Asia
Markets in the region had the opportunity to react to the Federal Reserve’s announcement that it would start to reduce its $4 trillion balance sheet in October and possibly raise interest rates in December. The dollar’s uplift against the yen was an inevitable result of the news, but Japanese indices maintained this week’s positive trend. The Nikkei closed moderately higher and above the 20,000 level – around two-year highs. The Topix index was also in positive territory at the close despite a late selloff. The Bank of Japan left interest rates at -0.1%, as expected, and maintained its 10-year bond yield target at 0%. The central bank will continue to buy assets at 80 trillion yen a year, but it said that the country’s economy was expanding modestly and that inflation would move up from its current level of around 0.5% to 2%. Both China’s CSI 300 and Hong Kong’s Hang Seng Index were little changed from Wednesday’s levels. India’s BSE Sensex was also down by a sliver on the day before.
Europe
The FTSE 100 was a touch higher by midmorning on Thursday, held back by a dearth of corporate news to move the index and currency moves after the dollar rallied after the Fed meeting. News that the government’s August borrowing was the lowest for 10 years was seen as positive for the UK economy, especially with the budget deficit falling to £5.7bn from £7bn a year earlier. Buildings firm CRH (CRH) was top of the index after agreeing to buy rival Ash Grove for $3.5bn. In the eurozone, consumer confidence figures are expected to show a negative reading for August when the figures are released in the afternoon. European Central Bank chief Mario Draghi will be speaking in Frankfurt today – although his remarks will be less scrutinised than Janet Yellen’s were last night, anything he might say about the eurozone’s economy will have a knock-on effect on the currency markets. The Paris and Frankfurt exchanges were a touch higher ahead of the speech.
North America
US stock markets edged up after the Federal Reserve news, but investors are expecting a modest retreat from these record levels at the open on Thursday. $200 billion information technology company Oracle (ORCL) is by far the biggest US company reporting on a Thursday light of earnings announcements. In the US, weekly jobless claims to September 16 will give some insight into the country’s employment market. The Philadelphia Fed will release its September outlook before the NYSE opens. The Toronto Stock Exchange index is expected to build on its gains for the week, having closed up closed up nearly 100 points at 15,389 on Wednesday.
