Futures higher on aggressive Japan stimulus

Investors also await ECB and BOE decisions, as well as weekly of jobless claims.

By Benzinga Apr 4, 2013 8:18AM

stock market zurbar age fotostockBy Matthew Kanterman


U.S. equity futures rose after the Bank of Japan announced new rounds of easing in hopes that ongoing and increased central bank stimulus can continue to prop up the global economy.


The BoJ said it will increase purchases to 7 trillion yen per month, or about $73.7 billion per month, thus switching its policy to asset buying to expand the monetary base from lowering overnight rates. It will double its holdings of Japanese Government Bonds in two years and suspend the bank note rule, allowing additional easing. The BoJ expects to achieve the 2% inflation goal in two years.


In other news, Spain sold 4.3 billion euros of three-, five-, and eight-year bonds when it expected to sell only 3 billion-4 billion euros of bonds. Yields were slightly higher than the previous auction in the shorter maturities but the eight-year auction was the strongest.


The eurozone Services PMI dropped to 46.4 in March from 46.5 in February on expectations of a reading of 46.5. The weakness in Germany and France weighed on markets, while Italy and Spain's services PMIs were slightly stronger than expected.


The British services PMI jumped to 52.4 in March from 51.8 in February when economists were expecting a decline to 51.5.


  • S&P 500 futures gained 7.1 points to 1,556.30.

  • The EUR/USD was lower at 1.2799.

  • Spanish 10-year government bond yields fell to 4.83% from 4.9%.

  • Italian 10-year government bond yields fell to 4.52% from 4.59%.

  • Gold declined 0.46% to $1,545.70 per ounce, briefly touching a low of $1,540.00, the lowest since May of 2011.

  • Click here for more of Benzinga's Top News stories!

Asian markets

Asian shares were mostly lower save for Japan on fears of a North Korean nuclear threat. The Japanese Nikkei spiked 2.2% as the Shanghai Composite Index declined 0.11% and the Hang Seng Index fell 0.14%. Also, the Korean Kospi declined 1.2% and Australian shares fell 0.89%.


European markets

European shares were mostly higher ahead of interest rate decisions and policy statements from the Bank of England and the European Central Bank. The Spanish Ibex Index rose 1.51% following the strong debt auction and the stronger than expected services PMI and the Italian FTSE MIB Index gained 1.48% on the services PMI. Meanwhile, the German DAX rose 0.39% and the French CAC gained 0.74% while U.K. shares slipped 0.08%.


Commodities

Commodities were once again laggards overnight as most major commodities traded lower. WTI crude futures slid further to $94.40 per barrel and Brent crude futures rose 0.23% to $107.29 per barrel. Copper futures slid 0.3% to $332.30 as the bearish sentiment in copper continues to reign. Gold was sharply lower and silver futures were flat at $28.62 per ounce.


Currencies

Currency markets were in flux with the yen absolutely tanking overnight following the massive easing moves from the Bank of Japan. The EUR/USD was lower at 1.2799 and the dollar strengthened against the yen to 95.43, a gain of 2.57%. Overall, the Dollar Index gained a whopping 0.68% on strength against the yen, the euro, the pound, the Swiss franc, and the Canadian dollar. Notably, the Australian dollar reversed recent strength against the greenback overnight and the yen was weak across the board.


Premarket movers

Stocks moving in the premarket included:

  • Sarepta Therapeutics (SRPT) shares rose 1.53% premarket following a new rating at Baird of outperform with a price target of $63, representing about 85% upside in the stock.

  • Compuware (CPWR) shares fell 2.99% after the company issued weak preliminary fourth quarter results.

  • Zynga (ZNGA) shares fell 2.55% premarket after jumping Wednesday on news that the company is set to launch real money gaming in the U.K. this week.

  • Facebook (FB) shares gained 1.37% premarket following positive comments from OTR Global.

  • Click here for more of Benzinga's Premarket Outlook!

Earnings

Notable companies expected to report earnings Thursday include:

Economics

On the economics calendar Thursday, the Bank of England and the European Central Bank are expected to release policy statements. Also, jobless claims are due out ahead of the nonfarm payrolls report Friday and speeches from Federal Reserve President Charles Evans and Chairman Ben Bernanke are expected. Overnight, eurozone GDP and German factory orders should move markets.


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3Comments
Apr 4, 2013 9:55AM
avatar
And after 25 years of failed "Stimulus", zero growth, and debt piled high and deep, the Japanese have decided they just didn't "Stimulate enough?   

Doing the same thing over and over again and successively bigger and expecting different results is the very definition of insanity.   I sure hope Obama is not watching this, he's the type of dope that will want to try it here....
Apr 4, 2013 9:48AM
avatar
LOL....   So many believe governments can PRINT their way to Prosperity....   This will not end well...

You cannot Print and Tax your way to prosperity, nor can you Borrow and Spend your way out of Debt, no matter what the lazy, arrogant, incompetent, corrupt Imbecile '57 States' and his  Donkey minions tell you...
Apr 4, 2013 10:15AM
avatar
Who cares about Japan.  Just another country in financial trouble with no way out but to print money.
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