Asian shares held near eight-week highs on Thursday as investors bet on the likely size and scope of a bond-buying program the European Central Bank is poised to unveil later in the day in an attempt to revive the flagging euro zone economy.
The euro was quieter ahead of the ECB decision after the previous day's wide ranges, which saw the MSCI Asia Pacific Index (MXAP) lose 0.1 percent to 134.46 in Tokyo before markets opened in China and Hong Kong. The Canadian dollar stole the spotlight after plunging to a nearly six-year low following the Bank of Canada's surprise move to slash its overnight rate to help cushion the economy from recently plunging oil prices.
Japan’s Topix index slid 0.1 percent. Australia’s S&P/ASX 200 Index advanced 0.5 percent and South Korea’s Kospi index added 0.4 percent. New Zealand’s NZX 50 Index added 0.2 percent after yesterday closing at a record high.
An ECB Executive Board proposal calls for a quantitative easing (QE) program that would enable the bank to buy 50 billion euros ($58 billion) in bonds a month from March, for a total of as much as $1.3 trillion in asset purchases through the end of 2016, according to central-bank officials.
Not everyone is optimistic of the ECB move. “I’m not convinced that even a 1 trillion euro package will be enough to save the euro area,” said Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which has about $21 billion in funds under management. “It may be the case that this process has dragged on so long it’s mostly factored into financial market prices.”
Barclays strategist, Mitul Kotecha, is also wary. "The impact on the euro following such an announcement today is debatable given lofty market expectations, and a 'buy on rumor, sell on fact' reaction in the short term should not be ruled out, with a short squeeze likely unless something more significant than expected is announced," he said.