NEW YORK, Jan 14 — A gauge of global stocks scored its sixth straight session of gains yesterday as investors assessed the start of US earnings season and the path of inflation, while the yen jumped to a seven-month high on speculation the Bank of Japan may alter its loose monetary policy.

On Wall Street, US stocks shook off early declines and closed higher in the wake of earnings reports from several large banks such as JPMorgan ChaseJPM.N, up 2.52 per cent, Wells Fargo, which rose 3.25 per cent, Bank of America up 2.20 per cent and Citigroup, which climbed 1.69 per cent.

Major US indexes had pared initial losses as the bank stocks moved off their early lows, with the S&P 500 banks index up 1.58 per cent after dropping as much as 2.93 per cent.

Helping to alleviate the initial selling pressure was data showing US consumers see inflation easing over the next 12 months, according to the University of Michigan Surveys of Consumers. That came on the heels of the consumer price index reading on Thursday which showed consumer prices fell slightly in December.

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“This has shifted the focus back to earnings,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“Even though the earnings were basically OK, people are just kind of stepping back, and you’re going to see a wait-and-see attitude with stocks” as investors hear from company executives.

The Dow Jones Industrial Average rose 112.84 points, or 0.33 per cent, to 34,302.81, the S&P 500 .SPX gained 15.89 points, or 0.40 per cent, at 3,999.06 and the Nasdaq Composite added 78.05 points, or 0.71 per cent, at 11,079.16.

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Both the S&P 500 and Nasdaq closed at their highest levels in a month, while the Dow closed at its highest point since December 2.

Quarterly earnings for S&P 500 companies are expected to decline 2.2 per cent from the year-ago period, per Refinitiv data, compared with an expected decline of 1.6 per cent at the start of the year.

The dollar index was flat, with the euro down 0.15 per cent at US$1.083.

European shares advanced, with the STOXX 600 index closing at its highest level since late April, buoyed in part by better-than-expected UK economic data, while healthcare and bank stocks rose.

The pan-European STOXX 600 index rose 0.52 per cent and MSCI’s gauge of stocks across the globe gained 0.65 per cent. The MSCI index hit a one-month high of 637.18 in a six-day rally, its longest in slightly more than two years.

The Japanese yen strengthened 1.09 per cent versus the greenback at 127.88 per dollar, while sterling GBP= was last trading at US$1.2228, up 0.23 per cent on the day after the UK GDP data.

The greenback weakened to its lowest level against the yen since late May on speculation the Bank of Japan (BOJ) may revise or possibly even abandon its yield curve control (YCC) policy as early as next week, which also pushed 10-year government bond yields JP10YTN=JBTC briefly above the central bank’s 0.5 per cent ceiling.

The BOJ subsequently stepped in to announce two separate rounds of emergency buying to pull the yield back down.

A newspaper report flagging the possibility of more flexibility has increased expectations of a coming shift out of the extremely loose policy that seeks to keep yields near zero. The BOJ said it will conduct additional outright bond purchases on Monday, a move that should keep yields in check.

“While a hike next week seems unlikely, it’s possible that the BOJ abandons YCC then in order to set up liftoff at the March or April meetings,” said Win Thin, head of global head of currency strategy at Brown Brothers Harriman. “This is the basic roadmap for tightening that’s been well-established by the Fed.”

The BOJ will likely raise its inflation forecasts next week and debate whether further steps are needed, sources familiar with the bank’s thinking told Reuters. — Reuters