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(CEP News) - After comments by Bank of Japan Board member Miyako Suda on Thursday, Asia-Pacific fixed income markets are mixed and equities closed higher with yields on Australian 10-year bonds up 4.7 bps to 5.76% and Japanese 10-year government bonds down 2.0 bps to 1.43%.
Speaking at a meeting of business officials in Kanazawa, Japan, Suda said that should downside risks to growth diminish, an early rate hike would give the central bank room to maneuver and address the inflation problems in the region. "While the Japanese economy is in a sluggish state, containing inflation is key to sustaining economic growth," she said. "Given that global monetary conditions have been accommodative, inflation is rising around the world, and that's clearly causing inflationary expectations of people and companies to rise." The Bank of Japan is watching both upside and downside risks to the economy, added Suda. However, given the interrelation between growth and inflation, the BOJ should put equal weight on both. In Australia, total private capital expenditures advanced 5.7% compared to the first three months of 2008, according to a report from the Australian Bureau of Statistics on Thursday. The result was better than the consensus 2.7% growth projection. Meanwhile, Q1's 2.5% quarterly contraction was revised to a 1.0% rate of expansion. Sydney's S&P ASX 200 closed up 55.30 points to 5066.5. The Japanese Nikkei closed up 15.29 points to 12768.25 and the Hang Seng down 492.43 points to 20972.29. Yields on three-year Australian bonds were up 10.0 bps to 6.71 and the Australian 90-day March 09 contract was down 1.0 ticks to 93.26. The Euroyen March 09 contract was up 0.5 ticks to 99.25. The Australian dollar was up 0.78 cents to 0.8666 against the USD and up 0.77 cents to 0.9063 against the Canadian dollar. Against the yen, the U.S. dollar was down 0.57 points to 108.93 and the Canadian dollar was down 0.48 points to 104.19. The euro was up 0.50 cents to 1.4776 USD. All data taken at 4:27 a.m. EDT. By Erik Kevin Franco,
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, edited by Nancy Girgis,
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