If BOJ policymakers are looking for a benign set of global conditions in which to begin tapering their bond purchases, this could be it.
The domestic scenario may be a little murkier with bond yields elevated and the yen still anchored at historically weak levels. But yields are off their highs and stocks have flat-lined for two months, so why not start the taper now?
Investors in China, meanwhile, will be looking forward to closing out a bruising week. Stocks are on for a fourth straight weekly loss, their worst run this year, while the yuan is anchored near its lows for the year and on Thursday registered its biggest fall on the spot market in three months.
Trade war fears are growing, and this week it was Europe-China tariffs that grabbed the headlines after the European Union slapped new tariffs on electric vehicles imported from China.
Auto stocks dragged European shares lower on Thursday, the pan-European STOXX 600 index sliding 1.3% for its biggest fall in two months. Beijing’s response, whenever it comes, could send negative shocks through Chinese stocks.
