Written by Lei Wee
SINGAPORE (Reuters) – The yen languished near multi-decade lows on Thursday, but the threat of intervention by Japanese authorities left investors wary of pushing the currency to new lows, a key U.S. inflation gauge. Asian stocks fell ahead of this.
Markets were largely range-bound ahead of Friday's much-anticipated U.S. core personal consumption expenditure (PCE) price index data, the Fed's preferred inflation measure. However, given the long Easter weekend in many countries, there will be little market open to digest the new reading.
The yen is also attracting attention, falling to a 34-year low of 151.975 yen in the previous session, and was almost unchanged at 151.30 yen to the dollar. [FRX/]
Japan's three main currency authorities held an emergency meeting on Wednesday to discuss the weaker yen and signaled they were prepared to intervene in markets to stem what they described as disorderly and speculative movements in the currency.
This comes after authorities stepped up verbal warnings to stop the yen from weakening, with Finance Minister Shunichi Suzuki saying he would take “resolute measures” against excessive currency fluctuations. .
The last time Japanese authorities intervened in support of the yen was in 2022, when they again used expressions such as “deeply concerned'' and promised to take “decisive measures'' before intervening.
“Contrary to the common belief that the 152-day is a line in the sand, I think it's more the magnitude of the change that matters,” said Christopher Wong, currency strategist at OCBC.
“There are limits to how far verbal intervention can go. Nevertheless, the actual risk of intervention is still high, if not higher.”
The weaker yen has been a tailwind for Japan's Nikkei average, which has risen about 3% for the month so far. The stock fell 1% last time, but it remained not far from its all-time high. [.T]
In China, concerns about the outlook for the world's second-largest economy persist, and stock prices have fallen into the red, weighed down by strong selling from foreign investors.
The blue-chip CSI300 index fell to a one-month low in early trading, while the Shanghai Composite Index struggled below the psychologically important 3,000 points, falling 0.1%. [.SS]
The yuan remained unchanged at 7.2270 yuan to the dollar, near a four-month low, weighed down by expectations that the Chinese government would implement additional monetary easing to support China's fragile economic recovery. did.
Hong Kong's Hang Seng index barely rose, with more than 1% gains in technology companies offsetting a boost from real estate names.
All this caused MSCI's broadest index of Asia-Pacific stocks outside Japan to drop 0.05%.
dollar power
In currencies, the dollar gained ground due to comments from Federal Reserve Board member Christopher Waller late Wednesday that there was no need to rush to cut interest rates.
The odds of the Fed making its first interest rate cut in June remain priced in at more than 50%, but traders are betting more on similar moves by the European Central Bank and Bank of England in the same month.
Sweden's central bank indicated on Wednesday that a series of interest rate cuts are likely from May if inflation continues to fall towards its 2% target.
Against the US dollar, the euro fell 0.1% to $1.0816, and the pound sterling fell 0.12% to $1.26255.
The NZ dollar fell to a four-month low of US$0.5981.
“(The dollar) remains at the mercy of the relatively hawkish stance of the Fed and other central banks, including all 19 policymakers. has recently taken on a more dovish tone.” At Macquarie.
The new dollar strength halted a ferocious rally in gold prices, which hit a record high last week. The yellow metal fell 0.2% to $2,189.81 an ounce. [GOL/]
Meanwhile, oil prices rose slightly, with Brent crude rising 36 cents to $86.45 per barrel and U.S. crude rising 44 cents to $81.80 per barrel. [O/R]
(This article has been corrected to say Asian stocks fell, not rose, in first paragraph)
(Reporting by Rae Wee; Editing by Tom Hogue)
