Asian markets experienced gains on Thursday, with the dollar facing declines after the assurance from the most influential central banker that U.S. rates would decrease this year.
This set the stage for European policymakers. Although Japan's Nikkei initially rose, it later reversed gains, and the yen surpassed 149 per dollar, reaching a one-month high amid speculation that the Bank of Japan might end negative interest rates this month.
MSCI's broadest index of Asia-Pacific shares outside Japan increased by 0.4%, while Japan's Nikkei declined by 0.9% after reaching a new all-time high earlier in the session. In Japan, nominal pay for workers in January grew by 2% from the previous year, accelerating from a gain of 0.8% the previous month.
The major union in Japan secured significant pay hikes in 2024 wage talks.
A board member of the Bank of Japan, Junko Nakagawa, stated that the economy was steadily moving towards achieving the central bank's 2% inflation target.
On the speculation of a potential move by the Bank of Japan this month, the dollar lost 0.5%, reaching a one-month low of 148.67 yen. China's better-than-expected trade figures had a muted impact, with exports rising 7.1% in the January-February period and imports increasing by 3.5%, surpassing forecasts.
Chinese blue chips rose by 0.1%, and the Shanghai Composite index gained 0.2%. Hong Kong's Hang Seng index stood out with a 0.2% decline.
In other markets, Taiwan's share market hit a record high, and Federal Reserve Chair Jerome Powell's statement that the Fed still expects to cut rates later this year influenced positive market sentiments.
The focus is now on policy actions in Europe, where the European Central Bank is expected to keep interest rates steady at a record 4.0%.
However, any signals from policymakers supporting a rate cut in June would bring relief to the markets. Futures are almost fully priced for a first rate cut from the ECB in June, with an expected total easing of 88 basis points for the year.
In currency markets, the broad weakness in the U.S. dollar helped the euro break key resistance, reaching a six-week high of $1.0901. Treasuries experienced a slight dip in Asia, with the benchmark 10-year U.S. yield rising by almost 2 basis points.
Commodity prices rallied with a softer dollar, as gold prices reached a record high of $2,152.09 per ounce, and oil prices held steady. Brent stood at $82.97 a barrel, while U.S. crude remained unchanged at $79.11 per barrel.
Paraphrasing text from "Investing" all rights reserved by the original author.
