6 Gut checks pre market open

Need to Know APRIL 10, 2013 6 gut checks before the stock market's opening bell   Good morning. Investors are becoming increasingly attuned to the potential side effects of the Japan's aggressive monetary easing, which may be spurring an international hunt for yield by Japanese investors. Japanese government bond yields remain extremely low, but have jumped in recent days as investors try to figure out what the Bank of Japan's aggressive bond-buying plan means. Trading in JGB futures was temporarily suspended again on Wednesday as bond prices fell. As the Financial Times puts it: "Investors are caught between knowing the BOJ is backstopping the market but wary of committing to such meager yields." Will it all translate into support for U.S. markets? It's already getting credit for lifting the euro and euro-zone credit markets. "Investors globally have been looking into potential investment destinations of cash/JGB-rich Japanese asset managers. After all, one of the stated intentions of the BOJ's 'intervention' is to encourage Japanese investors to head overseas, bringing down the yen in the process," noted strategists at UBS. Key market gauges: U.S. stock index futures were pointing to a positive start for Wall Street a day after the Dow Jones Industrial Average finished at a record closing high and the S&P 500 ended within a whisker of its all-time high close. European shares traded higher, getting a lift from the aforementioned China trade data, following on the heels of an advance by most Asian markets . The economy: No major data are on tap, but minutes of the Federal Reserve's last policy meeting on March 19-20 will clearly be in the spotlight as investors attempt to gauge just how soon the central bank may begin to scale back its bond-buying program. The weak March jobs report  has cooled speculation the Fed could soon move to slow the pace of purchases, but investors will be attuned to any nuances in the text. The minutes are set for release at 2 p.m. Eastern. Meanwhile, President Barack Obama will unveil his 2014 budget plan on Wednesday, offering entitlement cuts that are unlikely to placate Republicans but that have enraged some Democrats . Earlier, China helped lift sentiment, reporting an unexpected swing to a trade deficit in March, thanks to a surge in imports . The buzz: First Solar Inc.  is trending on StockTwits, a day after jumping 46% after its 2013 guidance topped Wall Street estimates. J.C. Penney Co.  also remains a hot topic in the wake of the ousting of CEO Ron Johnson and the return of his predecessor, Myron "Mike" Ullman. Shares tumbled 12% on Monday. The chart of the day:  Courtesy of Sober Look , this chart shows just how far analysts at Credit Suisse expect the Bank of Japan's balance sheet to soar as a proportion of the nation's GDP, easily outstripping other major central banks, with the exception of the Swiss National Bank over the next two years. Sober Look Meanwhile, it's shaping up as scary-chart day on Twitter. The call of the day: Don't fight the BOJ. With the dollar rising rapidly to within spitting distance of the 100-yen level in the wake of the Bank of Japan's decision to open its spigots, strategists at UBS are lifting their forecast for dollar/yen . UBS had forecast the dollar to hit 100 yen by year end. With the currency knocking on the door, "the strong easing initiated this month by the Bank of Japan suggests significant more yen weakness is likely," wrote Mansoor Mohi-uddin, head of foreign exchange strategy at the bank. As a result, UBS upped its forecast to call for the dollar to trade at 110 yen by the end of this year and 120 yen by the end of 2014. "As a result, we think the yen is only about half way through its current declining trend," he writes. Random reads: "Taliban bombers, contract killers -- and one of the world's most successful stock markets." A look at Karachi , Pakistan's financial capital. The Metropolitan Museum of Art scores a "truly transformational" haul, with cosmetics titan Leonard Lauder pledging his $1 billion Cubist art collection. --William L. Watts Follow on Twitter: @wlwatts Get the latest news on our mobile site: http://www.marketwatch.com/m MarketWatch has sent you this newsletter because you signed up to receive it. To ensure you receive this newsletter in the future, please add marketwatchmail.com to your list of approved senders. Sent to: alanrussell@princetoncap.com Unsubscribe | Subscribe Copyright 2013 MarketWatch, Inc. All rights reserved. MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks of MarketWatch, Inc. By using this site, you agree to the Terms of Service and Privacy Policy (updated 6/26/07). MarketWatch - Attn: Customer Service, 201 California St., San Francisco, CA 94111