Asian equities traded mixed in a cautious open while the yen was on the front foot following potentially hawkish remarks by the Bank of Japan governor.
(Bloomberg) — Asian equities traded mixed in a cautious open while the yen was on the front foot following potentially hawkish remarks by the Bank of Japan governor.
Stocks rose in South Korea and were higher in Japan’s Topix index, where financial stocks led the gains, while shares fell in Australia. Futures for Hong Kong equities were unchanged as the market is scheduled to reopen after a closure Friday due to a heavy rainstorm.
US stock futures were little changed early Monday after shares saw small moves at the end of the week, with the S&P 500 edging higher after a three-day drop. Nvidia Corp. and Tesla Inc. weighed on the megacap space, while Apple Inc. bounced after a rout that erased $190 billion in value just a few days before the unveiling of the iPhone 15, new smartwatches and the latest AirPods.
The yen strengthened 0.6% against the greenback and yield on the government’s 10-year bond jumped to the highest since 2014 after Ueda told the Yomiuri newspaper there may be sufficient information by year-end to judge if wages will continue to rise, which is a key factor in deciding whether or not to end super-easy policy. While this will fuel speculation that negative rates and yield-curve control are drawing near a close, the central bank chief also said the BOJ is some distance away from achieving its price stability target.
Ueda’s comments could be taken as asking market participants to prepare for a possible end to negative rates in the BOJ’s January policy meeting, according to Yasunari Ueno, chief market economist at Mizuho Securities, in a note.
Treasuries were little changed, while the dollar fell against all of its Group-of-10 counterparts after its recent rally drove the currency to a record streak of weekly gains. The greenback has been bolstered recently by bets the Federal Reserve will keep interest rates higher for longer as the US defies a global economic gloom.
The Bloomberg Dollar Spot Index notched its eighth straight up week last week, the longest such run since 2005. The advance sent its 14-day Relative Strength Index above 70 — which is seen by some on Wall Street as a sign of an overbought market.
Treasury Secretary Janet Yellen said she’s increasingly confident that the US will be able to contain inflation without major damage to the job market, hailing data showing a steady slowdown in inflation and a fresh influx of job seekers.
A key data to help investors gauge the Fed’s next move is US inflation that will come out later this week.
“We saw a slight uptick in CPI in August, but I would anticipate it to be relatively flat in September,” Shana Sissel, Banrion Capital Management CEO, said on Bloomberg Television. With some weakness also in the job market, “the Fed will likely pause in September as they wait to see what happens with the data through the month of September,” she said.
Elsewhere, oil declined after a two-week rally and gold was little changed.
Key events this week
- UK jobless claims, unemployment, Tuesday
- Eurozone industrial production, Wednesday
- UK industrial production, Wednesday
- US CPI, Wednesday
- Eurozone ECB rate decision, Thursday
- Japan industrial production, Thursday
- US retail sales, PPI, business inventories, initial jobless claims, Thursday
- China property prices, retail sales, industrial production, Friday
- US industrial production, University of Michigan consumer sentiment, Empire Manufacturing index, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 9:29 a.m. Tokyo time. The S&P 500 rose 0.2% on Friday
- Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 0.1%
- Japan’s Topix rose 0.3%
- Australia’s S&P/ASX 200 was little changed
- Hong Kong’s Hang Seng futures were unchanged
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.1% to $1.0712
- The Japanese yen rose 0.6% to 146.93 per dollar
- The offshore yuan rose 0.1% to 7.3563 per dollar
- The Australian dollar rose 0.3% to $0.6393
Cryptocurrencies
- Bitcoin fell 0.1% to $25,789.5
- Ether fell 0.3% to $1,614.54
Bonds
- The yield on 10-year Treasuries advanced one basis point to 4.28%
- Japan’s 10-year yield advanced four basis points to 0.690%
- Australia’s 10-year yield advanced five basis points to 4.13%
Commodities
- West Texas Intermediate crude fell 0.9% to $86.73 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Eijiro Ueno.
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