Asian Stocks Fall as Dollar Slumps on Trump Talk: Markets Wrap 

Asian stocks
  • Japanese shares lead decline as yen strengthens for fourth day
  • Hong Kong equities pare losses amid Chinese export data

Most Asian stocks fell after the dollar slumped and Treasury bond yields dropped to the lowest level this year in reaction to President Donald Trump’s comments that the greenback was getting too strong and that he won’t brand China a currency manipulator.

Japanese shares retreated for a third day after the yen rose to the strongest in almost five months, U.S. stocks declined and volatility climbed across asset classes. Hong Kong stocks pared losses after China’s overseas shipments last month jumped the most in two years as global demand held up. The Bloomberg Dollar Spot Index fell below its 200-day moving average. The Australian dollar jumped as employment surged more than expected in March. Mining stocks tumbled along with iron ore.

Trump’s comments on China, from an interview with the Wall Street Journal, abandoned a core election promise that tapped into anger about trade-driven job losses. The remarks are seen as reducing the risk that China could dump its holding of Treasuries in retaliation for being tagged a currency manipulator. China’s currency traded outside of the country gained the most since last month, and rose further on Thursday after the People’s Bank of China strengthened its currency fixing by the most in almost three months.

Bonds also benefited from Trump’s comments that he likes the Federal Reserve’s low-interest-rate policy and is leaving open the possibility of renominating Chair Janet Yellen.

Global equity markets are entering a key period, with earnings season ramping up against a backdrop of mounting geopolitical tensions around Syria and North Korea as well as elections in Europe. Trump’s struggle to push through his fiscal agenda and the debate over the pace of monetary policy adjustment in the world’s biggest economy also cloud the picture.

In central bank action, Singapore left monetary policy unchanged and said it can maintain a neutral stance for an extended period of time to help support the economy’s recovery. South Korea also held its key interest rate steady as exports and inflation data indicate the economy is improving.

Here’s what investors are watching:

  • JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. report Thursday in the U.S., kicking off an earnings season for big banks that will focus on net interest margins, credit trends and trading.

Here are the main moves in markets:

Currencies

  • The yen rose 0.2 percent to 108.83 per dollar as of 12:58 p.m. in Tokyo, up 2.1 percent this week to trade at the highest level since November.
  • The offshore yuan increased for a third day, adding 0.1 percent after a 0.2 percent increase on Wednesday.
  • The Australian dollar jumped 0.8 percent as March employment rose 60,900 from February, topping forecasts for a 20,000 gain. Australia’s labor market is showing signs of recovery following lackluster hiring last year.
  • The South Korean won jumped the most in almost a month, gaining 1.1 percent. The currency plunged 2.7 percent in the six days through April 11.

Stocks

  • The Topix fell 1.1 percent, sending it toward the lowest closing level since November. The index has the second-worst performance among developed markets this year, after Israel, with a loss of 3.6 percent.
  • Sydney’s S&P/ASX 200 dropped 0.8 percent, falling for the first time in five days as commodity producers led declines. Singapore’s Straits Times Index lost 0.6 percent.
  • The Hang Seng fell 0.1 percent, paring an earlier drop of 0.6 percent, while Chinese shares traded in Hong Kong erased losses. China’s exports rose 16.4 percent in dollar terms during March, reversing a 1.3 percent drop a month earlier.
  • South Korea’s Kospi rose 0.1 percent after halting a six-day selloff on Wednesday.
  • Futures on the S&P 500 Index were little changed. The benchmark index closed down 0.4 percent, while the Dow Jones Industrial Average fell 0.3 percent. The Chicago Board Options Exchange SPX Volatility Index, better known as the VIX, rose a fourth day. The Stoxx Europe 600 rose 0.2 percent after a two-day decline.

Bonds

  • The 10-year U.S. Treasury yield dropped one basis point to 2.23 percent, the lowest closing level since Nov. 16. The rate fell six basis points on Wednesday.
  • Japan’s benchmark bond yield declined two basis points to the lowest since November.
  • Australian 10-year yields dropped five basis points to 2.45 percent.

Commodities

  • West Texas Intermediate crude fell 0.2 percent to $53.01 a barrel, as a government report showed stockpiles dropped from record levels while production increased.
  • Gold slipped 0.1 percent to $1,286.05 an ounce after climbing for the past four days.
  • Iron ore delivered to Qingdao, China, tumbled 8.5 percent to $68.04 per metric ton on Wednesday, its biggest one-day slump since March 2016.

Source: Bloomberg

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