Investor’s were not overly convinced yesterday by the UAE assurances that it would “stand behind” the regions debt. However, the announcement overnight that Dubai World is looking to restructure just over half $26bn of its outstanding debt has garnered more support. This has helped fuel a further rally in Asian markets but only with the support of the emergency meeting of the BOJ and the strength of Australia’s economy being highlighted as the central bank raised rates again.

The emergency meeting of the BOJ has increased speculation that they will be putting a cap on further yen appreciation. Thus, the spectre of intervention has increased. Initially reaction by the currency market is to back away from provoking the central bank any further. Japan over the years has become very adapt at intervention and currently from a technical perspective intervening in the short term is likely to see a significant move in the currency as momentum levels already support such action. Longer-term though the success of intervention is more mixed and it is unlikely that even persistence central bank intervention will change the fundamental trend of the market.

© Brooks Macdonald Asset Management 2009

Sources: Reuters: BBC, Bloomberg, Lawshare, Deutsche Bank (db), Proquote, Financial Times, Wall Street Journal, CLSA, Sharescope, Market News, Capital Economics, CNBC, Wikipedia.

Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.