Asian Stocks Mixed as Yen Retreats, Iron Ore Drops – 17 April, 2017
Asian equities were mixed, with Japanese shares gaining amid a weaker yen while Australian shares slumped as a selloff in iron ore pulled down commodity producers.
Stocks in Tokyo, Singapore and Taiwan rose, while markets in Sydney and Hong Kong dropped after a two-day holiday. The yen slipped after Treasury Secretary Steven Mnuchin told the Financial Times the dollar’s strength is “a good thing.” Gold held declines. Iron ore futures slid, extending losses after falling into a bear market earlier this month.
Investors turned less cautious in the absence of any major international incidents that damped the prospects for global growth. The U.S. has gotten encouraging signs that China will act to pressure Kim Jong Un’s regime to dismantle its nuclear weapons program, a State Department official said, but the Trump administration is holding on to military action — alone or with allies — as an option.
Readings on American housing and New York manufacturing lowered the odds for higher interest rates, while faster growth in China boosted optimism about the strength of the global economy. Exchanges open after the Easter break in Australia, New Zealand and Hong Kong.
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Here’s what investors are watching this week:
- Malaysia, New Zealand and Hong Kong are all due to report CPI figures this week, while Japan will release trade data and Australia gets updates on business and consumer confidence.
- The annual spring meetings of the World Bank Group and the International Monetary Fund take place in Washington.
- Companies reporting this week include Bank of America Corp., Goldman Sachs Group Inc., International Business Machines Corp., Heineken NV and Unilever.
Here are the main moves in markets:
Stocks
- Japan’s Topix advanced 0.4 percent as of 11:30 a.m in Tokyo, trimming an earlier gain of as much as 1 percent. Singapore’s Straits Times Index and Taiwan’s Taiex rose at least 0.3 percent. Indonesia’s benchmark jumped 0.8 percent.
- South Korea’s Kospi dropped 0.2 percent. Australia’s S&P/ASX 200 fell 1.1 percent, the most in almost a month, while New Zealand’s benchmark was flat.
- Futures on the S&P 500 slipped less than 0.1 percent. The index rose 0.9 percent on Monday, rebounding from a 1.1 percent loss last week. Trading in S&P 500 shares was 16 percent below the 30-day average.
Currencies
- The yen declined 0.1 percent to 109 per dollar. The Australian dollar fell 0.3 percent.
- The Bloomberg Dollar Spot Index added less than 0.1 percent after falling 0.2 percent Monday to the lowest closing level since March 27.
Bonds
- The yield on 10-year Treasuries fell less than one basis point to 2.25 percent, after rising one basis point from the lowest in about five months on Monday.
- Australian benchmark yields rose three basis points to 2.50 percent. In minutes of this month’s policy meeting released Tuesday, the Reserve Bank of Australia noted labor market conditions were “somewhat weaker than had been expected” and measures of underemployment “remained high.”
Commodities
- Gold was little changed at $1,284.78 an ounce after declining for two days.
- West Texas Intermediate fell 0.1 percent to $52.60 a barrel, after dropping 1 percent on Monday.
- Iron ore futures on the Dalian exchange dropped 1.3 percent, after sliding almost 3 percent on Monday. The raw material for steel-making entered a bear market this month as a procession of analysts, Australia’s government and even some miners said gains to 2014 highs were unsustainable amid rising supply.
Source: Bloomberg