The yen rose after Bank of Japan Governor Kazuo Ueda signaled it’s still on the path to raise interest rates. Asian equities erased losses with a boost from Chinese shares, as traders wait on Federal Reserve Chair Jerome Powell’s Jackson Hole speech later Friday. The Japanese currency rose as much as 0.7% versus the dollar, while government bond futures fell. In replies to lawmakers, Ueda said the BOJ’s stance hadn’t changed, provided inflation and economic data continue in line with its forecasts. The comments come after his deputy had sought to reassure markets that further hikes would also depend on the state of the market, after the central bank’s increase in July trigger a massive selloff in global equities. Ueda’s comments in parliament “put an end to speculation that the BOJ could back off from hiking again due to the market turmoil seen,” said Charu Chanana, head of currency strategy at Saxo Markets. “Keeping the door open for further rate hikes is positive for yen and negative for stocks at the margin.” Earlier, Japanese inflation data exceeded forecasts. Consumer prices in July rose 2.8% from a year earlier, the same as the prior month and higher than the 2.7% expected by economists. Chinese shares gained, helping a regional stock index erase earlier losses. The country will speed up purchasing of unsold homes and turn them into affordable housing, Vice Minister of Housing and Urban-Rural Development Dong Jianguo said. Equities in Hong Kong, Australia and South Korea declined, echoing Thursday’s selloff in US stocks where both the S&P 500 and tech-heavy Nasdaq 100 indexes retreated. Elsewhere, Alibaba Group Holding Ltd. shareholders have approved a plan to upgrade its Hong Kong listing to primary status on Aug. 28, a maneuver expected to attract billions of dollars in investment from mainland China. Meanwhile, shares of Chinese companies NetEase, Baidu and Bilibili dropped as these tech firms reported weak earnings. The 10-year Treasury yield fell one basis point to 3.84%, while the policy-sensitive two-year yield dropped two basis points to 3.98%. The latter has fallen seven basis points this week. An index of dollar strength slipped after a Thursday advance. Australian and New Zealand bond yields climbed. Swaps traders pulled back marginally their expectations for US rate cuts this year, though still broadly priced in almost 100 basis points of cuts through December. The focus is now on Powell’s address later Friday at the annual Jackson Hole symposium in Wyoming. Investors waded through a raft of remarks from US policymakers, with Fed Bank of Kansas City President Jeffrey Schmid saying he wants to see more data before supporting cuts. His Boston counterpart Susan Collins said “a gradual, methodical pace” is likely to be appropriate. Her comments were echoed by Philadelphia Fed President Patrick Harker in a CNBC interview. On the economic front, the latest figures were mixed. Jobless claims data showed the labor market is cooling only gradually — rather than rapidly slowing amid elevated rates. US manufacturing activity shrank at the fastest pace this year. And existing-home sales increased for the first time in five months. In commodities, oil headed for a weekly loss — after hitting the lowest close since January midweek — on a challenging demand outlook, sinking product prices, and US efforts to secure a cease-fire in Gaza. US After Hours WDAY +10.3%, CAVA +7.7%, ROST +5.6% higher on earnings; INTU -2.9% lower on earnings.
Nikkei +0.39% Hang Seng -0.36% CSI +0.28% Shanghai -0.05% Shenzen -0.08%
Eur$ 1.1125 CNH 7.1389 CNY 7.1379 JPY 145.88 GBP 1.31008 CHF 0.8517 RUB 91.4943 TRY 33.9612 WTI$ 73.09 +0.11% Gold 2,494 +0.37% BTC 60,696 +0.02% ETH 2,639 +0.52%
S&P +0.33% Nasdaq +0.53% EuroStoxx -0.02% FTSE +0.34% Dax +0.02% SMI -0.83%
Macro :
- US State Dept Approves Possible $405M Military Sale to Norway
- China Steel Crisis Goes Global as Materials Earnings Outlook Cut
- Yen Gains as Ueda Refuses to Soften Policy Stance: Macro Squawk
- BOJ Gov Ueda: 2Q GDP, Wage Data Show Econ Moving in Line With BOJ Forecast
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