Precious metals rose as dollar retreated after Federal Reserve Chairman Ben Bernanke supported the continuance of bond-purchasing program saying that economy isnt strong enough yet.
The MSCI Asia Pacific Index gained 1.8% to 134.84 at 1:58 p.m. in Tokyo. Standard & Poor’s 500 Index futures added 1% after the gauge rose to within 1 percent of its record yesterday. Gold, silver and copper soared by more than 1.9%. The Dollar Index sank 1.8%.
Bernanke backed sustained stimulus in a speech yesterday, after minutes of the Fed’s June meeting showed officials want to see more signs of job growth before starting to reduce the $85 billion-a-month bond purchases. The BOJ said it would retain its plan for monetary stimulus at the end of its two-day meeting today and the Bank of Korea kept interest rates unchanged.
“It’s a shot in the arm, so to speak,” Natalie Trunow, the Bethesda, Maryland-based chief investment officer of equities for Calvert Investments Inc. said in a phone interview for Bloomberg. “Anything that helps the economy and makes money cheap is an accommodative stance.”
The most dramatic move was in the U.S. dollar, which decreased 1.5% against the yen overnight and moved even lower Thursday after the Bank of Japan finished its monthly policy meeting. Although the central bank upgraded its assessment of the economy, it reduced its inflation target for the 2013 fiscal year to 0.6% and 2014 target to 1.3%.
S&P 500 index remained close to 0, Dow Jones Industrial average slumped by 0.06% and Nasdaq technology index added 0.47%.
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