1.253 and core euro zone bond yields retreated
after the survey, which added to positive sentiment after European
Central Bank chief Mario Draghi said on Monday that he was ready to
do more to lift inflation and growth.
British inflation meanwhile picked up slightly in October from a
five-year low as fuel prices fell less strongly than a year ago,
although the Bank of England remains under little pressure to start
raising interest rates.
Indeed, fears over global growth, exacerbated by Japan's unexpected
third-quarter contraction, have kept the spotlight on policymakers'
capacity to do more to avert threatened or actual deflation.
Draghi's comments on Monday mainly reiterated a previous stance that
the ECB was ready to do more if inflation remained too low for too
long. That pushed euro zone bond yields a touch lower, though the
euro was slightly firmer against the dollar.
[to top of second column] |
"We still have some spillover from yesterday's comments from Mario
Draghi," Bayerische Landesbank's chief strategist for global
interest rates Marius Daheim said.
The picture was more mixed in emerging markets. Stocks lost ground
and tracked Asian markets outside Japan, where the mood had soured
over downbeat Chinese house prices. Dollar-denominated assets in
Russia were up, bucking the trend.
Oil prices were broadly steady, with Brent crude down 10 cents to
$79.21 per barrel while U.S. crude rose 8 cents to $75.72.
The airline sector, which has gained recently thanks to falling oil
prices, was in focus after low-cost carrier easyJet said it was
positioned to deliver further growth.
Nigeria's central bank intervened in the foreign exchange market,
selling dollars to lenders in a bid to boost the naira currency,
dealers said.
The local currency firmed 2.1 percent to 172.70 naira in volatile
trades after the intervention, but was still trading outside the
bank's preferred band.
(Additional reporting by Blaise Robinson in Paris, Emelia
Sithole-Matarise, Patrick Graham and Karin Strohecker in London;
Editing by Catherine Evans)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
