World stocks rose this Wednesday, December 21, which regained stability after the Bank of Japan (BoJ) rocked the markets with its unexpected decision to relax control over the yield of public debt, a situation that pushed the yen to its biggest daily rise against the dollar in 24 years.
MSCI’s global stock index was up 0.67%, but is on track to fall almost 4% in December. This year, the measure will have declined for eight of the 12 months, tied only with 2008 for the number of monthly losses in a recorded calendar year.
The main indices of Wall Street They advanced more than 1%. Results from sporting goods giants Nike (NYSE:NKE) and courier services FedEx Corp (NYSE:FDX) boosted gains.
In Europe, stocks more than recovered the previous day’s 0.4% drop and improved 1.5%, helped in part by a rebound in sportswear stocks.
On Tuesday, the BoJ widened its trading band for 10-year government bond yields from 25 basis points (bps) on either side of zero to 50 bps.
The decision by the BoJ, the world’s last dovish bastion of central banks, raised investor concerns about how rising interest rates and persistent inflation will affect the global economy. Fund managers are taking an extremely cautious approach heading into 2023 and as a result trading conditions are thin and highly volatile.
“We think that recessions are coming in the United States and Europe, but right now it is very difficult to gauge their magnitude. This makes it very difficult to assess the earnings potential for 2023 and therefore also very difficult to do the usual reasoning about valuations,” said Bastien Drut of CPR, a unit of Amundi, Europe’s largest asset manager. .
Meanwhile, the dollar was up 0.2% against a basket of six major currencies, pulling the price of gold away from six-month highs, while crude oil gained 2% after data showed a pick-up in weekly demand.
On Tuesday, the US currency posted its biggest one-day drop against the yen in 24 years, shedding almost 4% after the BoJ announcement. On Wednesday, the greenback recovered about 0.3% against its Japanese peer.
The euro was stable at US$1.0609, near a six-month high last week.
The yield on the 10-year US Treasury note was down 4.4 bps to 3.640%, after hitting a high around 3.72% overnight. The return on Japan’s 10-year notes rose 7bp to 0.48%, close to the BoJ’s 0.5% ceiling.
With information from Reuters.
Source: Larepublica
Kingston is an accomplished author and journalist, known for his in-depth and engaging writing on sports. He currently works as a writer at 247 News Agency, where he has established himself as a respected voice in the sports industry.
