Asian Currency

Asian shares subdued as China trade eyed, yen steadies after recent falls


SYDNEY, May 9 (Reuters) – Asian shares were subdued on
Thursday as investors awaited China trade data to gauge the
health of the Chinese economy, while the yen steadied after
three days of declines as Japan talked up a potential currency
intervention.

Later in the day, the Bank of England (BoE) will decide its
interest rate policy, with all eyes on the prospects of a June
rate cut following the overnight move by Sweden’s Riksbank to
cut rates, which underlined Europe’s divergence from the U.S.
Federal Reserve.

MSCI’s broadest index of Asia-Pacific shares outside Japan
rose 0.1%, hovering not far from a 15-month high
hit earlier in the week after Fed Chair Jerome Powell reiterated
a stance for policy easing later this year.

Investors will be focusing on the U.S. consumer inflation
data for April due next Wednesday after three straight prints of
upside surprises for a better sense of the direction of the
Fed’s policy.

Chinese bluechips rose 0.6% and Hong Kong’s Hang
Seng index gained 0.7% thanks to a 2% bounce in
technology shares and a recovery in Chinese property developers.

The CSI real estate index rose 0.9%, recouping
some of the large losses a day earlier.

Japan’s Nikkei rose 0.3%. Nasdaq stock futures
eased 0.1%, dragged lower by Uber, which fell
5.7% overnight as the ride-sharing company issued a downbeat
forecast after a surprise quarterly loss.

“A first rate cut by the Riksbank has not been enough to
further push the bullish sentiment. Eyes are on the Bank of
England,” said analysts at ING in a note to clients.

“Since Powell’s dovish stance just last week, markets will
listen carefully for a similar direction as the Fed. This also
means that markets may face a surprise if a similar turn
towards more dovishness is not reflected in this BoE meeting.”

The Japanese yen steadied at 155.56 per dollar
after falling for three sessions. It rose more than 3% last week
after Japanese authorities likely intervened in the market twice
to stem its fast declines.

On Thursday, the top currency diplomat Masato Kanda said
there is no limit for reserves in currency intervention, keeping
traders on edge, while minutes from the Bank of Japan’s April
meeting showed policymakers turned overwhelmingly hawkish,
helping the yen steady.

However, Japan’s real wages in March fell 2.5% from a year
earlier, marking declines for two years, an argument for
policymakers to not hike aggressively.

In the Treasuries market, yields were little changed
after edging up the day before, with movements likely to be
muted ahead of the U.S. inflation report next week. Two-year
yields held at 4.8449%, while the 10-year yield
was at 4.4963%, having risen 3 basis points
overnight.

Oil prices were slightly higher on Thursday, having
bounced off two-month lows the previous session. Brent
futures rose 0.2% to $83.76 a barrel, while U.S. crude
gained 0.3% to $79.24 a barrel.

Gold prices were 0.1% higher at $2,311.23 per ounce.

(Reporting by Stella Qiu; Editing by Christian Schmollinger)



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