Asia’s major stock indexes saw a mixed day on Thursday, approaching the end of what has been a volatile week for the region’s equities sparked by the Bank of Japan’s historic interest rate rise and fears of a US recession.
Shares bounced between gains and losses, while the yen and US bonds attempted to rebound, as global investors struggled to find their footing.
Japanese shares were under fresh pressure as domestic chip stocks followed a slide on Wall Street overnight and as more details from the Bank of Japan (BOJ) pointed to hawkishness and further monetary tightening.
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The Nikkei index was volatile, as investors struggled for direction following its 12% plunge on Monday and subsequent recovery.
The average was down 0.74%, or 258.47 points, to close at 34,831.15, while the broader Topix was down 1.11%, or 27.51 points, to 2,461.70.
Earlier in the day, details from the Bank of Japan pointed to hawkishness and further monetary tightening as the central bank released minutes of its July meeting.
Some BOJ board members called for the need to keep raising interest rates, with one saying they should eventually be increased to at least around 1%, a summary of opinions voiced at the July 30-31 meeting showed on Thursday.
China’s stock market showed a little more resilience, outperforming neighbours as investors eyed Chinese assets as relatively safer investments despite ongoing economic uncertainty.
Tech shares drove the modest gains, and the Shanghai Composite Index gained just 0.01%, or 0.07 points, to 2,869.90, while the Shenzhen Composite Index on China’s second exchange dipped 0.12%, or 1.84 points, to 1,564.26.
The Hang Seng Index edged up 0.08%, or 13.97 points, to 16,891.83.
Elsewhere across the region, in earlier trade, Singapore, Manila and Bangkok rose while Sydney, Seoul, Mumbai, Wellington, Taipei and Jakarta were in the red. MSCI’s broadest index of Asia-Pacific shares was ahead 0.3%.
Nasdaq futures were volatile, last trading flat after swinging between gains and losses. Pan-European STOXX 50 futures sagged 1.1%.
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The dollar-yen pair which tends to be sensitive to moves in long-term US Treasury yields, retraced about half of its overnight jump to 3.977% and last stood at 3.91% in Asian hours.
The dollar index, which measures the currency against the yen, franc, euro and three other major peers, was down 0.08% at 103.03, while the euro gained by the same margin to $1.0931.
Currencies, and the yen in particular, have been upended by a shift last week toward bets for steady interest rate increases by the Bank of Japan and aggressive cuts by the US Federal Reserve, which helped send the dollar as low as 141.675 yen on Monday for the first time since the start of this year.
The move snowballed as some investors unwound yen carry trades, with a ripple effect on Japanese stocks. While much of that has run its course, traders are still struggling to find an equilibrium level.
Meanwhile, weekly US jobless claims data due later in the day could prove market moving following soft monthly payrolls figures on Friday that exacerbated fears of a US economic downturn.
Traders are currently pricing in 111 basis points of cuts to the Fed funds rate over the remaining three meetings this year, which many analysts see as overdone.
Elsewhere, leading cryptocurrency bitcoin gained more than 3% to $56,877.
Crude oil continued to rise following data the previous day that showed a bigger-than-expected draw in US crude stockpiles.
Brent crude futures added 0.1% to $78.42 a barrel, following Wednesday’s 2.4% jump. US West Texas Intermediate crude gained 0.3% to $75.45, building on a 2.8% rally from overnight.
Key figures
Tokyo – Nikkei 225 < DOWN 0.74% at 34,831.15 (close)
Hong Kong – Hang Seng Index > UP 0.08% at 16,891.83 (close)
Shanghai – Composite > UP 0.01% at 2,869.90 (close)
London – FTSE 100 < DOWN 1.06% at 8,079.92 (0918 BST)
New York – Dow < DOWN 0.60% at 38,763.45 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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