Yen Extends Slump on BOJ Move, Asian Stocks Advance: Market Wrap 

• Mexican peso slides for second day, gold’s decline contines
• Greenback still set for monthly drop despite recent gains

The yen extended its biggest decline in a week and Japanese bonds rose as the nation’s central bank stepped in to buy debt. Asian stocks climbed in a day of thin trading with many markets closed for Lunar New Year celebrations.

The Japanese currency dropped against all its major peers as the BOJ’s move underscored the central bank’s commitment to maintaining its yield-curve target. The MSCI Asia Pacific Index traded near its highest level since September, with the Topix heading toward its first weekly gain in three weeks. Oil remained above $53 a barrel, while gold headed for its longest slump in three months.

The BOJ’s move was seen as a commitment to keep the 10-year yield at around zero percent. The central bank is likely to leave policy unchanged at its meeting next week as recovering exports, strength in production and buoyant oil prices support reflation. Meanwhile, a global equities rally slowed as corporate results from Caterpillar Inc. to Microsoft Corp. delivered a mixed picture on the state of the American economy. Souring U.S. and Mexican relations pushing the countries closer to a trade war also weighed on financial markets, and the peso fell.

Markets in China, South Korea, Taiwan and Vietnam were closed Friday for the start of Lunar New Year. Hong Kong, Malaysia and Singapore had shortened sessions.

Here are the main moves in markets:

Currencies

• The yen slid 0.4 percent to 114.94 per dollar as of 1:34 p.m. in Tokyo, after dropping 1.1 percent the previous session. The currency is down 0.3 percent for the week, its worst showing since Dec. 16.
• The Bloomberg Dollar Spot Index added 0.2 percent after jumping 0.6 percent Thursday. The measure is still down 0.4 percent for the week, headed for a fifth straight weekly decline — the longest stretch since May 2015 — after rising to the highest in more than a decade in early January.
• The peso dropped 0.6 percent, extending Thursday’s 0.7 percent retreat. Mexico’s president scrapped his trip to Washington after Donald Trump doubled down on campaign pledges to rewrite the North American Free Trade Agreement and charge his southern neighbor to build a border wall.

Stocks

• The Topix rose 0.3 percent, bringing it near its highest point in more than a year.
• The MSCI Asia Pacific Index advanced 0.1 percent and was poised for its highest close since Sept. 27.
• Australia’s S&P/ASX 200 Index rose 0.7 percent as the nation’s markets reopened after a national holiday Thursday. Hong Kong’s Hang Seng Index slipped 0.1 percent, while Singapore’s Straits Times Index added 0.3 percent.
• Futures on the S&P 500 Index were down 0.1 percent. The benchmark slipped 0.1 percent Thursday after rising past 2,300 for the first time. The Dow Jones Industrial Average extended an all-time high.

Bonds

• Japanese 10-year yields fell one basis point to 0.08 percent. The BOJ boosted the amount of 5-to-10-year bonds it buys in its outright purchase operations.
• Australian 10-year yields jumped six basis points to 2.79 percent, while those on similar-dated New Zealand debt also advanced six basis points to 3.41 percent.
• The yield on 10-year Treasuries was up one basis point to 2.51 percent. It slipped one basis point Thursday after an auction of $28 billion in seven-year notes drew a record amount of buying from indirect bidders, signaling interest from foreign central banks and mutual funds.

Commodities

• Gold retreated 0.4 percent to $1,184.23 an ounce after dropping 1 percent Thursday. It is headed for a fourth straight loss, which would be the longest slump since October.
• West Texas Intermediate crude was at $53.80 a barrel, up less than 0.1 percent after surging 2 percent Thursday on optimism that OPEC and other producing nations would adhere to their pledged output cuts.

Source: Bloomberg

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