Asian markets extended their gains on Tuesday after gains on Wall Street, while the yen held on to gains after the previous day’s big swings, as focus shifted to the Federal Reserve’s future policy decisions.
A string of better-than-expected profits by top companies in recent weeks, particularly tech giants such as Alphabet and Microsoft, has been a key driver of the recent gains, offsetting waning hopes for a U.S. interest rate cut this year.
The Fed is widely expected to stick to borrowing costs after Wednesday’s meeting, but its statements and comments from Chairman Powell will be closely watched for clues about its plans for the rest of the year.
Going into 2024, traders are wondering how much cuts the central bank will make, as inflation remains above target and various indicators point to the still abysmal health of the economy and labor market. We are lowering our expectations.
Still, investors have largely accepted the fact that interest rates will remain high for an extended period of time and are bracing themselves for strong corporate reports.
At the end of this week, employment statistics are expected to be released, and Apple, Coca-Cola, and Pfizer are also scheduled to announce their quarterly results.
In early trading, Hong Kong rose for the seventh straight day, while Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei and Jakarta also rose.
There was also some support from news that factory activity in China was stronger than expected in April, even if at a slower pace than last month.
On Monday, a public holiday in Japan, Tokyo caught up with Asia’s gains, rising more than 1%.
The yen fell slightly to more than 156 yen to the dollar, but after hitting a 34-year low of 160.17 yen, it maintained most of its gains from the previous day, which observers attribute to authorities’ intervention.
Traders are wary of further volatility in currency pairs after the Bank of Japan decided last week not to further reverse its ultra-easy monetary policy, with little idea when it might do so.
That makes the Fed meeting even more important, with observers warning that a more hawkish tilt could send the dollar soaring again, but with major differences in the central banks’ monetary policies. , many people are warning that the yen is likely to reach 160 yen again.
Yusuke Miyairi of Nomura International said, “Unless the macroeconomic situation changes, a return to 160 is almost within sight.”
He added: “The market is not so afraid of fighting[with the Treasury]over the currency.”
US President Joe Biden reportedly called on Egypt and Qatar to “make every effort” to secure the release of hostages held by Hamas as part of negotiations, in hopes of achieving a ceasefire in the Gaza Strip. Oil prices have fallen.
Hamas is expected to accept an offer for a second ceasefire in the Gaza Strip, along with the release of new hostages.
– Main figures around 0300 GMT –
Tokyo – Nikkei Stock Average: up 1.4% to 38,459.01 (break)
Hong Kong Hang Seng Index: 17,831.73, up 0.5%
Shanghai – Overall: 3,116.28, up 0.1%
Dollar/JPY: down to 156.69 yen from Monday’s 156.09 yen
EUR/USD: down from $1.0725 to $1.0705
GBP/USD: down from $1.2564 to $1.2547
EUR/GBP: down from 85.34p to 85.32p
West Texas Intermediate: down 0.1% to $82.53 per barrel
Brent crude oil: down 0.1% to $88.34 per barrel
New York-Nasdaq Composite: up 0.4% to 15,983.08 (close)
London – FTSE 100: up less than 0.1% to 8,147.03 (close)
Dan/Kururu
