The yen pared its advance as investors geared up for a Bank of Japan decision that may see officials discuss an adjustment in monetary policy. Japan’s currency remained on track for a fifth day of gains as traders weighed a Nikkei report which said the BOJ may consider tweaking the yield curve control policy at its meeting on Friday. The nation’s 10-year bond yield climbed above the central bank’s cap for the first time since March. The Topix and Nikkei 225 equity indexes both slid 1%, leading declines in Asia. Stocks in Hong Kong erased losses as investors assessed a report that said the government was considering promoting investments in the consumer, media and telecom sectors. China Evergrande New Energy Vehicle plunged 68% as it resumed trading following a yearlong suspension. Banking shares in Tokyo were among a small group of Japanese stocks that gained on the YCC tweak report. While most economists predict the BOJ will stand pat Friday, Nikkei said the central bank will consider letting 10-year yields rise to some degree beyond its 0.5% cap. The news, which came out in Thursday’s New York session, pushed up Treasury yields, and saw US equities swing to a loss. A BOJ shift would have significant implications for global fund flows. Japanese investors are the biggest foreign holders of US government debt, and also own sizable amounts of European and Australian bonds, among other assets. Some investors are concerned that higher yields at home may lead Japanese institutions to sell overseas holdings and bring that cash home. The dollar was steady in Asia, while Treasury 10-year yields were little changed at 3.98% after jumping 13 basis points Thursday. Yields on 10-year bonds in Australia rose 13 basis points, while those in New Zealand advanced eight basis points. Traders also ramped up protection against a surge in the yen, with a gauge of how much more traders are paying to hedge gains in Japan’s currency, rather than a fall, reaching the highest level in over three years. Meanwhile, inflation in Tokyo ran slightly faster than economists were expecting in July, a government report showed Friday, an outcome that casts some doubt on the BOJ view that price growth will slow below its target in the coming months. October is the more likely timing for any BOJ policy tweak, according to Win Thin, global head of currency strategy at Brown Brothers Harriman & Co. “Updated macro forecasts will be released and other reports suggest upward revisions to the FY23 core inflation forecast followed by a possible cut in the FY24 forecast,” he wrote in a note. US equities had gained earlier Thursday as domestic gross domestic product picked up steam in the second quarter, while pending home sales unexpectedly climbed in June. Gold slid after the data, but has since bounced back slightly. Oil fell Friday, but still headed for the longest run of weekly gains in more than a year on an improving macroeconomic outlook and signs of a tighter market. US After Hours SAM +10%, ROKU +8.7%, INTC +7.8%, FSLR +7.4%, KLAC +2.9% higher on earnings; SNBR -27.2%, ENPH -12.6%, SG -12.6%, JNPR -7.4%, UCTT -6.5%, VRSN -5%, DECK -3.5% lower on earnings.
Nikkei -1,17% Hang Seng +1,24% CSI +2,25% Shanghai +1,74% Shenzen +1,20%
Eur$ 1,0975 CNH 7,1605 CNY 7,1603 JPY 139,90 GBP 1,2789 CHF 0,8698 RUB 90,6899 TRY 26,9615 WTI$ 79,77 Gold 1,952 BTC 29,225 ETH 1861
S&P +0,34% Nasdaq +0,47% EuroStoxx -0,07% FTSE -0,28% Dax -0,07% SMI
Macro :
- Traders Are Super Sensitive to the BOJ But It’s Not Yet Time
- Fed’s New Network Will Provide Boon to Fintechs, Plaid CEO Says
- US Hedge Funds Sell Chinese ADRs on Rally, Morgan Stanley Says
- Spain’s curbs on Uber-style apps face probe over breach of EU law
Keep an eye on :
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- ALLFG NA : Allfunds 1H Adjusted Ebitda EU171.8M Vs. EU188M Y/y
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- EN FP : Bouygues 1H Current Operating Income EU681M Vs. EU492M Y/y
- BRNL NA : Brunel 2Q Revenue EU327.8M Vs. EU289.1M Y/y
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- CAP FP : Capgemini 1H Net Income Beats Estimates (1)
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- COFB BB : Cofinimmo 1H Operating Profit EU134.8M Vs. EU125.4M Y/y
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- ENI IM : Eni Profit Falls on Lower Energy Prices, Beating Estimates
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- EVT GY : Evotec SE Cuts FY Revenue Forecast, Citing Cyberattack
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- FORN SW : Forbo 1H Sales Misses Estimates
- FPE GY : FUCHS SE 1H Ebit +11%; 2023 FCF Before Acquisitions View Raised
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- HAG GY : Hensoldt 1H Adjusted Ebitda Margin 11.3%
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- PROX BB : Proximus 2Q Adjusted Ebitda Meets Estimates
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- VK FP : Vallourec 2Q Ebitda Beats Estimates
- DG FP : Vinci 1H Ebit Beats Estimates
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