15 Sep 2015
Nikkei 225: Nasty risk-off turnaround wipes early gains
FXStreet (Bali) - The Nikkei 225 eliminated most of its early gains, with dealers exchanging quotes around 18,300 at one stage (near +2%) before a round of selling, now exacerbated by the BoJ unchanged policy decision, took the benchmark Japanese index near 18,000k, now up just around +0.4% for the day.
Shanghai, ASX deep in the red
Meanwhile, the Shanghai Composite, which saw an ugly open trading below 2%, kept the losses while no more bloodbath for the weak-handed longs has been seen so far, which should be a victory on its own. In Australia, the ASX200 has also seen a nasty turnaround, now down over 1%, as the risk averse environment settles in.
Risk aversion, BoJ stays pat = Yen demand surges
One of the key elements fueling Yen demand, other than the risk-averse dynamics well established in the markets since August - sporadic risk-appetite swings should be seen as corrective within bigger risk-off picture if one judges by risk-premium paid in Yen options market - , could also be the fact that the BoJ provided no hints about any possible increase in QQE in October. More QQE, while not a 'clear cut', has taken the spotlight in recent weeks, especially after last week's comments by LDP Lower House member Kozo Yamamoto in a Bloomberg interview, saying that the BoJ's October meeting would present a "good opportunity" to ease further.
Shanghai, ASX deep in the red
Meanwhile, the Shanghai Composite, which saw an ugly open trading below 2%, kept the losses while no more bloodbath for the weak-handed longs has been seen so far, which should be a victory on its own. In Australia, the ASX200 has also seen a nasty turnaround, now down over 1%, as the risk averse environment settles in.
Risk aversion, BoJ stays pat = Yen demand surges
One of the key elements fueling Yen demand, other than the risk-averse dynamics well established in the markets since August - sporadic risk-appetite swings should be seen as corrective within bigger risk-off picture if one judges by risk-premium paid in Yen options market - , could also be the fact that the BoJ provided no hints about any possible increase in QQE in October. More QQE, while not a 'clear cut', has taken the spotlight in recent weeks, especially after last week's comments by LDP Lower House member Kozo Yamamoto in a Bloomberg interview, saying that the BoJ's October meeting would present a "good opportunity" to ease further.