Europe’s main stock market indexes nosed higher on Monday as investors cautiously contemplated a further fall in value for the Japanese yen, which sent the benchmark Nikkei index surging more than 2 percent.
Analysts predicted a subdued start to the European trading week, with voters in Italy and Cyprus to cast ballots next weekend and Wall Street’s closure for Presidents Day.
Traders also digested the relative lack of criticism of Japan at a weekend meeting of Group of 20 finance ministers. Japanese Prime Minister Shinzo Abe has introduced measures that would have the knock-on effect of driving down the yen in a bid to help manufacturers.
After starting the day in negative territory, Europe’s main indexes were mixed around midday. Britain’s FTSE 100 rose 0.9 percent to 6,318.65. Germany’s DAX climbed 0.4 percent at 7,624.8. France’s CAC-40 gained 0.2 percent to 3,667.
In a brief research note Monday, Credit Agricole’s global market research department said it expects the markets’ focus to remain this week on the prospects for recovery among the 17 European Union countries that use the euro. An EU economic forecast is expected out on Friday.
Germany’s central bank said Germany’s economy was on track to avoid recession amid signs of growth in the first three months of the year. The German economy shrank 0.6 percent in the fourth quarter of 2012. The European Central Bank predicts the eurozone economy will shrink 0.3 percent in 2013 and only start to recover later this year.
Monday, French Finance Minister Pierre Moscovici said he is sticking to the Socialist government’s increasingly tenuous goal to cut France’s state budget deficit to 3 percent of economic output by year-end. Moscovici said he didn’t believe France’s credibility would be hurt if “something exceptional intervened” that could possibly scale back the deficit reduction target.
Shares of mining giant Anglo-American skidded 2.9 percent to 19.80 pence in London.
Many eyes in Asia were on Japan, where the Nikkei 225 index in Tokyo surged 2.1 percent to close at 11,407.87. Australia’s S&P/ASX 200 rose 0.6 percent to 5,063.40. South Korea’s Kospi was marginally higher at 1,981.91.
A lack of G20 criticism for Abe’s economic policy appeared to give him a freer hand to pursue efforts to jolt the manufacturing sector.
The dollar and euro resumed their rise against the Japanese currency. The U.S. greenback fetched 93.96 yen, up 0.46 yen, and the euro also gained 0.46 yen, to 125.43 yen.
Mainland Chinese shares were mixed after a weeklong break for Lunar New Year. The Shanghai Composite Index fell 0.5 percent to 2,421.56. Hong Kong’s Hang Seng fell 0.3 percent to 23,381.94.
Last week, the yen fell to a near three-year low against the dollar and the euro. The yen has been steadily declining since December because of expectations that Japan’s central bank would take action resulting in a weakening of the yen.
Benchmark oil for March delivery was down 20 cents to $95.65 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed at $95.86 a barrel on the Nymex on Friday.