STOCK MARKET WATCH -- Wednesday, 26 December 2012

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16. Yen Weakens on Japan Stimulus Bets as U.S. Futures, Oil Advance

http://www.bloomberg.com/news/2012-12-26/yen-breaches-85-a-dollar-as-abe-takes-rein-asian-stocks-advance.html

The Japanese yen weakened to the lowest since April 2011 amid expectations Japan’s new government will push for more cash infusions to bolster the economy. Oil and U.S. stock-index futures advanced.

The yen retreated 0.6 percent to 85.31 per dollar as of 6:20 a.m. in New York and has fallen against all but nine currencies this year. Crude climbed 0.7 percent and copper added 0.7 percent. Standard & Poor’s 500 Index futures rose 0.2 percent. Japanese stocks advanced to nine-month highs and bonds declined with the parliamentary approval of Shinzo Abe as the country’s new premier. Trading in Treasuries is closed until later today in New York.

Abe, whose Liberal Democratic Party won a landslide victory in the Dec. 16 election, appointed a cabinet today, including Taro Aso as finance chief. BOJ board members said the economy is weakening and one suggested open-ended asset purchases, minutes of last month’s policy meeting showed. Democrat and Republican lawmakers in the U.S. plan to convene tomorrow for budget talks aimed at avoiding more than $600 billion in tax gains and spending cuts scheduled to take effect Jan. 1, known as the fiscal cliff.

“The BOJ minutes from the November 19-20 policy meeting provided yet another excuse to sell the yen overnight,” Gareth Berry, a foreign-exchange strategist at UBS AG in Singapore, wrote in a client note. “Having taken a mostly passive interest in the yen over the past few years, the policy board now seems willing to adjust its policy stance in a conscious effort to weaken the currency.”