The sharemarket closed little changed yesterday, despite news from Japan that Australia's second-biggest trading partner was taking steps to spur growth in its long-stalled economy.
The benchmark S&P/ASX 200 index closed up 1.6 points, or 0.03 per cent, at 4779.1 points.
The gauge had risen as much as 0.5 per cent in morning trade, but reversed those gains amid relatively low volume. "It's more status quo. It's met expectations," Chris Macdonald, an investment adviser at RBS Morgans, said of the Bank of Japan's announcement that it was adopting a 2 per cent inflation target and would pursue "open-ended" monetary easing.
James Rosenberg, private client adviser at Macquarie Private Wealth, described sharemarket trading as "directionless", with no leads from the US earlier in the day because sharemarkets were closed for the Martin Luther King Day holiday.
"The market's just desperately waiting for reporting season to kick off," he said. Most Australian companies are due to report first-half results over the course of next month.
In corporate news, mining services contractor Macmahon Holdings rose 5.9 per cent after winning a $1.8 billion contract to help expand Fortescue Metals' Christmas Creek Mine in Western Australia.
It was the company's biggest ever mining-related contract. Fortescue shares gained 2.4 per cent.
Fellow mining companies Rio Tinto and BHP Billiton climbed as well, finishing up 0.7 per cent and 0.1 per cent, respectively. Mount Gibson Iron climbed 3.7 per cent after saying its iron ore sales rose by more than 50 per cent in the second quarter, putting it on track to meet full-year targets.
National Australia Bank shares dropped 1 per cent after Santander UK, a unit of Spanish lender Banco Santander, denied it was in talks to buy NAB's British assets, Clydesdale and Yorkshire banks.
The other major banks finished mixed, with Westpac 0.04 per cent higher, Commonwealth Bank advancing 0.6 per cent and ANZ Bank declining 0.1 per cent.
The dollar gained against the greenback but lost ground on the yen after the BoJ's announcement. The moves, although expected, sent the dollar to a session low of Y93.78, from Y94.79 before the announcement.
"Ultimately, our currency strategists expect yen weakness to continue," said Alex Stanley, a strategist at Commonwealth Bank. "This view suggests that Japanese investors will continue to step in and buy Australian dollar bonds once a new, higher range in the Australian dollar against the yen is established."
Against the greenback, the dollar was trading at $US1.0555, up US0.44c, at 5pm AEDT in Asian trading.
"We expect the Australian dollar/US dollar pair to trade in a relatively symmetrical and narrow range for the rest of the quarter, reflecting countervailing forces before grinding lower over the remainder of the year," said strategists at Barclays.
For dollar traders, the focus now switches to fourth-quarter inflation data, due today, and whether it is low enough to allow for another rate cut on February 5.
