Copper hit its highest since May on Wednesday after the Bank of Japan followed the U.S. Federal Reserve and eased monetary policy, but the gains were seen as short-lived as traders reported fading interest from top consumer China.
The BOJ boosted its asset purchases by double the usual amount as slowing global demand and mounting tensions with China have hurt chances of a near-term recovery in the export-reliant economy.
Investors had been searching for fresh catalysts after last week's sharp boost to asset prices inspired by the Fed's stimulus, known as quantitative easing (QE).
Traders said the BOJ's move had boosted price expectations for metals, which tend to rise in value as paper currency depreciates, while the price rise also forced shorts to cover as trading in Europe began.
"It's just one big global competition to see who can out QE the other now," said a trader based in Singapore.
Copper prices, however, were set to consolidate this week, as the market digests the impact of easing on the global economy and eyes economic data for any proof of a pick-up in growth, said Melbourne-based commodity analyst Natalie Robertson at ANZ. . .View Full Article