European markets enjoy modest bounce at the open

Japan’s market was closed on Thursday when most Asian shares tumbled, contributing to the global slump.

Investors will be watching markets in Hong Kong after the Hang Seng index shed more than 4% on Thursday.

As the HSBC team says, this will make intervention harder to justify and “there would be little empathy from other nations for Bank of Japan intervention”.

“Global central bank policy is increasingly becoming a symptom of what’s wrong with the financial markets and real growth than a cure for economic ills”, said Bernard Aw, market strategist at IG in Singapore.

Economic Revitalization Minister Nobuteru Ishihara, who took office late last month, said at a separate press conference, “It’s clear to all that recent foreign exchange fluctuations have been a bit too wild”. Yet she also highlighted growing risks facing the economy.

“As long as there is speculation about intervention, speculators may test whether the (Bank of Japan) may actually act, so we are bracing for another sell-off in stocks”, he said.

Stocks in the US have opened strongly, taking their cue from a buoyant performance in Europe.

Gold surged to one-year high of $1,262.90 per ounce on Thursday, rising over four percent in its biggest daily percentage gain since September 2013.

The Standard & Poor’s 500 lost 22.78 points, or 1.2 percent, to 1,829.08. Plunging oil prices and low inflation have added to the market’s jitters that the global economy is sputtering.

At first, the rate cut had the desired effect of pushing the yen down against its USA counterpart and boosting the level of Japanese stocks.

Both gauges extended their losing streak to a third session. The DAX is up 2.3 percent at 9,080.

In New York, the Dow Jones industrial average was up 95.33 points, or less than one per cent, at 15,755.510.

On Friday, telecommunication and consumer shares pulled down the Japanese market most, with the sectors each off more than 6%. In December, the Fed raised interest rates for the first time in almost a decade and indicated that further increases, possibly as soon as March, were in the offing.

The news that US retail sales rose, albeit modestly, in January has helped to further ease tensions in financial markets.

Craig Erlam, chief market analyst at OANDA, says Yellen’s comments are going to be “monitored extremely closely” and markets could be “very sensitive to them”.

STRONG QUARTER: Cisco Systems jumped 8.8 percent a day after the seller of routers, switches, software and services reported better-than-expected quarterly results and announced a stock buyback plan and dividend increase.

On Friday morning in Asia, it was trading around $27.50 a barrel.

Even amid the stock rout, 53 companies gained Friday, including those dependent on domestic demand like restaurant operator Skylark and shoe seller ABC-Mart.

But even as brokers were focusing their attentions on persuading Mrs Watanabe to buy shares Japanese institutions had privately expressed doubts over the bank’s long-term business model. The bank’s CEO sought to reassure employees on Tuesday, saying in an internal note that the company’s finances were “rock-solid”.

Meanwhile he lamented: “Drastic fluctuation of share prices is not desirable”.

However, oil soared nearly six percent following a report that producers’ group Opec could be willing to cooperate on output cuts to stem a crash in prices that has sent shockwaves through world markets.

Banks in Europe ended 6.3 percent.SX7P lower, while the S&P financial index.SPSY dropped 3 percent.

“Market cap of banks are big”. Yellen was scheduled for a second day of testimony before US lawmakers on Thursday.