Photo: Giampaolo Macorig / Flickr
Huge swings in the Japanese yen, euro, and U.S. dollar came in the wake of some wild news out of Japan and Italy.First the scoreboard:
Dow: 13,784, -216.4 pts, -1.5 per cent
S&P 500: 1,487, -27.7 pts, -1.8 per cent
NASDAQ: 3,116. -45.5 pts, -1.4 per cent
And now the top stories:
- Over the weekend, reports surfaced that Japan would be sending Haruhiko Kuroda to head the Bank of Japan. Kuroda, the head of the Asian Development Bank, has a reputation for being uber-dovish, which is exactly the characteristic Prime Minister Shinzo Abe has been looking for. When Asian markets opened, the Japanese yen tanked and the Nikkei surged.
- Without question, the big story of the day has been the Italian general election. The initial exit polls showed that Pier Luigi Bersani won big, which is what the market wanted. With Bersani came the expectation that Italy’s ongoing reforms to manage its massive debt load would continue. European markets closed up at 11:30 AM ET.
- However, as more votes were counted, it became apparent that the race was actually much closer than expected with Silvio Berlusconi getting much more traction than anyone expected. At this point, it’s looking like gridlock with no clear winner. As these headlines rolled out, the euro tanked.
- Meanwhile, the Japanese yen recovered all losses and surged against both the euro and the U.S. dollar. U.S. stocks closed at their lows of the day.
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