(Bloomberg) — Stocks in Asia slid following a sluggish US session, with investors seeking firm evidence of an earnings recovery before taking this month’s rally further. The dollar gained.
Most Read from Bloomberg
Japanese equities underperformed the region, as Nintendo tumbled on a weak outlook and investors expected Toyota Motor’s earnings due later today. Benchmarks in mainland China fell, taking a breather after a recent rally. Hong Kong shares climbed as investors looked ahead to a slew of major tech earnings due next week.
The dollar higher pushed for a third session, helped by a steadying in Treasury yields. The greenback was also supported by comments from Federal Reserve Bank of Minneapolis President Neel Kashkari, who said it’s likely the central bank will maintain rates where they are “for an extended period of time.” The yen extended losses despite warnings from the central bank governor.
“We’re seeing some consolidation in Asia equities today after a lackluster Wall Street session,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets in Singapore. “The US dollar is gaining ground, and the impact of Tokyo’s suspected interventions last week is fast dissipating as the yen’s large yield comes back to the fore.”
Bank of Japan Governor Kazuo Ueda fired a clear warning shot to financial markets about a potential policy move as he beefed up his language on the weak yen. Finance Minister Shunichi Suzuki said the government stands ready to take all possible measures as needed.
In Asia, the focus will be on President Xi Jinping’s trip to Europe and how trade relations will develop from here. In another sign of geopolitical tensions between China and the West, the US has revoked licenses allowing Huawei Technologies Co. to buy semiconductors from Qualcomm Inc. and Intel Corp., according to people familiar with the matter.
Contracts for US stocks were little changed in Asia trading after the S&P 500 eked out a fourth session of advance. Stocks across the world have been trying to make a comeback after April’s rout, with gains fueled by prospects of Fed rate cuts and solid earnings.
“There was limited data on corporate earnings to worry the markets, with no unexpected surprises and a lack of better US economic data in the days ahead,” said Kyle Rodda, a senior market analyst at Capital.com. “Debate continues within markets and among policymakers about the appropriate level for interest rates.”
Story continues
In the corporate world, KKR & Co. will buy the wealth management and corporate trust units of Australian fund manager Perpetual Ltd. for A$2.175 billion ($1.43 billion), ending a months-long sale process. In South Korea, shares of HD Hyundai Marine Solution Co. jumped as much as 45% in its trading debut after an initial public offering that was priced at the top of a range.
Elsewhere, oil fell to near the lowest level since mid-March, with a mildly bearish US stockpile report and tensions in the Middle East in focus.
Key events this week:
-
Toyota earnings, Wednesday
-
Germany industrial production, Wednesday
-
Fed Governor Lisa Cook speaks, Wednesday
-
Bank of Japan issues summary of opinions from April policy meeting, Thursday
-
China trade, Thursday
-
UK BOE rate decision, Thursday
-
US initial jobless claims, Thursday
-
UK industrial production, GDP, Friday
-
ECB publishes account of April policy meeting, Friday
-
BOE Chief Economist Huw Pill speaks, Friday
-
US University of Michigan consumer sentiment, Friday
-
Chicago Fed President Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
-
S&P 500 futures were little changed as of 11:35 am Tokyo time
-
Nikkei 225 futures (OSE) fell 1.6%
-
Japan’s Topix fell 1.2%
-
Australia’s S&P/ASX 200 was little changed
-
Hong Kong’s Hang Seng rose 0.5%
-
The Shanghai Composite fell 0.3%
-
Euro Stoxx 50 futures fell 0.1%
-
Nasdaq 100 futures were little changed
Currencies
-
The Bloomberg Dollar Spot Index rose 0.2%
-
The euro fell 0.1% to $1.0739
-
The Japanese yen fell 0.3% to 155.21 per dollar
-
The offshore yuan was little changed at 7.2294 per dollar
-
The Australian dollar fell 0.4% to $0.6572
Cryptocurrencies
-
Bitcoin fell 0.4% to $62,734.12
-
Ether fell 0.6% to $3,030.56
Bonds
-
The yield on 10-year Treasuries advanced one basis point to 4.47%
-
Japan’s 10-year yield declined 1.5 basis points to 0.855%
-
Australia’s 10-year yield declined three basis points to 4.27%
Commodities
-
West Texas Intermediate crude fell 0.3% to $78.11 a barrel
-
Spot gold fell 0.1% to $2,311.26 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck.
Most Read from Bloomberg Businessweek
©2024 Bloomberg LP
