Japanese stocks lead Asia decline as yuan rises: Market Wrap

(Bloomberg) — Asian stocks fell as Japanese stocks underperformed following currency warnings from government officials. The yuan rose on the back of supportive signs.

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Regional stock indexes fell for the second session, with Japan’s Topix index the worst performer. This came after the country’s top monetary authority warned against speculative activity in the foreign exchange market. South Korea’s Kospi index also fell, but Australian stocks rose little by little. European and US stock futures were little changed.

The offshore yuan rose after the dollar weakened and the People’s Bank of China set a stronger-than-expected daily benchmark interest rate. The difference between the yuan’s daily fixed value and expected value was the largest since November, Bloomberg calculated, after the People’s Bank of China injected a net 40 billion yuan ($5.56 billion) into open market operations. It has been shown.

Chinese Premier Li Qiang earlier downplayed investors’ concerns about the challenges facing the economy, saying his government was stepping up policy support to boost growth and addressing systemic risks. Ta.

“Just saying the risk is not as high as people think is not going to pull investors back,” said Beisaan Lin, managing director at Union Bancare Prive. “China is not just a ‘show me’ story for investors, it’s a ‘show me more than I expect’ story.”

Chinese and Hong Kong stocks fell slightly.

U.S. Treasuries were mostly steady after Friday’s rally saw the 10-year Treasury yield drop by as much as 7 basis points. Australian and New Zealand government bond yields fell on Monday.

The move comes ahead of a busy week of economic data expected to be released, including the Federal Reserve’s preferred inflation measure, which will be released on Friday. The core personal consumption expenditure index, which excludes food and utilities, is expected to rise 0.3%, the biggest monthly increase in a year.

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Australia, France, Italy and Spain are also scheduled to release their inflation figures later this week, providing a clear picture of rising prices as investors brace for interest rate cuts.

The dollar’s recent rise reflects a shift in investors’ thinking about the world’s reserve currency. At the beginning of the year, many expected the dollar to weaken against other countries as the Fed moved closer to cutting interest rates. Now, expectations that central banks in other advanced economies will also cut interest rates have reignited the currency’s appeal.

“Tightening typically triggers a financial crisis and, when it turns into a credit crunch, a recession,” Ed Yardeni, president of the research firm of the same name, said in a note Monday. “This chain of events is now unlikely,” he said, citing the Fed’s emergency liquidity measures to deal with crises such as the stress on the U.S. banking system last March.

Expected Fed rate cuts have sparked renewed interest in so-called bond steepener trades, where investors buy up short-term U.S. Treasuries that offer attractive near-term price increases as interest rates fall.

In commodity markets, oil rose on heightened geopolitical instability following the attack in Russia and positive comments on the outlook for commodities. Gold was little changed, but iron ore maintained its biggest weekly gain in six months.

This week’s main events:

• Bank of England policymaker Katherine Mann speaks on Monday

• U.S. new home sales, Monday

• Fed’s Austan Goolsby, Lisa Cook and Rafael Bostic speak on Monday

• ECB Chief Economist Philip Lane appears on Tuesday

• US Durable Goods, Conference Board Consumer Confidence, Tuesday

• Australian CPI, Wednesday

• Bank of Japan Director Noriaki Tamura speaks on Wednesday

• China’s industrial profits Wednesday

• Bank of Communications, Agricultural Bank of China, China Merchants Bank, Wednesday’s financial results report

• Eurozone economy, consumer confidence, Wednesday

• Bank of England releases minutes of Monetary Policy Committee meeting on Wednesday

• Fed’s Christopher Waller speaks on Wednesday

• German unemployment rate Thursday

• UK GDP revised figures Thursday

• University of Michigan Consumer Sentiment, Number of New Unemployment Insurance Claims, GDP, Thursday

• Japan’s unemployment rate, Tokyo CPI, Friday

• French consumer price index, Friday

• US Personal Income and Expenditures, Wholesale Inventories, Friday

• Exchanges were closed in the US and many other countries on Friday due to the Good Friday holiday

• Fed’s Jerome Powell and Mary Daly speak on Friday

The main movements in the market are:

stock

• S&P 500 futures were down 0.2% as of 3:53 p.m. Tokyo time.

• S&P/ASX 200 futures down 0.2%

• Hong Kong’s Hang Seng fell 0.2%.

• The Shanghai Composite fell 0.7%.

• Euro Stoxx50 futures little changed

currency

• The Bloomberg Dollar Spot Index fell 0.1%.

• The euro was almost unchanged at $1.0817.

• The Japanese yen was almost unchanged at 151.29 to the dollar.

• The offshore yuan rose 0.4% to 7.2497 yuan to the dollar.

• The Australian dollar rose 0.1% to $0.6522.

• The British pound was almost unchanged at $1.2607.

cryptocurrency

• Bitcoin rose 1.5% to $67,158.48.

• Ether rose 1.5% to $3,466.18

bond

• The 10-year Treasury yield rose 1 basis point to 4.21%.

• Japan’s 10-year bond yield fell 1.5 basis points to 0.725%.

• Australian 10-year bond yield falls 3 basis points to 4.01%

merchandise

This article was produced in partnership with Bloomberg Automation.

–With assistance from Zhu Lin.

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