FTSE 100 jumps 1.75% after Japan calms rate rise fears – as it happened

European markets have also rebounded today.

Germany’s DAX has closed nearly 1.5% higher, while France’s CAC gained 1.9%.

Wall Street is holding its earlier gains too, where the S&P 500 is around 1% higher at midday in New York.

Bank of Japan deputy governor Shinichi Uchida’s speech overnight – saying the BoJ would not hike rates when markets are unstable – has given a proverbial “green light” to carry traders to resume shorting the yen and buying higher-yielding currencies and assets, says Matthew Weller, global head of research at FOREX.com and City Index.

He adds:

Not surprisingly, traders have reined in their expectations for BOJ tightening this year, and are now pricing in only an outside chance of any additional interest rate increases from the central bank this year.

That’s probably all from us today. Goodnight! GW

Newsflash: Britain’s stock market has posted its best day in over four months.

Share have rallied in the UK as global markets have recovered some of their recent losses, thanks to reassuring comments from the Bank of Japan overnight.

The blue-chip FTSE 100 index has just closed 140 points higher at 8,167 points, up 1.75% today. That’s its biggest percentage gain since 21 March.

Financial stocks led the London rally, followed by energy firms – as the oil price recovered – and industrial stocks.

The pledge from BoJ deputy governor Shinichi Uchida that the central bank will not hike interest rates when markets are unstable calmed worries of another rise in borrowing costs, which had sent the yen soaring and destabilised markets.

Fears that a US recession is close are also fading.

As analysts at TS Lombard put it:

The economic data aren’t bad enough to support the magnitude of the sell-off.

Bensons for Beds has swooped on Carpetright following its collapse, by snapping up 19 of its stores.

The bed specialist said it hopes to start trading from the first former Carpetright shop “within the next few months”.

Nick Collard, Bensons chief executive, said:

“Increasing the number of Bensons stores remains a key growth priority and we are excited about this opportunity to take on 19 store units.

“Today’s announcement supports our overall plan to expand our current 162-strong store estate to over 200 over the next few years.”

has snapped up 19 Carpetright stores after the collapse of the carpet retailer.

Carpetright collapsed last month, with the loss of around 1,500 jobs, after being hit by weak consumer spending, lower home sales and a cyber-attack.

Technology stocks are among the risers on Wall Street, as markets continue to stabilise.

Salesforce.com (+3%), Amazon.com (+2.5%), Apple (+2.27%) and Microsoft (+2.2%) are among the top risers on the Dow Jones industrial average.

Airbnb is not invited to the rally, though.

Shares in Airbnb have slumped by 14%, after it reported signs of slowing demand from U.S. customers, and missed analyst expectations for its second-quarter earnings last night.

Ding, ding goes the opening bell on the New York stock exchange…

…and up, up go stocks!

The Dow Jones industrial average, which contains 30 large US companies, is up 0.6% at 39,231 points, a rise of 233 points.

The broader S&P 500 index has gained more than 1%…. and the tech-focused Nasdaq has jumped by 1.5%.

US investors are clearly cheered by the news that the Bank of Japan is wary of further interest rate rises in the current climate.

Risk appetite has improved a little further today, thanks largely to the lack of any “major bearish news”, reports Fawad Razaqzada, market analyst at City Index and FOREX.com

With the economic calendar also being light, investors are making a more sober assessment of the events over the past week or so and are realising that there may have been a bit of an overreaction to the Bank of Japan’s larger than expected policy tightening last week that triggered all the volatility as investors were forced to unwind carrying trades.

That’s not to say we are completely out of the woods just yet. But there’s at least some stabilisation in the markets, which should allow some markets to re-align with the fundamentals.

Walt Disney has beaten Wall Street expectations in its latest financial results, despite a decline in earnings from its theme parks.

Disney reported a rise in revenues in the last quarter to $23.2bn, up from $22.3bn a year earlier.

This helped the company return to profit, with pre-tax income of $3.1bn, up from a $100m loss in Q2 2023.

Operating profits at its Entertainment unit more than doubled. That was partly due to the success of animated Pixar film “Inside Out 2”, which Disney says grossed more than $1.5bn globally, making it the most successful animated film ever.

But incomes from Disney’s Experiences arm, including theme parks, fell 3%.

Shares in Disney are 0.3% higher in pre-market trading.

Garry White, chief investment commentator at Charles Stanley, says:

“Walt Disney’s third-quarter results beat market expectations and management raised earnings guidance for the full-year. Its combined streaming service was profitable – and this profitability is expected to improve in the current quarter following price rises. Disney’s studio business performed well, with Inside out 2 and Kingdom of the Planet of the Apes both being high grossing films.

These are not ‘Mickey Mouse’ numbers, but markets are currently jittery and are focusing on the negative. Although the statement was upbeat, news from the Magic Kingdom was not so magical. A slowdown at its iconic theme parks following a surge following the Covid-19 pandemic likely to continue for the next few quarters, with income expected to decline year on year in the fourth quarter.

Time for a quick catch-up on the markets.

Shares have rallied on Asia-Pacific bourses, and across Europe, after a senior Bank of Japan policymaker tried to calm fears of further interest rates rises.

Japan’s Nikkei continued its recovery from its slump on Monday, gaining 1.2%, while Hong Kong’s Hang Seng index gained almost 1.4% and South Korea’s Kospi rose 2.15%.

In Europe, the UK’s FTSE 100 index is now up 90 points, or 1.13%, adding to earlier gains as traders anticipate a rally on Wall Street.

Germany’s DAX is 1.25% higher and France’s CAC has jumped by 1.6%.

Shares picked up after Bank of Japan’s deputy governor Shinichi Uchida indicated the BoJ would not hike interest rates when markets are unstable.

Uchida told businss leaders tht the volatility in domestic and overseas financial markets means “it is necessary to maintain current levels of monetary easing for the time being”.

David Morrison, senior market analyst at fintech and financial services provider Trade Nation says Uchida’s comments dampened fears that the BOJ would rush to raise rates further, after last week’s bigger-than-expected hike which preceded the recent stock market rout.

Morrison adds:

The speech has helped to soften the yen and give back some of last month’s outsized gains. That should take some pressure off those still exposed to the yen carry-trade, of which there are still significant numbers.

The US Dollar Index is firmer this morning, thanks mainly to the weaker yen, and also a pick-up in US bond yields. European stock indices were all stronger in early trade. Tensions have eased to some extent, and bargain hunters are out there looking for beaten down equities. But as with every earth-moving event, it’s sensible to prepare for aftershocks.