Recessions risks knock stocks, speculators drawn back to yen

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Asian stock markets struggled to make headway on Thursday, after weak U.S. consumer data stoked recession worries and nudged investors toward safe assets such as bonds, while Japan's yen rose as markets doubted the Bank of Japan's policy commitments.

The BOJ has pursued ultra-easy policy settings for decades in an attempt to generate inflation and growth, but markets doubt it can keep that up, and traders have been selling Japanese government bonds and buying yen to bet on a shift., at least for now.

"There's an intense amount of speculation in the market that now that the January meeting has happened without any changes ... that we'll see something in March," said Shafali Sachdev, head of FX, fixed income and commodities in Asia at BNP Paribas Wealth Management in Singapore. April was another possibility, she added, since by then the BOJ would have a new governor. "My guess would be that more speculators would look to build positions going into these meetings."

Ten-year Japanese government bonds , the focus of markets' challenge to the BOJ because of the zero-yield target and 0.5 percentage point limit on its upward movement, yielded 0.415%.

 

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