Asian Equities Gain; Yen Falls as Havens Retreat

Stocks advanced in Asia following a record-breaking Wall Street session, while the yen declined as havens retreated amid optimism the U.S. favours a peaceful resolution to North Korea’s nuclear threats.

Futures on the S&P 500 Index rose with equities in Australia, South Korea and Hong Kong. Japanese markets are closed for a holiday. The S&P 500 climbed above 2,500 for the first time on Friday and the Dow Jones Industrial Average chalked another record close as investors shrugged off the latest North Korean missile test. The dollar was steady after declining on Friday when U.S. retail sales raised concerns about the strength of the economy.

With weaker readings also on factory output and consumer confidence in August the focus now turns to the U.S. Federal Reserve meeting this week, where officials are expected to announce the start of the reduction of the central bank’s $4.5 trillion balance sheet, while keeping the benchmark rate unchanged. Investors will be tuning in to a fresh round of speeches by Fed Chair Janet Yellen and regional Fed presidents for clues on the central bank’s next moves as the outlook for the U.S. economy has been clouded by Hurricane Harvey. The Bank of Japan is also expected to stand pat when it meets to discuss its policy later in the week.

The U.S. seeks a peaceful resolution but is prepared to use military force if diplomatic efforts fail to end the nuclear standoff with North Korea, Secretary of State Rex Tillerson told CBS. The comments were made ahead of U.S. President Donald Trump’s first address before the United Nations on Tuesday as foreign leaders gather in New York to discuss how to deter North Korea from enhancing its nuclear capability.

Meanwhile, Japanese Prime Minister Shinzo Abe is weighing holding a snap general election as early as next month amid growing support for his handling of the North Korea crisis, according to public broadcaster NHK.

Here are the main moves in markets:

Stocks

· Futures on the S&P 500 Index were up 0.3 percent as of 2:34 p.m. Tokyo time. The underlying measure rose 0.2 percent to 2,500.23 on Friday.

· The Kospi index climbed 1.1 percent and Australia’s main gauge was up 0.4 percent.

· The Hang Seng Index in Hong Kong gained 1 percent. The Shanghai Composite Index also advanced.

· The MSCI Asia Pacific Index advanced 0.6 percent.

Currencies

· The Japanese yen dipped 0.3 percent to 111.16 per dollar, extending Friday’s 0.5 percent drop.

· The Bloomberg Dollar Spot Index was flat after falling 0.3 percent on Friday.

· The euro was little changed at $1.1945.

· The Australian dollar rose 0.3 percent to 80.25 U.S. cents while the New Zealand dollar added 0.2 percent to 73.13 U.S. cents.

Bonds

· The yield on 10-year Treasuries rose one basis point to 2.2 percent, a three-week high, on Friday. Trading will not start until London opens due to the Japan holiday.

· Yields on Australian 10-year notes climbed almost six basis points to 2.80 percent.

Commodities

· Gold fell 0.2 percent to $1,317.83 an ounce, extending Friday’s 0.7 percent drop.

· West Texas Intermediate crude was steady at $49.91 a barrel. Prices rose more than 5 percent last week, buoyed by higher demand forecasts.

Source: Bloomberg

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