Shares edged higher for the fifth time in six sessions amid cautious trade ahead of this afternoon's Bank of Japan policy statement.
At 1pm EST the ASX 200 was 25 points or 0.5% stronger at 5328, led by gains in energy stocks +1.2%, consumer staples +0.9% and industrials +0.9%.
"The last few days have really been non-events. And the market is well aware we have two of the largest central banks waiting to throw some curve balls over the next 24 hours," Gary Huxtable, client adviser and strategist at Atlantic Pacific Securities, told Fairfax. "The market's been flirting with a breakthrough of 5300 since Friday so it's pleasing to see it finally break through this morning,"
Volumes were subdued ahead of the BoJ's economic update, due between 1pm and 2pm AEST, and tonight's policy statement from the US Federal Reserve. Opinions were divided on whether or not the BoJ will add to existing stimulus measures.
“We do know that the BOJ is quite divided on the merits of extending extraordinary monetary measures further given the difficulty that negative rates and a flat yield curve create for the banking and financial sector,” Con Williams, economist at ANZ Bank New Zealand, told Bloomberg. “Confidence in what the BOJ can implement at the meeting is cautious and recently the BOJ has disappointed markets. For the Fed, expectations are that rates will be kept on hold.”
Most Asian markets tilted lower. Hong Kong's Hang Seng shed 0.07% and Japan's Nikkei 0.49%. China's Shanghai Composite edged up 0.06%. Dow futures were recently ahead six points or 0.04%.
Crude oil futures rallied 79 cents or 1.79% this morning to US$44.84 a barrel. Gold futures were 50 cents or 0.04% stronger at US$1,318.70 an ounce. The dollar was buying 75.56 US cents.
The calm before the... well, quite possibly more calm. Hard to tell whether markets genuinely expect the BoJ to do anything this arvo, given their recent willingness to disappoint. The Fed meet may also be a yawn. Or not. Time will tell. Trading: FBR gave a couple of nice entries for a solid wage. Speculators in BLG and ERJ. Swung and missed at a few more.
