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Asia: Stocks mixed before Fed; yen erases losses
[SYDNEY] Asian equities were mixed with trading muted ahead of the US Federal Reserve's policy decision and as investors sifted through earnings from companies including Alphabet Inc. Oil rose while the yen erased earlier declines.
Stocks in Australia advanced while Japanese shares retreated after an uninspiring American session that saw the US dollar stabilise while equities made little headway.
Technology and industrial shares had the biggest declines on the MSCI Asia Pacific Index. Oil extended gains above US$46 a barrel after Saudi Arabia promised deep cuts to crude exports next month to help ease a global glut.
Earnings season is ramping up ahead of the eagerly anticipated Fed policy decision on Wednesday. Data in Europe casts doubt over the strength of the recovery and bond investors have cast their votes on a weak inflation outlook in the US.
Political turmoil in Washington remains front and centre after senior adviser Jared Kushner confirmed four contacts with Russians during his father-in-law's presidential campaign and the transition. Donald Trump's son and former Trump campaign chairman Paul Manafort will go before Senate committees on Wednesday.
Here are some key events coming up this week: The UK holds post-Brexit trade talks with the US in Washington.
China posts industrial profits for last month, with early indicators pointing upward.
Japanese June data also due this week may show sluggish CPI, even amid a tightening labor market and increased household spending.
The Fed is expected to make no change to policy on Wednesday with investors and economists parsing the statement for clues on how officials plan to proceed in reducing their massive portfolio.
The US economy probably gained traction in the second quarter as spending by American consumers picked up after a lull early this year. The gross domestic product report follows the two-day Fed policy meeting.
Results from Facebook Inc, Deutsche Bank AG, Nomura Holdings Inc, BNP Paribas SA and UBS Group AG are among those expected this week.
The yen was little changed at 111.10 per US dollar as of 11:36am in Tokyo, after dropping as much as 0.2 per cent earlier in the day. The currency had rallied for five straight days. The Bloomberg Dollar Spot Index was flat after closing little changed on Monday.
The Australia dollar was little changed, after erasing an earlier decline. Attention turns to two key events on Wednesday: June quarterly inflation data and a speech on the labour market and monetary policy from Reserve Bank of Australia Governor Philip Lowe.
The euro rose 0.1 per cent to US$1.1654, after dropping 0.2 per cent on Monday.
The New Zealand dollar fell 0.1 per cent after reports of a contagious disease found in cattle.
Japan's Topix index lost 0.3 per cent. Australia's S&P/ASX 200 Index added 0.8 per cent with volume down about 23 per cent from a 30-day average. South Korea's Kospi index fell 0.2 per cent. The Hang Seng Index was little changed with the Shanghai Composite Index.
Futures on the S&P 500 Index were flat after the underlying gauge slipped 0.1 per cent.
Declines at Alphabet Inc in after-hours trading weighed on Nasdaq 100 Index futures as sales at Google's parent fell short of the most-optimistic estimates.
Commodities WTI crude gained 0.6 per cent to US$46.62. It rose 1.3 per cent Monday after Saudi Arabia said it would cap shipments at 6.6 million barrels a day in August, 1 million lower than a year earlier.
Gold was steady at US$1,255.35.
The yield on US 10-year Treasuries dropped one basis point to 2.25 per cent.
Australian benchmark yields rose one basis point to 2.69 per cent.