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Asia: Stocks steady after BOJ; yen keeps losses

Thursday, April 27, 2017 - 12:20

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[SYDNEY] Stock in Asia were little changed after a five-day rally as the Bank of Japan left its policy unchanged and investors assessed a plan to overhaul US taxes.

Japan equity futures and the yen stayed lower, as the Topix headed for its first decline in six days. Shanghai stocks resumed a slide as regulatory concerns grew. Market reaction in the US to Mr Trump's tax proposal suggested much of the benefits were already reflected in asset prices.

The US dollar dropped while the Mexican peso jumped with the Canadian dollar, reversing earlier declines, as the US dispelled speculation over the fate of Nafta.

The BOJ kept the settings on its monetary easing programme unchanged after its two-day policy meeting ended. BOJ governor Haruhiko Kuroda told Bloomberg in an interview last week that the Japanese economy is stronger than expected just a few months ago. Yet inflation hasn't improved much, he acknowledged.

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Market voices on:

Global shares are trading at a record high on optimism for improving global economic growth. The much anticipated plan for US tax changes, including cuts that would benefit businesses, the middle class and certain high-earning individuals, left unanswered questions about whether it would be paid for, or how.

Investors are turning to earnings for more clues on the global economy, with Thursday offering results from some of the biggest companies. The heavyweights include PetroChina Co and Deutsche Bank AG, with Alphabet Inc and Dow Chemical Co on the menu for the US.

Concerns over China's markets are resurfacing after a brief pause, as the government intensified its focus on tackling risks in the financial system. Stocks in China have lagged all but three national benchmarks in the world this month, struggling to keep up with increasing global risk appetite amid an accelerating campaign against leverage.

Here are some key upcoming events investors are watching:

ECB officials have indicated little chance of a policy change. The focus will be on any signals from President Mario Draghi that the central bank is debating an exit from its extraordinary stimulus.

US GDP is due Friday. It's projected to show the economy expanded at a one per cent annualised rate in the first quarter, the weakest pace in a year.

Here are the main moves in markets:

Stocks

The MSCI Asia Pacific Index slipped less than 0.1 per cent from the highest level since June 2015 as of 12:19pm in Tokyo. Futures of the Nikkei 225 traded in Singapore were down less than 0.1 per cent. The Topix ended the morning session down 0.1 per cent, after jumping 4.5 per cent over the previous five days. The winning streak is the longest of this year.

The Shanghai Composite index tumbled 0.4 per cent and the Hang Seng Index slid 0.1 per cent.

South Korea's Kospi slipped 0.3 per cent. The country's economic growth accelerated in the first quarter as a recovery in exports supported investment. Samsung Electronics Co jumped 1.4 per cent as profit topped analysts' expectations.

Futures on the S&P 500 Index rose 0.1 per cent. The underlying gauge fell 0.1 per cent Wednesday. The Stoxx Europe 600 Index added 0.5 per cent, for a sixth straight advance that's taken it to the highest level since August 2015.

Currencies

The yen slid 0.2 per cent to 111.24 per US dollar, bringing its weekly loss to 1.9 per cent. The Bloomberg Dollar Spot Index dropped 0.2 per cent after increasing 0.3 per cent on Wednesday.

The South Korean won dropped 0.3 per cent while the New Zealand dollar advanced 0.3 per cent.

The Mexican peso jumped one per cent. The currency tumbled 1.7 per cent to the lowest in a month on Wednesday on speculation the Trump administration was close to scrapping Nafta. The Canadian dollar rose 0.6 per cent, after a four-day selloff.

The ruble edged up 0.2 per cent. The currency slid 1.8 per cent Wednesday after President Vladimir Putin said the government is looking for "market-based measures" to stabilize the currency.

Bonds

The yield on 10-year Treasuries rose one basis point to 2.32 per cent. The rate fell three basis points to 2.30 per cent on Wednesday, after climbing for five straight sessions.

Australian 10-year yields lost two basis points to 2.61 per cent.

Commodities

Gold resumed losses, with the spot price dropping 0.3 per cent to US$1,266.10 an ounce. The metal climbed 0.4 per cent Wednesday after a two-day decline.

Oil fell 0.4 per cent to US$49.42 a barrel. trading near the lowest level in a month.

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