Asian Stocks Mixed; Oil Extends Winning Streak

Asian stocks were mixed while oil extended the longest winning streak of the year. The yen erased an earlier gain sparked by the defeat of Japan’s ruling party in Tokyo elections.

Japan’s Topix rose as a survey showed confidence grew among manufacturers, while stronger Chinese data failed to spark gains among Shanghai shares. Trading volumes across Asia were light at the start of a shortened holiday week in the U.S. that culminates with Friday’s jobs report. The first day of China’s new bond link to the rest of the world started on Monday, with little in the way of a market reaction. The dollar rose and oil climbed for an eighth straight day.

With global equities trading near a record high on bets of improving growth, stocks continue to be one of the best-performing assets this year, with emerging-market shares soaring in the first six months of 2017. History shows the dollar may be in for more pain after its worst start to a year since 2006, while the euro remains the strongest major currency this year on bets a recovery is broadening.

Central banks stole the limelight last week as a more hawkish tilt spurred some reassessment from investors on policy steps. Attention now turns to a swathe of manufacturing reports. A private gauge of China’s manufacturing exceeded estimates in June, adding to evidence that the economy is maintaining some momentum after a strong start to the year. Japan’s Tankan survey showed confidence among large manufacturers improved for a third straight quarter.

Scandal-hit Japanese Prime Minister Shinzo Abe faces one of his biggest tests since coming to power in late 2012, after his ruling party lost to an upstart outfit in an election for Tokyo’s assembly. Haruhiko Kuroda shouldn’t serve another term as governor of the Bank of Japan because the central bank will need fresh ideas as it moves toward exiting years of unprecedented monetary easing, according to an adviser to the prime minister.

Here are the main moves in markets:

Stocks

· The MSCI Asia Pacific Index was little changed as of 2:25 p.m. in Tokyo. The gauge finished the second quarter with a gain of 5.2 percent.

· Japan’s Topix index increased 0.2 percent. South Korea’s Kospi index fell 0.2 percent and Australia’s S&P/ASX 200 slipped 0.5 percent.

· Hong Kong’s Hang Seng added less than 0.1 percent and the Shanghai Composite was down less than 0.1 percent. Indonesia’s benchmark index rose 0.6 percent as the market reopened after a week-long holiday.

· Futures on the S&P 500 advanced 0.2 percent after the underlying gauge rose 0.2 percent on Friday to round out its worst week since April. The U.S. market will be closed Tuesday for the July 4 holiday.

Currencies

· The yen fell 0.2 percent to 112.52 per dollar, after erasing an earlier advance of as much as 0.4 percent. The Australian dollar and South Korean won lost 0.2 percent.

· The Bloomberg Dollar Spot Index rose less than 0.1 percent after dropping 1 percent last week and touching the lowest level since October.

· The pound fell 0.2 percent, after an eight-day rally. The euro slipped 0.1 percent.

Bonds

· The yield on 10-year Treasuries rose two basis points to 2.33 percent, adding to a 16-basis point surge last week, the steepest since March.

· Australia benchmark yields jumped nine basis points to 2.69 percent.

Commodities

· Crude rose 0.4 percent to $46.20 a barrel. WTI has rallied 8.7 percent over eight days, after tumbling into a bear market.

· Gold slipped 0.3 percent to $1,237.98 an ounce.

Source: Bloomberg

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