Monday does not appear to be a bright day for markets all over the world though the yen in Japan strengthened. So was the case with gold and government bonds that made the investors extremely cautious but there was also a sharp recovery in values of stocks in Europe.
Investors being advised to be cautious
As the earnings season in the first quarter of the United States starts off with a vengeance and the finance chiefs of G20 nations get all set for their talks later this week in Washington, it was a day when investors opted to be on the safer side rather than take any high-profile risks. The talks between the chiefs will take place along with the Spring Meetings of International Monetary Fund.
The main indices in Europe fell by about one percent while the value of yen in Japan saw an unprecedented rise against the U.S. dollars in the last seventeen months. On the other hand, the yield of Germany’s ten-year bond witnessed a decline in the last one year.
The value of the dollar declined to a low value of 107.61 yen. The drop in the value prompted the government of Japan to send an alert across that there may be steps for weakening the exchange rate of the yen.
However, there was a big upward swing in the shares of the Italian banks just before a meeting between the largest lenders of the nation in Rome, the Central Bank and the Treasury. The aim is to establish a rescue fund and lift the broader indices and financials of Europe.
A markets analyst with the CMC Markets called Jasper Lawler said that there was evidence of the market being once again uncertain on Monday. The last four weeks have seen the fall in the stock prices in Europe and if there is another week like that, it could be one of the worst financial scenarios in about last three years.
Nikkei N225 in Japan was down by 0.4 percent. However, the scenario was different in other markets in Asia that drew hope from low price inflation data of the consumers in China. The scenario has given hope to the investors that monetary policies in China will be purposely kept loose.
Focus on Japan’s yen
The officials in Japan have alerted their investors in yen-selling intervention directly. However, many financial experts would like to believe that yen would continue to do well. Yoshihide Suga, Chief Cabinet Secretary and top spokesman of Japanese government shared on Monday that the currency moves that took place recently are both speculative and one-sided. He also said that his government will take the necessary steps.