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Shimmering gold gives markets some Christmas cheer

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By Tom Westbrook

SINGAPORE (RockedBuzz via Reuters) – Asian stocks were trying to enter the party mood on Wednesday, and posted small gains with even Japan’s Nikkei breaking its two-month low after the Bank of Japan’s surprise decision to ease its tight control over government bond yields.

The broader MSCI index of Asia-Pacific stocks outside Japan rose 0.6%. Japan’s Nikkei fell 0.2%, narrowing earlier losses by about 1%. Gold miners in Australia led a 1.3% jump for the S&P/ASX 200.

Wall Street posted a four-day losing streak overnight and the S&P 500 futures were up 0.5% in Asian trading. [.N]

The Bank of Japan (BOJ) expanded the trading band for 10-year government bond yields on Tuesday from 25 basis points (bps) on either side of zero to 50 bps.

This triggered a jump in the yen, which had spent most of the year sliding due to low yields in Japan, selling off in the Japanese stock market and a sell-off in bonds around the world.

The resulting drop for the US dollar caused spot gold prices to test six-month highs and gold miners soared higher. Newcrest was up 6% in Sydney and smaller names even more. Global miners BHP and Rio Tinto rose 2%.

Spot gold bought $1,816 an ounce. [GOL/]

“The tone is good, we’re having our little version of a Santa Claus gathering,” said Damian Rooney, a trader at Argonaut Securities in Perth, referring to typical late December gains as markets move towards the end of the year. year.

The yen held mostly large gains from Tuesday, at 132.09 to the dollar, and traders were positioning themselves for further dollar losses.

Some of the dollar’s main drivers of gains – an increasingly weak yen, a struggling Chinese yuan and outsized increases in US yields – are starting to change. The euro held at $1.0625, not far from last week’s six-month high. [FRX/]

Bond markets have been kept under pressure as the last major central bank to peg its bond market has begun to loosen its iron grip on yields.

Benchmark 10-year Treasury yields increased by four basis points to a three-week high of 3.722%. Japanese 10-year yields rose 5.5 basis points to 0.45%, close to the BOJ’s 0.5% ceiling. [JP/]

Brent crude futures settled at $80.24 a barrel.

(Editing by Christian Schmollinger)