Asian stocks move forward with earnings optimism, yen falls to four-year lows

File photo: A graph showing the recent Nikkei Stock Average outside a securities company by a man wearing a protective face mask during the outbreak of coronavirus disease (COVID-19) in Tokyo on November 2, 2020. You will pass the screen to be displayed. REUTERS / Issei Kato

October 20, 2021

Hideyuki Sano

Tokyo (Reuters) – Asian stocks rose while the yen fell against the dollar for the first time in four years, and U.S. long-term bond yields gained optimism on the global economy and corporate earnings on Wednesday. It reached the highest price in 5 months.

Japan’s Nikkei Stock Average rose 0.8%, while MSCI’s widest non-Japanese Asia Pacific stock index rose 0.3%, driven by a 0.9% rise in Australia.

“Stagflation was a Wall Street buzzword earlier this month, but undue pessimism is now receding, especially after strong US retail sales data on Friday,” said Mitsubishi UFJ Morgan Stanley Securities. Norihiro Fujito, Chief Investment Strategist, said.

In New York, the benchmark S & P 500 index rose 0.74%, just 0.4% below its record closing in early September. Meanwhile, the CBOE market volatility index fell 0.6 points after reaching its lowest level since mid-August at 15.57.

“The rise in tech and other high-growth stocks that would have been sold due to higher bond yields clearly shows that there is a strong optimism in future earnings. “.

Revenue reports will be in full swing in many countries in the coming weeks. Dutch chip makers ASML Holdings and Tesla will announce results later Wednesday.

The positive mood further boosted US Treasury yields, with 10-year Treasury yields rising to 1.662%. This is the last highest seen in May.

But two-year yields start at 0.448%, a peak on Monday, as traders have so far benefited from a bet that the Federal Reserve Board will be hawkish at a policy meeting scheduled for early November. It dropped to 0.404%.

Investors expect the Fed to announce a reduction in bond purchases, and money market futures are priced with a single rate hike later next year.

“We’re tweaking the wording based on the assessment that the Fed is more likely to be hawkish and inflation will probably be temporary. Nomura Securities senior strategist Naokazu Koshimizu said the Fed is Keeping the taper, but unrelated to future rate hikes, the market is likely to try to price the rate hikes and flatten the yield curve. “

In the currency market, the US dollar hit a four-year high against the yen at 114.585 yen per dollar due to rising yields in the United States.

In addition to US yields, the yen has fallen due to expectations of a wider trade deficit in Japan due to rising oil prices, and the Bank of Japan has loose monetary policy despite other central banks trying to tighten their policies. It shows the view that it will stick.

The yuan remained strong, trading at 6.3760 per dollar in offshore trading, close to a four-and-a-half-month high on Tuesday at 6.3685.

The euro was stable at $ 1.1643.

In cryptocurrencies, Bitcoin was $ 64,068, close to a record high of $ 64,895 as the first US Bitcoin futures-based exchange-traded fund opened on Tuesday.

Oil prices fell slightly in Asia, but remained near peaks for several years due to continued tight energy supplies around the world.

US crude oil futures traded at $ 82.65 a barrel, down 0.4% that day, but close to Monday’s peak of $ 83.18, the highest level since 2014. [O/R]

(Edited by Shri Navaratnam)

Asian stocks move forward with earnings optimism, yen falls to four-year lows

Source link Asian stocks move forward with earnings optimism, yen falls to four-year lows

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