Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Asian markets respond to potential Federal Reserve decision and Japan's currency intervention

EditorHari Govind
Published 01/11/2023, 10:46
Updated 01/11/2023, 10:46
© Reuters.

Asian stocks and the Japanese yen saw a boost today, as traders anticipate the Federal Reserve's policy decision and respond to potential intervention by Japan's currency chief, Masato Kanda. The MSCI's Asia Pacific Index rose 1%, driven primarily by Japanese stocks and the Topix benchmark. Despite fluctuations in shares in Hong Kong and China due to China's manufacturing contraction, the overall Asian market remained strong.

The Japanese yen also experienced a significant drop, prompting intervention from Japanese authorities including Kanda. This intervention, along with the Bank of Japan's unscheduled bond-purchase operations aimed at limiting yield gains, helped ease losses in Japanese bond futures.

In corporate news, Toyota Motor (NYSE:TM) raised its full-year profit forecast and announced a share buyback. Rie Nishihara of JPMorgan Securities viewed these moves positively for Japan's financial stocks.

Meanwhile, S&P 500 futures marginally dropped after October's rebound, while Treasury 10-year yields decreased slightly following a rise. Traders, including bond dealers, anticipate another rate hold from the Fed, as suggested by FOMC. They are also focusing on the US government's new borrowing plan. Yves Bonzon of Julius Baer indicated that the Fed is nearing the end of its tightening cycle but has not yet provided nuanced guidance.

Internationally, global attention has shifted to oil demand due to the ongoing Israel-Hamas conflict. Additionally, US consumer confidence dropped to a five-month low in October, employment costs accelerated unexpectedly in Q3, and disappointing earnings from Alphabet (NASDAQ:GOOGL) Inc. and Meta Platforms Inc (NASDAQ:META). weighed on US stocks. Gold was set for its third straight lower close.

On the other hand, concerns over China's economic recovery led to a 0.4% fall in India's Nifty 50 and Sensex indices. Metal stocks dropped nearly 1%, with Jindal Steel & Power facing a significant 7% loss. Analysts flagged issues such as flat volume growth, capex timeline extensions, and a 10% Q2 revenue drop. VK Vijayakumar from Geojit Financial Services highlighted the impact of a spike in U.S. bond yields and the Fed's higher-for-longer rate stance on global stocks, warning that persistent foreign investment sell-offs could further affect domestic equities.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.