Most key Asian equity benchmarks fell in choppy trading Wednesday while the yen slumped, Japanese stocks rallied and the nation’s government bond yields whipsawed after the central bank kept its key settings unchanged.
(Bloomberg) — Most key Asian equity benchmarks fell in choppy trading Wednesday while the yen slumped, Japanese stocks rallied and the nation’s government bond yields whipsawed after the central bank kept its key settings unchanged.
Contracts for the S&P 500 reversed declines and Treasury yields slid after the Bank of Japan policy meeting.
The yen depreciated as much 2.4%, the most since since June last year, while a gauge of dollar strength climbed about 0.4%. While economists had expected Governor Haruhiko Kuroda to stand pat for now, traders have been testing policy makers.
The benchmark 10-year Japanese government bond yield breached the central bank’s target ceiling of 0.5% for a fourth day, before plummeting more than 10 basis points.
Overnight in the US, Goldman Sachs Group Inc. shares fell after the lender reported a drop in investment-banking fees in the fourth quarter. Morgan Stanley, which also reported Tuesday, was buoyed by revenues from its asset and wealth management divisions, pushing its stock higher.
New York manufacturing data for January showed a decline to the lowest level since the early months of the pandemic, underscoring the pain facing producers as Federal Reserve rate hikes weigh on the economy.
Fed officials Raphael Bostic, Lorie Logan and Patrick Harker will speak Wednesday, providing potential clues on the outlook for rates.
Elsewhere, oil contracts traded higher as traders looked to a revival in Chinese demand this year after data showed the economy fared better than expected last quarter.
Key events this week:
- Euro-zone CPI, Wednesday
- US retail sales, PPI, industrial production, business inventories, MBA mortgage applications, cross-border investment, Wednesday
- Federal Reserve releases Beige Book, Wednesday
- Fed speakers include Raphael Bostic, Lorie Logan and Patrick Harker, Wednesday
- US housing starts, initial jobless claims, Philadelphia Fed index, Thursday
- ECB account of its December policy meeting and President Christine Lagarde on a panel in Davos, Thursday
- Fed speakers include Susan Collins and John Williams, Thursday
- Japan CPI, Friday
- China loan prime rates, Friday
- US existing home sales, Friday
- IMF’s Kristalina Georgieva and ECB’s Lagarde speak in Davos, Friday
–With assistance from Stephen Kirkland.
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