Abenomics Third Arrow Could Be Close Boosts Nikkei

The Nikkei climbed 2 percent on Wednesday, with talk that Japan’s prime minister could add details to his economic reform plans this week helping the blue-chip stock index outpace its Asian peers.

Speculation that Prime Minister Shinzo Abe could on Thursday flesh out details of the so-called “third arrow” of a three-pronged strategy to get Japan’s economy back on its feet, pushed the yen down and gave the Nikkei some momentum, traders said.

“I think that rumor is certainly out there and we are hoping for more details on the reform plans,” said Glenn Wood, head of sales, global, at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. “The market still has a long way to go in terms of factoring in any upside on the third arrow of Abe’s economic reform plans.”

The Nikkei was up 2 percent in early afternoon trade in Asia at about 15,587 points, nearing a 6-1/2 month peak hit earlier this month. It outperformed the MSCI index of Asia-Pacific shares excluding Japan which was up just 0.2 percent with most markets sidelined ahead of Wednesday’s Federal Reserve decision.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza