Japanese equities were rising in early trading on Friday following a positive lead from the S&P 500, rising oil prices and the suggestion of further easing measures by central bankers.
The Nikkei was up 3.3 per cent, having risen as much as 3.6 per cent in early trading.
On Thursday the US benchmark closed 0.5 per cent higher while oil prices rebounded, but what really grabbed investors’ attention were comments by European Central Bank president Mario Draghi, who adopted a dovish tone at the central bank’s post-meeting press conference on Thursday and dropped hints that further monetary stimulus measures were imminent.
Those comments, following a dreadful start to the year in the markets, are fuelling increased interest into whether the Bank of Japan will instigate further easing at its monetary policy meeting next week.
As analysts at Barclays note:
With risk aversion strengthening to this extent, share price weakness could undermine consumer sentiment, so there are also expectations for a policy response from the Japanese government or the BoJ. Some market participants expect the government to postpone the consumption tax hike scheduled for April 2017 and to hold an election for both the upper and lower houses this July.
Get alerts on Front page when a new story is published