MSCI’s broadest index of Asia-Pacific shares outside Japan tacked on 0.56%, helped by Wall Street’s positive lead on Friday owing to a rally in megacap growth stocks
Asian stocks got off to a positive start on Monday ahead of the Fed’s policy meeting later in the week, while the dollar broke past the key level of 160 yen for the first time in decades.
Oil prices dropped on expectations that higher-for-longer US interest rates would dampen demand, while news of a potential Middle East ceasefire eased concerns of supply constraints.
The dollar hit a high of 160.245 yen – its strongest in 34 years – in a sudden but brief jump during Asia hours. It was 0.5% higher at 159.14 yen.
Despite the yen’s continuous decline towards new multi-decade lows, Tokyo has so far resisted intervening in the currency market, even as officials ramp up their warnings against excessive yen moves.
Markets are testing the upside, said Christopher Wong, a currency strategist at OCBC, of the dollar/yen currency pair.
The Bank of Japan had on Friday kept interest rates around zero at the conclusion of its monetary policy meeting and ruled out shifting to a full-fledged reduction in the BOJ’s bond purchases, striking a more dovish tone than some had expected.
That, and bets the Federal Reserve is likely to delay the beginning of its rate-cutting cycle, provided fresh impetus to yen bears.
In the wider market, MSCI’s broadest index of Asia-Pacific shares outside Japan tacked on 0.56%, helped by Wall Street’s positive lead on Friday owing to a rally in megacap growth stocks.
The upbeat sentiment spilled over into the new week, with Nasdaq futures and S&P 500 futures each gaining 0.2%.
Hong Kong’s Hang Seng Index similarly gained 0.77%, while China’s blue-chip index rose 0.06%.
