Asian markets open well in this almost-last 'business day' of the year, supported by Chinese data (corporate profits increase by 23% on the year, higher than expected) and by the ever-increasing probability of a change in the monetary policy of the Japan, in the direction of a quantitative expansion of the currency which for the first time sets itself the objective of bringing the inflation rate towards 2-3% (the data on consumer prices due tomorrow forecast a continuation of deflation which from years the Japanese economy was sluggish, and therefore a further incentive to change).
The MSCI Asia Pacific regional index was up 0,4% and is heading to end the year with a respectable gain of around 13%. The Tokyo Stock Exchange rose by around 1%, steadily above the 10 level of the Nikkei, and the yen weakened again, towards 86 against the dollar. The euro returned above 1,32 and oil strengthened in view of the better prospects for demand, reaching 91 $/barrel (WTI). WTI is down 8% this year versus a 3% rise in Brent. The difference between Brent and WTI is about 17 dollars in favor of Brent, against an average difference of 7 cents in favor of WTI over the five years 2006-2010. The reason lies in the increase in the supply inside the US allowed by the new techniques of extracting oil from shale and tar sands.
