Most Asian stock indexes were modestly higher on Tuesday with Japan’s Nikkei 225 hitting record highs before retreating slightly after the Bank of Japan reduced its bond purchases and signaled to investors that it will begin the path to reducing its easy money policy. The index was up 0.57 percent as of 1:48 p.m. HK/SIN. Other indexes also saw green on Tuesday afternoon in Asia, with the Shanghai Composite and Australia’s ASX 200 both up 0.09 percent. Only South Korea’s Kospi struggled after Samsung Electronics’ guidance missed market expectations, sending the index down 0.10 percent by the early afternoon.
The Asian gains followed another successful day on Wall Street where both the S&P 500 and the Nasdaq Composite closed higher, but the Dow Jones Industrial Average closed down 0.05 percent.
Currency Movements
The yen was directly impacted by the Nikkei’s gains, heading higher against its primary trading partners. The dollar eased 0.39 percent against the yen to trade at 112.64 after hitting a high of 113.15 on Monday, while the euro traded down 0.36 percent against the yen to 134.81. The euro rally showed additional signs of slowing on Tuesday, with the common currency falling against its major pairs. The euro was down a mere 0.01 percent against the dollar, trading at $1.1966, and it was down 0.05 percent against the pound as analysts began to question whether the long-awaited correction would be starting after the euro’s strong showing in recent months. Analysts expect that U.S. influences and policy adjustments will have a strong impact on the euro in the coming months especially as the Federal Reserve weighs how many times to raise interest rates in the coming year.