The Bank of Japan kept its policy unchanged on Tuesday and said it expects the government’s fiscal stimulus to help the economy grow slightly faster than previously projected. The BOJ’s policy board decided to keep its short-term deposit rate at minus 0.1% and its target for 10-year Japanese government bond yields at around zero.

In its quarterly report, the BOJ’s policy board said it expects the economy to grow 0.8% in the year ending March 2020, compared with a forecast of 0.6% in the previous report in October. It expects 0.9% expansion in the year ending March 2021, compared with an earlier forecast of 0.7%.

Last month, Prime Minister Shinzo Abe’s cabinet approved a $120 billion stimulus program, designed to help recovery from a typhoon in October and address downside risks to the economy.

The BOJ expects core consumer prices, excluding fresh food, to rise 1.4% from a year earlier in the year ending March 2022, compared with a 1.5% projection for that year made in October and lower than the bank’s 2% target.

Japan’s stock market did not like the news, with the Nikkei

NIK, -0.88%

  falling 0.9% in early trading Tuesday.

China stocks were hard hit early Tuesday. Hong Kong was taking the worst of it, with the Hang

HSI, -2.29%

 ndex down nearly 2% in early trading after Moody’s downgraded the territory’s credit rating. The Shanghai Composite

SHCOMP, -1.04%

 was off 1.0% and the Shenzhen Composite

399106, -0.75%

 was 0.8% lower.

A widening outbreak of a mysterious pneumonia-like virus helped propel shares of some Chinese drugmakers to multiyear highs, while travel stocks fell, as investors made bets on the potential economic impact of the disease in the region.

China’s benchmark lending rates for short- and long-term loans were left unchanged in January for the second straight month, after the central bank held a medium-term lending facility rate steady earlier this month.

Australia’s trend rate of economic growth for the coming decade will be somewhere between 2.0% and 2.5% per year, says ANZ. This is lower than estimates from the RBA and Treasury, with the slowdown blamed on a drop in productivity growth.

It is, at least partly, global in nature. Still, ANZ thinks there is also a local factor in lower non-mining business investment.

Aussie consumers, though, were more upbeat last week as share-market strength, more reassuring news around global trade and rain across fire-ravaged areas of the country helped to lift the mood.

The ANZ-Roy Morgan consumer confidence index gained 0.9% last week, taking it back to where it was in mid-December. Current finances gained 3.4%, partly reversing weakness of 5.5% seen in the previous reading.

ANZ Head of Australian Economics, David Plank, said the gain in confidence was encouraging, considering the weakness seen in the first reading of the current year.

Australian stocks

XJO, -0.38%

 were losing ground early Tuesday, with the S&P ASX 200 index off about 0.4%

The story was compiled from Dow Jones Newswires and Associated Press reports.

Source link

2020-01-20