Yen Touches 34-Year Low, Europe Awaits Key Data: Markets Wrap - Yahoo Finance

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(Bloomberg) -- European stocks are set for a tepid session ahead of key economic data in the region, tracking a similar trading day in Asia. The yen touched its lowest level versus the dollar since 1990, fueling intervention bets.

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The Euro Stoxx 50 futures were little changed, while the US contracts rose 0.3% as traders await key inflation data in the US in a holiday-shortened week. Asian equities were mixed as gains in Japanese and Australian shares were offset by losses in China.

The yen cut some of its loss following Japan Finance Minister Shunichi Suzuki’s stern intervention warning, having earlier slid to its lowest level versus the greenback in about 34 years. The Nikkei 225 Index of shares closed within in a whisker of its record high.

Investors have driven the yen higher after “dovish comments” from BOJ board member Naoki Tamura, said David Forrester, Singapore-based senior FX strategist at Credit Agricole. “The warning by Kanda earlier this week suggests the BOJ’s finger will be on the trigger for FX intervention,” he said, referring to Japan’s vice finance minister for international affairs Masato Kanda.

Traders in Europe will watch for consumer and economic confidence data for the region to firm up their bets on an interest-rate cut by the ECB. Meanwhile, focus will shift to the US where Federal Reserve’s preferred inflation gauge will be announced on Friday.

Treasuries steadied in Asian trading after rebounding from session lows on Tuesday following a $67 billion sale of five year-notes. The dollar was slightly stronger against its Group-of-10 peers, while the offshore yuan was little changed weaker after the People’s Bank of China once again boosted support for the currency.

Read more: Big Yen Option Bet Risks Crushing Traders as Intervention Looms

Shares retreated in China and Hong Kong, with technology companies accounting for the majority of the losses. The decline came as the region’s AI-linked companies mirrored the overnight fall in Nvidia’s shares, and as Alibaba’s plan to shelve listing of its logistics arm soured sentiment.

Japan’s Nikkei 225 is one of few Asian equity gauges that are able to match the pace of the US rally — advancing more than 20% this year and on track for one of its best quarters ever. Hong Kong has been unable to fully recover after plunging at the start of the year and is headed for a slight decline in the three-month period, while Sydney is set to post a modest gain.

Even the recent advance in Chinese stocks will likely be tested, as key financial institutions announce earnings, starting with Industrial & Commercial Bank of China Ltd. later Wednesday.

“Risk sentiment is attempting to stabilize following recent profit-taking” in Asian stocks, said Jun Rong Yeap, strategist at IG Asia Pte. “Going ahead, much will hinge on the upcoming earnings season to provide further conviction for the economic resilience.”

Alibaba Group Holding Ltd. declined in Hong Kong, and was poised for its lowest close since January, after the company called off a $1 billion-plus initial public offering for its Cainiao logistics arm. Chinese EV giant BYD Co. also fell after reporting 2023 profit that missed estimates.

Apple Inc.’s iPhone shipments in China dropped about 33% in February from a year ago, according to official data, extending a slump in demand for the flagship device in its most important overseas market.

Oil extended a modest decline after an industry report pointed to a sizable build in US inventories, and wider markets struck a weaker tone ahead of the end of the quarter. Gold steadied close to its record high.

Key events this week:

Bank of England issues financial policy committee minutes, Wednesday
Eurozone economic confidence, consumer confidence, Wednesday
Fed Governor Christopher Waller speaks, Wednesday
UK GDP revision, Thursday
US University of Michigan consumer sentiment, initial jobless claims, GDP, Thursday
Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
US personal income and spending, PCE deflator, Friday
Good Friday. Exchanges closed in US and many other countries in observance of holiday. US federal government is open.
San Francisco Fed President Mary Daly speaks, Friday
Fed Chair Jerome Powell speaks, Friday