(MENAFN- Gulf Times) Asian and European markets extended their latest rally yesterday following across-the-board records on Wall Street where traders were buoyed by another day of strong earnings.
Better-than-forecast results from New York titans IBM and American Express helped to fuel a buying spree and allowed investors to look past the crises engulfing Donald Trump and his stalled legislative agenda.
All three major indexes ended at all-time highs, which provided a platform for Asia. Japan's Nikkei ended up 0.6 % at 20,144.59 after the country's central bank cut its inflation forecasts again meaning its easy money policies would remain in place, while Sydney added 0.5% and Seoul was 0.5% higher.
Shanghai rose 0.4% at 3244.86 and Hong Kong added 0.3% at 26,740.21 to extend a rally into its ninth straight day.
But while investors are upbeat about the corporate outlook Trump's travails, along with stuttering indicators including on inflation, are keeping the dollar at multi-month lows.
Hopes are quickly fading for the tycoon's promises to boost the economy which had fuelled a global rally after his November election as the collapse of his key health care reforms this week throw his tax-cutting, big-spending plans into doubt.
The dollar enjoyed some small gains on profit-taking in US trade but was back under pressure yesterday as investors await the a policy meeting at the European Central Bank
ECB chief Mario Draghi's post-meeting statement will be pored over as an improving eurozone economy feeds speculation that the bank will start to soon reel in the vast stimulus measures.
'The risk today comes if Draghi puts his dovish hat on and suggests the program could simply be extended in its current form, Craig Erlam, a senior market analyst at OANDA, said in a commentary.
'Traders seem so convinced of further reductions that the euro could be vulnerable to the downside if the central bank doesn't follow through.
The Bank of Japan stood pat on its own policy, as expected, but slashed its inflation outlook and once again put back its forecast for hitting a 2% rate as it struggles to kickstart the world's number three economy.
Officials had originally set in 2013 a two-year timeline when unveiling the bank's massive monetary easing programme as part of Prime Minister Shinzo Abe's push to kickstart growth in the world's number-three economy.
'The BoJ has already pushed out the timeline several times.
Now four years have passed, and there is no sign the inflation rate is rising, Masaaki Kanno, chief economist at Sony Financial Holdings in Tokyo and a former BoJ official, told Bloomberg TV. The yen rose to 112.25 yen after the announcement, from lows of around 111.80 yen earlier in the morning.
As most other central banks around the world consider tightening monetary policy the yen has fallen against key currencies with the euro up more than 10% from its 2017 lows and the pound around 7% higher.
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