SMI lower in early trade

The Bank of Japan (BoJ) surprisingly decided to relax the range in which long-term bond yields move. This was seen by markets as the first step towards tightening the monetary reins. Market analyst Andreas Lipkow said this meant the last major central bank had joined the “hawks” camp.

The change caught financial markets completely off-guard, and the Japanese Nikkei index tumbled 2.5 percent. However, BoJ chief Kuroda later stated that this does not amount to a rate increase and that the BOJ will not hesitate to further ease monetary policy if necessary. Dealers still talk about “neck blow from Japan”.

SMI dropped 0.82% at 09:35 in the morning to 10,685 points. The SLI, which includes the top 30 stocks, fell 1.03 percent to 1619 points, and the broad SPI fell 0.99 percent to 13,638 points. 29 out of 30 SLI values ​​dropped. Only Swisscom increased.

The German stock market also reacted to the Japanese decision with price losses. Leading index Dax fell 0.73 percent to 13,841 points in the first few minutes on Xetra. The MDax of mid-cap stocks fell 1.01 percent to 24,772 points. EuroStoxx 50, the leading index of the euro zone, also fell 0.8 percent.

Credit Suisse shares (-3.6%) came under pressure again in the early morning hours and the bearish trend continued. But shares of UBS (-1.4%) and Julius Baer (-1.4%) also fell.

Shares of two luxury goods manufacturers Richemont (-1.5%) and Swatch (-1.5%) fell despite the sector’s good export figures. Watch exports rose nominally by 10.9 percent to CHF 2.41 billion in November. “Concerns about China are likely to outweigh the numbers again,” one market watcher said.

As for currencies, the yen posted strong gains. The Japanese currency appreciated strongly against the US dollar, euro and Swiss franc. Currently, 100 yen costs about 70 cents, after 68 cents before the BOJ decision.

(SDA)