Market update: Bank of Japan admits 2% inflation is ambitious – 26.11.2013

Source: Henderson Global Investors

The recent strength in US stocks ended on Monday. The S&P 500 finished down 0.1% led by weakness in energy and material stocks. However, the Dow Jones managed to add 0.1%. Housing data released yesterday was disappointing; pending sales of existing homes dropped for the fifth consecutive month in October according to the National Association of Realtors. Higher borrowing costs have been blamed for the slowdown. Meanwhile, the dollar appreciated against the currencies of its major trading partners, particularly the yen.

Overnight, Japan’s Nikkei 225 fell 0.7%. The minutes of the Bank of Japan’s October meeting revealed that several board members had doubts that the economy was on track to meet the central bank’s 2% inflation target. Even central bank governor Kuroda has conceded that the price target is "very ambitious", but said that progress towards the goal has been made. Turning to Europe, stock markets are in the doldrums this morning (FTSE Eurofirst 300 and FTSE 100 both 0.2% lower). Oil prices, which had weakened after the announcement of an Iranian nuclear deal have stabilised; the European Union announced that sanctions on Iranian oil could be eased as soon as December.