(Bloomberg) — Asian shares may struggle to find a cautious opening for trade across the region on Monday, with currency markets at the forefront following comments that the yen could be a potential buyer of the Bank of Japan.
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Australian futures were a fraction higher, a gauge of U.S.-listed Chinese shares fell and Japanese contracts showed a small gain in trade before the BOJ’s Kazuo Ueda interview hit the market. Hong Kong will reopen after being closed on Friday due to heavy rain.
The yen strengthened below $147 after Ueda told the Yomiuri newspaper that there may be enough data by the end of the year to judge whether wages will continue to rise, a key factor in deciding whether to end ultra-easy policy. Although this has fueled speculation that negative rates and yield-curve control are on the horizon, the central bank’s chief said the BOJ is a short way from achieving its price stability target.
The dollar fell against other Group-10 peers after a recent rally sent the currency to record weekly gains. The greenback has recently strengthened on bets that the US Federal Reserve will keep interest rates on hold for longer, defying a global recession.
The Bloomberg Dollar Spot Index recorded its eighth straight week of gains – its longest streak since 2005. The advance sent the 14-day relative strength index above 70 — a sign some say the market is overbought on Wall Street.
Federal Reserve Bank of New York President John Williams said late Thursday that U.S. monetary policy is “in a good place,” but officials will need to analyze data to decide how to proceed on interest rates. Dallas counterpart Lori Logan suggested that an interest rate hike may be appropriate at the central bank’s policy meeting, and that inflation may need to rise further to bring inflation back to 2 percent.
U.S. stock futures were little changed after stocks saw little movement at the end of the week, with the S&P 500 rising after a three-day slide. Nvidia Corp. and Tesla Inc. weighed in on the megacap space, while Apple Inc. lost $190 billion just days before the release of the iPhone 15, new smartwatches and new AirPods.
Concerns about a longer period of rising interest rates will reduce the chances of a soft landing for the U.S. economy and could lead to a selloff in stock prices over the next two months, Bank of America strategists led by Michael Hartnett said.
Consensus on a firm landing is “around 20%”, but oil, dollar and bond yields remain higher, as well as tighter financial conditions, he said, adding that “September-October risk remains”.
Key events this week
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UK Jobless Claims, Unemployment, Tuesday
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Eurozone industrial production, Wednesday
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UK industrial production, Wednesday
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US CPI, Wed
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Eurozone ECB rate decision, Thursday
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Japan’s industrial production, Thursday
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US Retail Sales, PPI, Business Inventories, Initial Jobless Claims, Thursday
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China property prices, retail sales, industrial production, Friday
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US Industrial Production, University of Michigan Consumer Sentiment, Empire Manufacturing Index, Friday
Some major activities in the markets are-
Shares
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The S&P 500 was little changed as of 7:25 a.m. Tokyo time. The S&P 500 rose 0.2%.
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Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 0.1%
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Nikkei 225 futures rose 0.3%
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Australia’s S&P/ASX 200 index rose 0.1 percent.
Currencies
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The euro was little changed at $1.0710.
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The Japanese yen rose 0.4% to 147.22 per dollar.
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The offshore yuan was little changed at 7.3614 to the dollar.
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The Australian dollar rose 0.2 percent to $0.6391.
Crypto currencies
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Bitcoin rose 0.4% to $25,920.92.
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Ether rose 0.3% to $1,623.3
Bonds
Goods
This story was produced with the help of Bloomberg Automation.
–Courtesy of Rita Nazareth.
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