EMERGING MARKETS-Latam stocks, currencies up as BOJ revamps policy ahead of Fed
By Bruno Federowski SAO PAULO, Sept 21 (Reuters) - Latin American stocks and currencies mostly rose on Wednesday ahead of a U.S. interest rate decision, as the Bank of Japan overhauled its policies after years of unprecedented money printing proved ineffective. The Brazilian real firmed 0.6 percent to its strongest in more than a week, while Mexico's IPC index advanced for a second day as traders cheered the new Japanese policy. The BOJ will switch to targeting interest rates on government debt instead of setting a fixed amount of bonds to be purchased each month. The bank also committed to letting inflation overshoot its elusive 2 percent target. Nevertheless, Credit Suisse strategist Andrew Garthwaite said the move should be seen as more of a "tightening of policy than an easing". "The market does not believe the inflation target, and our economists are also extremely skeptical the BOJ will succeed in generating sustainable inflation", he wrote in a client email. The revamped policy coincides with uncertainty over global monetary policy as European Central Bank efforts to boost stubbornly low inflation show tepid results and the U.S. Federal Reserve edges closer to lifting interest rates from near-zero levels. The Fed's rate-setting committee will release its policy statement at 2 p.m. EDT (1800 GMT) on Wednesday. Fed Chair Janet Yellen is scheduled to hold her quarterly press conference half an hour later. "The market is nearly certain that rates will not rise now and I believe it has already priced a hawkish tone" in Yellen's remarks, Fair brokerage head of currency trading Mario Battistel said. Brazil's Bovespa benchmark stock index was nearly flat. Payment processor Cielo SA dropped after Goldman Sachs cut its price target for the stock. Shares of miner Vale rose on a report on the website of newspaper O Globo that the company will sell two thirds of its fertilizer unit to Mosaic Co for $3 billion. Key Latin American stock indexes and currencies at 1505 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 905.42 0.73 13.18 MSCI LatAm 2347.66 0.1 28.17 Brazil Bovespa 57754.91 0.03 33.23 Mexico IPC 46552.71 0.46 8.32 Chile IPSA 4072.84 0.24 10.67 Chile IGPA 20268.65 0.23 11.66 Argentina MerVal 16105.27 0.57 37.94 Colombia IGBC 9857.76 0.01 15.33 Venezuela IBC 12213.35 -0.27 -16.28 Currencies daily % YTD % change change Latest Brazil real 3.2416 0.55 21.76 Mexico peso 19.8400 -0.13 -13.16 Chile peso 666.2 0.69 6.53 Colombia peso 2894 0.71 9.51 Peru sol 3.373 0.47 1.22 Argentina peso (interbank) 15.1400 0.03 -14.25 Argentina peso (parallel) 15.61 0.96 -8.58 (Reporting by Bruno Federowski; Additional reporting by Claudia Violante; Editing by Grant McCool)
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