Asian stocks fell with crude futures as investors weighed the prospects for higher rates in the U.S., while shares in Japan climbed on speculation for further stimulus.
The MSCI Asia Pacific Index fell 0.1 percent to 139 as of 9:07 a.m. in Tokyo. Japan’s Topix rose 0.4 percent as the yen dropped after Bank of Japan Governor Haruhiko Kuroda said there is “sufficient chance” for more easing in September. Federal Reserve Vice Chairman Stanley Fischer signaled that a 2016 rate hike is still under consideration, echoing hawkish comments from New York Fed President William Dudley last week, ahead of a speech by Janet Yellen later this week at Jackson Hole, Wyoming.
“The Fed is a bit all over the shop so its going to be Janet Yellen’s job this Friday to try to centralize all of these messages into a coherent message that markets can react to,” Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion, said on Bloomberg Radio. “There’s very little reason the Fed needs to raise rates. I don’t think inflation is getting out of control. It’s going to be interesting to see what the Fed chair has to say.”
Asian stocks have rallied 23 percent from a February low through Friday as lackluster data from the world’s biggest economies fueled speculation central banks will continue to support them with stimulus and loose monetary policy. Investors are looking for clues from the Fed on the timing of potential interest-rate increases. While the odds the Fed will raise borrowing costs in December climbed to 51 percent, traders are betting there’s only a 22 percent chance of tightening next month, data compiled by Bloomberg showed.
Japan’s Topix index added to Friday’s 0.4 percent gain as the yen traded at 100.57 against the dollar. The BOJ won’t hesitate to act based on discussions on the results of a comprehensive review at its September 20-21 board meeting, Kuroda said in an interview published Saturday in the Sankei newspaper.
South Korea’s Kospi index slipped 0.3 percent. Australia’s S&P/ASX 200 Index fell 0.1 percent. New Zealand’s S&P/NZX 50 Index climbed 0.3 percent. Markets in China and Hong Kong have yet to start trading.
Futures on the China A50 Index added 0.1 percent in their most recent trading, as did contracts on the Hang Seng Index. Hong Kong stocks fell Friday, paring their third weekly advance. The Shanghai Composite Index gained 0.1 percent on Friday.
Futures on the S&P 500 Index were little changed. The U.S. equity benchmark index lost 0.1 percent on Friday as a two-month rally ran out of steam amid signs investors are again growing skeptical of the long-awaited rebound in corporate profits.
West Texas Intermediate crude slipped 0.6 percent in early Asian trading after surging 9.1 percent last week. Oil declined after Iraq, OPEC’s second-biggest producer, said it will boost oil exports in the next few days amid a glut of supply.