Asian stocks saw a mixed but low-key end to the week with investor caution ahead of the US Fed chief’s keynote speech later in the day.
Jerome Powell is scheduled to speak at a central bank event in Jackson Hole, Wyoming, where global investors will tune in to gauge the extent and timing of US rate cuts.
Japan’s Nikkei share average ended with gains following a rollercoaster session as traders reacted to shifts in tone over five hours of parliamentary testimony from Bank of Japan Governor Kazuo Ueda.
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The Nikkei finished up 0.40% at 38,364.27 after starting the day higher and then slumping into the lunch break, only to rally on the restart. The broader Topix gained 0.50%.
The yen also swung on Ueda’s comments, last trading about 0.5% stronger at 145.65 per dollar, clawing back most of Thursday’s declines.
Technology was the only Nikkei sector to decline, as chip shares tracked an overnight sell-off of Wall Street peers. Chip-making machinery giant Tokyo Electron lost 2.52% to be the biggest decliner in index-point terms.
Mainland China stocks gained after three straight sessions of losses, while Hong Kong shares fell along with regional peers amid caution ahead of Federal Chair Powell’s speech.
China’s blue-chip CSI300 index was up 0.42% with, earlier in the session, its financial sector sub-index higher by 1.39%, the consumer staples sector up 0.09%, the real estate index up 0.55% and the healthcare sub-index down 0.23%.
The Shanghai Composite Index edged up 0.20%, or 5.60 points, to 2,854.37, while the Shenzhen Composite Index on China’s second exchange gained 0.08%, or 1.14 points, to 1,506.22.
Chinese H-shares listed in Hong Kong – stocks belonging to companies from the Chinese mainland – fell 0.4% to 6,199.07, while the Hang Seng Index dipped 0.16%, or 28.90 points, to 17,612.10.
Elsewhere across the region, in earlier trade, there were also losses in Sydney, Singapore, Taipei and Seoul, while Mumbai, Wellington and Jakarta edged up.
Treasury Yields Slip
Guided by higher Wall Street futures, MSCI’s broadest index of Asia-Pacific shares outside Japan trimmed earlier losses to be just down 0.1%. It was headed for a weekly gain of 1%.
Europe was set for a subdued open with Eurostoxx 50 futures flat and FTSE futures up 0.4%. S&P futures and Nasdaq futures rose 0.3% and 0.6% respectively.
Overnight, Wall Street fell as sentiment turned cautious ahead of the Fed Chair’s speech. Three Fed speakers on Thursday alluded to a rate cut in September, with them voicing support for a “slow and methodical” approach.
Taken together with surveys showing the US economy still growing at a healthy pace, markets slightly pared back the chance of an outsized half-point cut in September to 24%, from 38% a day earlier. A quarter-point reduction is fully priced in.
Treasury yields slipped a little, having gained overnight for the first time in five sessions. Ten-year yields fell 2 basis points to 3.8445% in Asia while two-year yields also dropped 2 bps to 3.9934%.
Declining yields pressured the dollar to one-year lows, although it did get some respite from selling pressure overnight. The euro came off its one-year high to $1.1126, with major resistance seen at $1.1139.
Brent crude futures were almost flat at $77.28 a barrel, although they are down more than 3% for the week as swelling US crude stocks and a weakening demand outlook in China have raised pessimism.
Gold prices are up 0.4% to $2,494.84 an ounce, recharging towards its record high of $2,531.6 hit just on Tuesday.
Key figures
Tokyo – Nikkei 225 > UP 0.40% at 38,364.27 (close)
Hong Kong – Hang Seng Index < DOWN 0.16% at 17,612.10 (close)
Shanghai – Composite > UP 0.20% at 2,854.37 (close)
London – FTSE 100 > UP 0.21% at 8,305.24 (0934 BST)
New York – Dow < DOWN 0.43% at 40,712.78 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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