Daily FNArena News - International

The Bank of Japan has lifted official interest rates by 0.25% in confirmation the economy’s health continues to improve, though analysts suggest no further increases are likely this year.

Traders sold the yen overnight as comments by the Japanese finance minister created fresh doubt as to the size of any move on interest rates following the Bank of Japan meeting today and tomorrow.

GaveKal Research suggests the market is factoring in a series of rate increases in Japan, but the BOJ is more likely to adopt a cautious approach.

Recent volatility and a history of poor performance near the top of the interest rate cycle in the US has brokers suggesting Asian emerging market performance may be subdued in the next few months.

The prospect in Indonesian interest rates falling to 10.75% this year is expected to bode well for the stock exchange, particularly banking and property stocks.

Brazil, Russia, India and China will be among the six largest economies globally by 2050, but each are developing at their own speed.

UBS believes the underperformance of Korean equities could soon reverse.

First ABN Amro and now Credit Suisse is advising Asian investors to sell the current bounce.

Both HSBC and Deutsche Bank remain positive on the longer-term outlook for Asian markets, but suggest defensive exposures should be a focus for investors.

The market is factoring in an increase in offical rates by the Bank of Japan next week, with the experts suggesting the economy is now strong enough to withstand such a move.