Economic news7 Aug 2024 11:36
A soothing word from a central banker can have a big impact when traders are tearing their hair out about the future path of interest rates. Markets are calmer on Wednesday after the Bank of Japan (BoJ) dampened fears that another rate rise in Tokyo is imminent. Deputy governor Shinichi Uchida said the BoJ will stick with “current levels of monetary easing for the time being”, which helped the Topix up 4 per cent and the more tech-heavy Nikkei up 3 per cent overnight, as the yen softened.
The market volatility seen since late last week has been driven by a combination of Japan’s tightening of monetary policy (it increased rates last week for the second time this year to take them to their highest level in 15 years) and increased nervousness about a hard landing for the US economy. On Wall Street, both the S&P 500 and tech-focused Nasdaq were up 1 per cent yesterday.
The good news spread to the FTSE 100, which was up 1 per cent by mid-morning. Housebuilders Vistry (VTY) and Persimmon (PSN) were among the top risers, boosted by Halifax housing market data out today which showed that UK house prices rose 0.8 per cent in July. The Bank of England’s rate cut last week is helping housing market sentiment.
European bourses such as the Dax and Cac are also in the green, although a notably weak performer is Danish weight-loss drugmaker Novo Nordisk (DK:NOVO.B). Its shares are down 3 per cent after it reported worse-than-expected sales and profits