Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Summary: Improving economic data supported a positive finish in a strong week for Japanese stocks in which the broad TOPIX Index had its best weekly performance in a year, gaining 4.4%. CPI rose 0.1% y-o-y in October, the fifth-consecutive increase, but did fall short of economists' estimate of 0.2%. October unemployment fell by 0.1% to 4.1%. Household spending declined 2.4% in October, but was better than an expected 4.0% drop. The debate continues whether the Bank of Japan will raise rates this month or wait until next year. A Mitsubishi UFJ Securities analyst commented, "There's no need to keep procrastinating as long as the central bank has already decided it's going to do it." Banks stand to benefit the most as lending margins would improve. Some analysts argue a 0.25% hike to a 0.50% target is too insignificant to move the market.
Related links: Media coverage: Bloomberg . Commentary: Bullish on Japan -- Nikkei Primed for Big Rally • What Happened to the Bull Market in Japan? • Weak Yen to Persist, BoJ Not Seen Hiking Rates Until Q1'07 • BoJ Keeps Target Interest Rate at 0.25% • Japan's Q3 GDP Surprises to Upside, Stocks Rebound.
Potentially impacted stocks and ETFs: Mitsubishi UFJ Financial Group (NYSE:MTU), Mizuho Financial Group (NYSE:MFG) • ETFs: iShares MSCI Japan Index (NYSEARCA:EWJ), iShares S&P/TOPIX 150 Index (ITF)
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