Asia Stocks Mixed as Weaker Yen Lifts Japan Shares

EghtesadOnline: Asian stocks were mixed, with shares in Japan advancing as the yen extended the biggest drop since January. Treasuries fell and gold retreated a third day as traders digested the more hawkish tone struck by the Federal Reserve.

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16 June 2017

The MSCI Asia Pacific Index was little changed after the worst drop in almost three months on Thursday. The yen remained lower after the Bank of Japan left monetary policy unchanged. Crude edged higher, climbing from a seven-month low. The greenback strengthened and 10-year Treasury yields climbed Thursday as U.S. economic data gave traction to the Fed’s suggestion that the strength of the labor market will prevail over weakness in inflation, Bloomberg reported.

With Japanese inflation still distant from its target, the BOJ maintained its promise to keep pouring stimulus into the economy. The policy statement came on the heels of the Fed’s third interest rate increase since December, underscoring how the BOJ continues to fall behind its global peers in normalizing policy. The focus now turns to Governor Haruhiko Kuroda’s press conference, where investors will look for any clues he gives about an eventual exit from stimulus.

Investors continue to gauge risks from the recent selloff in technology shares. Traders on Thursday resumed selling the U.S. giants that have contributed most to equity records this year, as the threat of higher interest rates prompted a shift from growth into value shares.

Here’s what investors will be facing in the next few days:

Housing starts and Michigan consumer sentiment reports are scheduled to come out in the U.S. on Friday.

France completes the election of its new National Assembly with a second round of voting on Sunday that’s expected to hand President Emmanuel Macron an overwhelming legislative majority.

MSCI Inc. announces on Tuesday the results of its 2017 Annual Market Classification Review, including whether the MSCI Argentina and MSCI China A indexes will be added to the emerging-markets gauge.

Here are the major movers:

Stocks

The MSCI Asia Pacific Index fell 0.1 percent at 2:39 p.m. in Tokyo, with an almost equal number of shares rising and declining. The regional index lost 1.3 percent on Thursday, the most since March 22.

Japan’s Topix climbed 0.3 percent, erasing its loss for the week. SoftBank Group Corp. jumped 3.1 percent after sliding 6.5 percent over four days.

Australia’s S&P/ASX 200 Index advanced 0.1 percent and South Korea’s Kospi retreated 0.1 percent.

Hong Kong’s Hang Seng increased 0.3 percent and Singapore’s Straits Times Index added 0.1 percent. The Shanghai Composite Index lost 0.2 percent.

Futures on the S&P 500 rose 0.1 percent after the index fell 0.2 percent on Thursday. Tech shares in the measure lost 0.5 percent, while bond proxies from real estate to utilities led gains. The Stoxx Europe 600 Index slid 0.4 percent, bringing its weekly decline to 1.1 percent.

Currencies

The yen fell 0.2 percent to 111.12 per dollar, after dropping 1.2 percent in the previous session, the most since January.

The Bloomberg Dollar Spot Index strengthened 0.1 percent, after rising 0.5 percent on Thursday to snap three days of losses.

The South Korean won dropped 1.2 percent, the most since March 3.

Bonds

The yield on 10-year Treasury notes rose one basis point to 2.17 percent after rising four basis points in the previous session. The rate dropped on Wednesday to 2.13 percent, the lowest level since November.

Japanese 10-year yields rose less than one basis point, while those in Australia climbed five basis points.

Commodities

West Texas crude futures was little changed at $44.48 a barrel. Oil is down about 3 percent for the week, trading near the lowest level since November.

Gold dropped 0.1 percent to $1,252.27, bringing its loss for the week to 1.1 percent.