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Asian markets in limbo ahead of US Fed decision

Tuesday 03.00 BST

What you need to know

  • Yen pulls back from highest in over a month
  • Aussie stocks lead gains as financials climb
  • Dollar edges higher ahead of Fed decision
  • Oil steadies after gains from Saudi, Russia warnings

Overview

Asia Pacific traders largely adopted a wait-and-see approach on Tuesday after a muted start to the week on Wall Street and ahead of Thursday’s (Hong Kong time) rates decision from the US Federal Reserve.

Hot topic

Australian equities led gains in the region, with the S&P/ASX 200 index up 0.7 per cent.

In Tokyo the Topix was up just 0.1 per cent as a 0.2 per cent fall in the industrials segment offset gains elsewhere. Shares in air bag-maker Takata fell as much as 18.5 per cent ahead of the company’s downgrade from the Tokyo Stock Exchange main board, scheduled for Thursday.

Hong Kong’s Hang Seng was up 0.1 per cent as well, with developer Sunac down as much as 8.4 per cent after it announced a $516m placement of new shares.

In New York on Monday, the S&P 500 equity index ended 0.1 per cent lower while the Nasdaq Composite edged up 0.4 per cent to a record close of 6,410 ahead of the release of earnings from a number of big tech companies.

Forex

Japan’s yen was pulling back from its strongest in more than a month as the dollar enjoyed a bout of firmness against most of its global peers.

The yen softened 0.2 per cent to ¥111.28 after touching its highest since mid-June on Monday. The dollar index — measuring the greenback against its global peers — was up 0.1 per cent at 94.063.

The Australian dollar continued to hover just below the $0.80 mark at $0.7914, where it has been for about a week. Yield on the 10-year Australian government bond was up 2 basis points at 2.692 per cent. Bond yields move inversely to price.

The euro remained near its highest against the greenback since August 2015 at $1.1640.

Commodities

Oil was steady in Asia after threats from Saudi Arabia and Russia against producer nations that failed to meet agreed-upon supply cuts bolstered prices in late Monday trade.

Brent crude, the international benchmark, was up 0.2 per cent at $48.68 per barrel. West Texas Intermediate, the US marker, rose 0.3 per cent at $46.46.

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