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EWJ Closed Flat as BoJ Statement Hurt Investor Sentiment

Sarah Sands

Bank of Japan Maintained Status Quo, Japanese Market Closed Flat

No change in EWJ movement

On Thursday, November 19, 2015, the iShares MSCI Japan ETF (EWJ) closed at $12.56. There was no change in the movement with respect to its previous trading session. The Bank of Japan’s (or BoJ) statement released on November 19 about the key interest rate and the monetary stimulus wiped out investor sentiment for those who had expected more from the BoJ.

Bank of Japan Governor Haruhiko Kuroda announced that the bank intends to keep its monetary policy stance steady. Further action for a monetary stimulus will be taken if macroeconomic indicators show good numbers, as expected by the BoJ. Kuroda added that despite the record-hitting earnings posted by many Japanese companies, wage growth appears slow. Capital expenditure is rising with moderate speed.

Kuroda also added that the Paris terror attack had a minimal impact on the Japanese economy. Further action will be taken if any significant geopolitical issue arises and creates more downside risk for the global and Japanese economies.

Global Indexes

On Thursday, November 19, 2015, the SPDR S&P 500 ETF (SPY) closed down marginally as the Federal Reserve’s possible rate hike in December draws closer. However, the significant holdings of SPY such as Apple (AAPL), Microsoft (MSFT), JP Morgan (JPM), and Wells Fargo (WFC) closed positively, up 1.3%, 0.17%, 0.31%, and 0.54%, respectively.

The SPDR Euro STOXX 50 ETF (FEZ) closed at $36.09, up 0.31%, as the Eurozone current account data were released on November 19. It inched to a new high of $29.4 billion for the month of October compared to $18.7 billion for the month of September. In the commodity space, gold was the big winner, represented by the SPDR Gold Shares ETF (GLD), which closed higher by 1.1%.

In the next part of this series, we’ll see how the banking industry outperformed the other industries.

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