Asian shares were mixed on Wednesday as investors remained cautious ahead of the European Central Bank's policy meeting later in the week. Export data was generally weak while Japan's markets was hoping to reach new highs for the month.
MSCI's broadest index of Asia-Pacific shares outside Japan fluctuated back and forth but remained mostly flat with no marked clear trend.
The Nikkei, however, managed to climb 1.2 percent, nearing an October high of around 14,438, partially as a result of continued speculation of more quantitative easing by the Bank of Japan.
According to Gavin Parry, managing director at Parry International Trading, "Japan's market is so liquid and has been so well conditioned to handle bad news since QQE first began that, in a way, bad news is good news sometimes."
ECB May Ease QE
European markets—UK, Germany and France-- are expected to show small gains upon opening Wednesday as the Euro remained firm against the USD.
News from the ECB on bank lending in the euro zone pointed to further easing in credit conditions and improved demand for loans both of which should reduce the central bank’s need to immediately increase its 1 trillion euro asset purchase program.
The ECB governing council meets on Thursday and analysts are looking forward to hearing about measures it will take to boost inflation.
Wall Street ended the day down Tuesday with the Dow 0.1 percent lower, while the S&P 500 eased 0.14 percent and the Nasdaq 0.5 percent. Reuters reported that earnings for S&P 500 companies are expected to have fallen about 4 percent in the third quarter and revenue to have declined 3.8 percent.