Asia Stocks Mixed as Dollar Slumps on Trump Comments

Asian stocks were mixed while 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 fell for a third day, though they pared the day’s worst losses as the yen erased an earlier gain. The Bloomberg Dollar Spot Index dropped below its 200-day moving average. Hong Kong stocks gained after China’s overseas shipments last month jumped the most in two years as global demand held up. The Australian dollar jumped as employment surged more than expected in March. South Korean stocks and the won continued to rebound.

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 are the main moves in markets:

Currencies

· The Bloomberg Dollar Spot Index dropped 0.2 percent to the lowest since March 28 as of 2:50 p.m. in Tokyo. The yen was little changed at 109.04 per dollar, after gaining 0.3 percent earlier. The currency is up 1.9 percent this week, trading near the highest level since November.

· The offshore yuan increased for a third day, adding 0.2 percent after a 0.2 percent increase on Wednesday.

· The Australian dollar jumped 0.9 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 advanced 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 MSCI Asia Pacific Index rose 0.2 percent, though more shares declined than advanced.

· The Topix fell 0.8 percent, paring an earlier drop of 1.4 percent. The index has the second-worst performance among developed markets this year, after Israel, with a loss of 3.3 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 0.3 percent.

· The Hang Seng climbed 0.2 percent after an earlier drop of 0.6 percent, while Chinese shares traded in Hong Kong advanced 0.4 percent. 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 0.7 percent after halting a six-day selloff on Wednesday.

· Futures on the S&P 500 Index rose 0.1 percent. 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 one basis point, toward the government’s target of zero percent

. The 30-year yield fell one basis points.

· Australian 10-year yields dropped four basis points to 2.46 percent.

Commodities

· West Texas Intermediate crude fell 0.1 percent to $53.05 a barrel, as a government report showed stockpiles dropped from record levels while production increased.

· Gold slipped 0.1 percent to $1,284.94 an ounce after climbing for the past four days to the highest level in five months.

· Iron ore futures climbed 1.2 percent. That’s after the benchmark spot price tumbled 8.5 percent on Wednesday, its biggest one-day slump since March 2016. Iron ore fell into a bear market last week.


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