Market's slide extends to fourth week
The sharemarket lost more ground this week, for the fourth week in a row, during big days of central bank announcements.
For the week, the benchmark S&P/ASX 200 fell 75.1 points, or 1.5per cent, at 4891.4 points, while the broader All Ordinaries lost 80.6points, or -1.6 per cent, at 4899.2 points.
The top of the week was focused on Europe and the problems of Cyprus. Then, softer than expected US manufacturing data for March also weighed on Wall Street.
Locally, Treasurer Wayne Swan extended the term of Reserve Bank governor Glenn Stevens this week by another three years.
Mr Stevens' term will now expire in September 2016, as he had requested. It is widely expected that deputy governor Philip Lowe will replace him in 2016.
Then, on Thursday, the Bank of Japan announced a huge asset purchase program in a bid to jolt its depressed economy back to life.
Its central bank said it would double its monthly bond purchases - spending seven trillion yen a month ($A69.88 billion) - in a bid to double the amount of money in its economy by the end of next year.
It hopes to achieve 2 per cent inflation by the end of 2014. (The 2 per cent target is significant. It has only been above that level twice in the last 20 years.
Economists and strategists largely welcomed the program.
For the last 10 years, Japan has struggled with persistent deflation - with depressed wages, profits and spending - with total CPI averaging -0.1 per cent a year. It was the first decision of the bank's new governor, Haruhiko Kuroda, and was taken as a sign of his strong desire to bring the economy back to life.
"We've essentially had 20 years of Bank of Japan easing that has been derided as pushing on a string," Westpac's senior currency strategist Sean Callow said. "And it is possible that that is still what happens ... but the Japanese stockmarket, and currency in particular, have responded with great optimism, and that's very important."
He also said: "I did a calculation yesterday. The scale of their quantitative easing program is about twice as large on a monthly basis as the US Fed's current rate, when you adjust for GDP, so it's massive".
But not everyone was convinced. "Monetarism has crawled, zombie-like, from the economic grave," UBS deputy head of global economics, Paul Donovan, wrote to clients.
"Japan has adopted the policy of the economic un-dead, declaring it will target base money rather than interest rates. Good news - the Bank of Japan has influence over base money. Bad news - base money has little influence over the economy."
It saw the dollar move sharply against the yen, pushing past the 100-yen level for the first time since August 2008. On Friday, a sharp fall in the value of the yen pushed the dollar lower against the greenback
Commonwealth Bank currency strategist Peter Dragicevich said news of Japan's massive move had boosted the US dollar against all major currencies.