Yen Advances for Second Day, Tech Stocks Rise: Markets Wrap
(Bloomberg) — The yen extended Monday’s advance to reach the strongest level since February, aided by rising expectations of a Japan interest-rate increase next week. Chip stocks climbed to lift Asian equities.
The MSCI Asia Pacific Index of regional equities rose 0.2% with Korea’s Kospi climbing 1.1% and Japan’s broad Topix dropping 0.4%. US stock futures were muted in early Asian trade after US financial markets were shut Monday for a public holiday.
The yen advanced 0.5% to 153.56 per dollar after rallying 1.2% on Monday. The currency has now surpassed the peak it reached after coordinated intervention by Japan and the US. The Bloomberg dollar index slipped 0.1% in early Tuesday trade. Copper climbed to an all-time high on Monday.
Brent crude edged lower Tuesday after briefly topping $98 a barrel in the previous session. Iran said a deal with Oman to manage shipping through the Strait of Hormuz is imminent, raising questions over how the US will respond after striking Iranian vessels over the weekend. Tehran also warned ships face the risk of attack near Oman’s coastline.
Higher energy prices are adding to inflation concerns as investors weigh the prospect of tighter monetary policy. A packed week of US data culminates with Friday’s inflation report, which may prove pivotal to whether the Federal Reserve raises interest rates or stays on hold.
“Markets will be adjusting their positioning heading into the Fed’s blackout period,” said Geoff Yu, a senior macro strategist at BNY. “The risk is the Fed turning hawkish and that will be reflected in equities. Bond markets will remain nervy and we remain focused on fixed-income volatility.”
In Asia, the yen will remain in the spotlight after the currency abruptly extended gains Monday, rising as much as 1.4% to 154.06 per dollar in London trading. There was no clear catalyst, with some traders pointing to thin liquidity during the US holiday and others citing a break through the key 155 level.
The yen began rallying last week as growing bets on Bank of Japan interest-rate hikes triggered a sharp shift in sentiment toward the currency.
In commodities, copper surged to a record on the London Metal Exchange, extending a weeks-long rally driven by expectations that President Donald Trump will broaden US tariffs to imports of refined metal. Gold advanced in early Tuesday trading.
While US economic data will likely provide the biggest catalyst for markets this week, earnings will also help shape the outlook for key equity sectors. Results from Oracle Corp. and Adobe Inc. on Thursday will offer a fresh read on AI infrastructure spending and the threat the technology poses to software makers.
“As corporate profits remain on an uptrend, any bout of weakness in equity prices would leave them cheaper,” wrote JPMorgan Chase & Co. strategists, led by Mislav Matejka. “We believe one should continue using the dips to add.”
Corporate News:
Novo Nordisk A/S stopped two more trials for its experimental heart disease medicine, in a further blow to the drug’s prospects. Abu Dhabi National Oil Co. is in talks with the biggest refining companies in Thailand and Africa to invest in their businesses. Uber Technologies Inc. has hired banks to hold calls with investors this week for a debut euro bond sale. Jaguar Land Rover Automotive Plc will slash some 4,000 jobs as Britain’s largest carmaker grapples with US tariffs, the fallout of a crippling cyberattack and intense competition. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 9:36 a.m. Tokyo time Hang Seng futures fell 0.3% Nikkei 225 futures (OSE) fell 0.1% Japan’s Topix fell 0.5% Australia’s S&P/ASX 200 fell 0.5% Euro Stoxx 50 futures were unchanged Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1628 The Japanese yen rose 0.5% to 153.58 per dollar The offshore yuan was little changed at 6.7078 per dollar Cryptocurrencies
Bitcoin was little changed at $79,166.26 Ether fell 0.1% to $2,491.35 Bonds
The yield on 10-year Treasuries was little changed at 4.79% Japan’s 10-year yield advanced three basis points to 2.930% Australia’s 10-year yield was little changed at 5.20% Commodities
West Texas Intermediate crude rose 0.9% to $92.34 a barrel Spot gold rose 0.5% to $4,425 an ounce This story was produced with the assistance of Bloomberg Automation.
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