HONG KONG (Businesshala) – The dollar rose to a four-and-a-half-year high against the yen on Wednesday after better-than-expected US retail data also boosted Wall Street equities, though Asian stocks failed to follow suit. .
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.45% to a three-week high on Tuesday, with most markets falling, while Japan’s Nikkei lost 0.4%.
The dollar rose to a high of 114.97 yen in early Asian hours, its strongest since March 2017, while the euro was at a 16-month low of $1.1320.
The greenback was helped by Tuesday’s data that showed US retail sales rose faster than expected in October, potentially encouraging the US Federal Reserve to accelerate its asset purchase program, as inflation remained too high. happened.
Rob Carnell, head of research for Asia Pacific at ING, said: “The data supports the sentiment that things are going very well, and the Fed could be a little more aggressive if it wanted to be without completely crashing the party.” Is.”
“Top of mind for everyone is inflation, it’s still an issue we got from the US yesterday, and we’ve got a whole barrage of other inflation data coming in today, especially the UK and Canada,” he said.
Britain publishes its October CPI inflation data later today, with the Bank of England likely to increase pressure in December after surprising markets came under fire last month.
“It’s not about the Biden-Xi summit, which had the potential to do harm, but it doesn’t seem to,” Cornell said.
In a three-hour meeting on Tuesday, US President Joe Biden and Chinese leader Xi Jinping quelled some of the heat in Sino-US tensions, though both sides held their firm positions on a range of issues.
A positive trend offered marginal gains in Asian stocks on Tuesday, but proved to be short-lived.
On Wednesday, the Hong Kong benchmark slid 0.4%, weighed down by property developers and casinos as traders bet that the recent rebound in both sectors had gone too far. Chinese blue chips were flat.
Australian shares fell 0.5%, weighing in on the country’s largest bank Commonwealth Bank of Australia, whose shares slipped 6% after taking a hit on margins from a low interest rate environment and mortgage competition.
Overnight on Wall Street, the Dow Jones Industrial Average was up 0.15%, the S&P 500 was up 0.39% and the Nasdaq Composite was up 0.76%, supported by data from retail sales.
It also boosted the US Treasury and saw 10-year note yields reach 1.646% in early Asia, a three-week high. [US/]
US crude fell 0.66% to $80.25 a barrel. Brent crude fell 0.5% to $82.03 a barrel. [O/R]
Spot gold rose 0.25% to $1,854 an ounce, having climbed a five-month high of $1,876.9 a day earlier, on rising inflation concerns.
Rival inflation hedge bitcoin was steady at $60,240, having dropped 5% the day before and briefly dipped below $60,000.