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Thursday, 23 January 2014 00:00 - - {{hitsCtrl.values.hits}}
expecting the US Federal Reserve to further trim its bond-buying next week.
European shares are seen edging up slightly after glimmers of corporate optimism and solid German sentiment data helped to push them to a 5 1/2-year high the previous day, with Germany’s DAX .GDAXI seen rising 0.2% at the opening.
The CSI300 of the largest Shanghai and Shenzhen A-share listings gained 2.3% to its highest intra-day level since 9 January, recovering from six-month lows hit on Monday on worries about a cash squeeze and possible default of a trust loan.
“The cyclicals and the blue chips are leading the rebound today, which usually point at policy relief. It’s more a relief rally at this point, especially since some of these growth-sensitive counters have been hit quite badly,” said Cao Xuefeng, a Chengdu-based analyst with Huaxi Securities.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.2%. So did Japan’s Nikkei .N225, which erased losses incurred when the Bank of Japan did not hint at any additional easing.
Australian shares fell 0.2% .AXJO after an unexpectedly large spike in inflation reduced the prospects of a rate cut, though the data also helped to lift the Australian currency 0.7% to $ 0.8866.
Against other currencies, the US dollar held firm, with the dollar index .DXY almost flat at 81.072, after having risen as high as 81.388 on Tuesday.
The euro traded at $ 1.3556, not far from a two-month low of $ 1.3508 hit on Monday while the dollar stood at 104.30 yen, not far from a five-year high of 105.42 yen hit on 1 January.
The yen’s rebound after the BOJ’s decision proved short-lived, with traders now focusing on the Governor Haruhiko Kuroda’s news conference at around 0630-0715 GMT.
The Canadian dollar drooped near a four-year low ahead of a policy announcement from the Bank of Canada later in the day, with many traders speculating it could shift policy bias from neutral to easing.
The Canadian dollar traded at C$ 1.0967 per US dollar, having touched $ 1.1019 on Tuesday.
In contrast, investors expect the Fed to trim its monthly bond-buying by around $ 10 billion to $ 65 billion at its 28-29 January meeting, the last one under outgoing Chairman Ben Bernanke. The Fed in December decided to cut purchases by $ 10 billion.
A fresh cut could unsettle emerging markets, as foreign investors re-route funds back towards US markets on further signs of a healthier economy.
