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Asia market open looks modest, ahead of Fed, BOJ meetings

CNBC logo CNBC 25-07-2016 Saheli Roy Choudhury

Futures pointed to a near-flat open for Asian markets, as traders eye key central bank meetings in the U.S. and Japan due later in the week. 

Australia's SPI futures traded at 5,471, compared to the ASX 200 (.AXJO)'s last close at 5,498.18. Nikkei (.N225) futures in Chicago traded at 16,690 while Osaka futures were at 16,620; the Japanese benchmark index finished at 16,627.25 on Friday.

"Markets seems to have speculatively priced in the next couple of months of potential monetary and fiscal stimulus within a few weeks," said Angus Nicholson, a market analyst at brokerage firm IG.

The U.S. Federal Open Market Committee is due to start a two-day monetary policy meeting on July 26, with the market expecting the Fed to keep monetary policy steady. 

"We expect the Fed to leave rates on hold as it seeks to gain more confidence that U.S. growth is back on track and that the impact from Brexit will be minimal," said Shane Oliver, head of investment strategy and chief economist at AMP Capital.

Oliver added that he expected the Fed to "raise rates in a gradual and cautious fashion."

The dollar (=USD) maintained its 97 handle, trading at 97.385 against a basket of currencies.

The Bank of Japan (8301.T-JP) (BOJ) is due to begin its two-day monetary policy on July 28, with markets expecting additional fiscal and monetary stimulus to jump-start the country's anemic growth.

On Friday, the Japanese yen, which had fallen to levels near 107.15 on Thursday, spiked to the 106 handle after the BBC aired an interview with BOJ Governor Haruhiko Kuroda, where he ruled out the possibility of "helicopter money" - or essentially printing money and distributing payouts - to tackle deflation in Japan.

The date the interview was conducted was not immediately clear, but the Wall Street Journal reported it had been recorded in mid-June.

The yen (OSEJPY=) traded at 106.32 early Monday morning.

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