- Japan Shares Fall on Yen Gain
Japanese shares fell for a second day after the yen touched the highest since November while Treasuries held gains that had been spurred when President Donald Trump targeted reworking America’s trade relationships. The dollar pared declines that had come after Treasury Secretary nominee Steven Mnuchin commented on currency strength.
The Topix Index fell 0.4 percent as of 9:46 a.m. in Tokyo, while equities advanced in Australia. Futures on the S&P 500 Index were little changed after the benchmark declined Monday, when European shares fell to the lowest level of 2017. Gold retreated after touching the highest since November and 10-year Australian yields fell a second day.
While investors have been looking for details on campaign promises to boost growth and government spending, much of the incoming administration’s initial pronouncements targeted trade or pushed companies to invest more inside the U.S. Mnuchin flagged concerns about China’s trade and exchange rate policies and said the administration would focus on infrastructure spending. President Trump promised a “very major” border tax and signed an executive order to withdraw the U.S. from the Trans-Pacific Partnership deal. He announced on the weekend he’d seek to renegotiate the North American Free Trade Agreement.
“The first couple of days of the new presidency have seen the rhetoric weighted toward protectionist policies while little detail is yet available on stimulus measures,” said Ric Spooner, Sydney-based chief analyst at CMC Markets Asia Ltd. “Unwinding free trade agreements and imposing border taxes is seen by markets as a negative for the dollar, which is not being helped by statements from the U.S. Treasury secretary about it being overvalued.”
Money managers will be dissecting earnings from some of the world’s largest companies this week with Alphabet Inc. and Alibaba Group Holding Ltd. among those reporting results.
Here are the main moves in markets:
Stocks
- The Nikkei 225 Index fell 0.4 percent. Futures on the FTSE China A50 advanced 0.2 percent, while those on the Hang Seng Index were little changed.
- The MSCI Asia-Pacific Index was little changed.
- Australia’s S&P/ASX 200 Index rose 0.5 percent, after a two-day slide, while New Zealand stocks retreated 0.2 percent and South Korea’s Kospi lost 0.1 percent.
- The S&P 500 Index fell 0.3 percent to 2,265.20. The Dow Jones Industrial Average slid to 19,799.85, clinging to a 0.2 percent advance in 2017.
- The Stoxx 600 benchmark index of European shares fell 0.4 percent to the lowest close since December.
- The MSCI Emerging Market Index rose 0.1 percent to add to its 1 percent jump on Monday.
Currencies
- The yen declined 0.2 percent to 112.87 per dollar, after jumping 1.7 percent the previous session. The Australian and New Zealand dollars were little changed after each advanced more than 0.2 percent to reach levels last seen in November.
- The Bloomberg Dollar Spot Index slid 0.2 percent to the lowest since Dec. 8, after dropping 0.7 percent on Monday. It has fallen for four straight weeks, the longest retreat since February.
Bonds
- Australian bonds gained in the wake of Treasuries, with the yield on 10-year notes down four basis points to 2.72 percent.
- The yield on the 10-year Treasury was steady at 2.40 percent after it declined seven basis points Monday; bonds had extended their rally after Trump vowed “a very major border tax” on imports in a meeting with business leaders.
Commodities
- Gold was down 0.1 percent after climbing 0.7 percent Monday and touching a two-month high of $1,220.26 an ounce.
- West Texas Intermediate crude oil rose 0.3 percent to $52.89 a barrel. It slid 0.9 percent the previous session after U.S. drillers added the most rigs in more than three years, making it difficult for OPEC to drain global oversupply.
