Asian markets in the red after Japanese yen falls to 38-year low prompts fresh intervention

Asia-Pacific equity markets were mostly in the red on Thursday as market participants reassessed the outlook for the Bank of Japan’s monetary policy in light of a sharp depreciation in the yen, which sank to a 38-day low years.

Japan (NKY:IND) -0.85%. of Japan May retail sales rose more than expected; the yen falls to a 38-year low against the dollar. The yen depreciated by more than 160 to the dollar, hitting its weakest levels since 1986 and keeping Japanese authorities under pressure to defend the currency. Strong retail sales data and a sharp weakening of the yen raised bets that the Bank of Japan could raise interest rates at its July meeting.

China (SHCOMP) -0.55%. Chinese markets fell to a 4-month low, giving up the previous session’s gains amid caution ahead of official PMI figures and rising tensions between China and the US.

China’s industrial profits rose much more weakly in May, with growth in the first 5 months of the year also weakening.

Hong Kong (HSI) -1.92%.

India (SENSEX) +0.18%. The BSE Sensex continued its upward momentum, boosted by optimism around the Union Budget 2024-25, rising foreign inflows and solid domestic economic data.

Australia (AS51) -0.73%. Australian consumer inflation expectations rose to 4.4% in June 2024 from a two-and-a-half-year low of 4.1% in May.

In the US on Wednesday, all three major indexes ended a choppy session slightly higher as investors held back from making significant bets ahead of the key PCE report later in the week.

US futures fell on Thursday: Dow -0.13%; S&P 500 -0.20%; Nasdaq -0.25%.

Market participants are now eyeing Thursday’s pending US jobless claims, durable goods orders and home sales data, along with Friday’s PCE inflation report.

Key events such as the first US presidential debate between Joe Biden and Donald Trump on Thursday and the French election on Sunday are also in the spotlight.

Meanwhile, an escalation of conflict in the Middle East, with ongoing tensions between Israel and Lebanon’s Hezbollah, as well as Ukrainian drone attacks on Russian oil infrastructure, continued to fuel fears of a supply disruption to the market.

Coins: (JPY:USD), (CNY:USD), (AUD:USD), (INR:USD), (HKD:USD), (NZD:USD).

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