Stocks in Asia fell and European futures pointed to a muted open, with investors seeking firm evidence of an earnings recovery before taking this month’s rally further. The dollar gained.
MSCI’s Asia equity benchmark fell for the first time in a week. Japan led the decline as Nintendo tumbled on a weak outlook. Shares in Hong Kong and mainland China retreated as investors looked ahead to a slew of major tech earnings due next week.
The dollar advanced for a third session as Treasury yields inched higher. Federal Reserve Bank of Minneapolis President Neel Kashkari said it’s likely the central bank will keep rates where they are “for an extended time.”
“We’re seeing some consolidation in Asia equities today after a lacklustre Wall Street session,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets in Singapore. “The US dollar is gaining ground, and the impact of Tokyo’s suspected interventions last week is fast dissipating as the yen’s large yield disadvantage comes back to the fore.”
Contracts for Euro Stoxx 50 and US stocks drifted lower in Asia trading after the S&P 500 eked out a fourth session of advance. Stocks across the world have been trying to make a comeback after April’s rout, with gains fueled by prospects of Fed rate cuts and solid earnings.
The yen extended losses despite warnings from top officials. Bank of Japan Governor Kazuo Ueda fired a clear warning shot to financial markets about a potential policy move as he beefed up his language on the weak yen. Finance Minister Shunichi Suzuki said the government stands ready to take all possible measures as needed.
In Asia, the focus was on President Xi Jinping’s trip to Europe and how trade relations will develop from here. In another sign of geopolitical tensions between China and the West, the US has revoked licenses allowing Huawei Technologies Co. to buy semiconductors from Qualcomm Inc. and Intel Corp., according to people familiar with the matter.
“There was limited data on corporate earnings to worry the markets, with no surprises and a lack of major US economic data in the days ahead,” said Kyle Rodda, a senior market analyst at Capital.com. “Debate continues within markets and among policymakers about the appropriate level for interest rates.”
In the corporate world, KKR & Co. will buy the wealth management and corporate trust units of Australian fund manager Perpetual Ltd. for A$2.175 billion ($1.43 billion), ending a months-long sale process. Toyota Motor Corp. (NYSE: TTE) flagged a weak profit outlook after safety scandals forced the Japanese automaker to trim production.
Elsewhere, oil fell to the lowest level since mid-March, with a mildly bearish US stockpile report and tensions in the Middle East in focus.
Source: https://finance.yahoo.com/news/asia-stocks-set-mixed-open-223123513.html
