- Asian Stocks Fall as Dollar Slumps on Trump Talk
Most Asian stocks fell after the dollar slumped and Treasury bond yields dropped to the lowest level this year in reaction to President Donald Trump’s comments that the greenback was getting too strong and that he won’t brand China a currency manipulator.
Japanese shares retreated for a third day after the yen rose to the strongest in almost five months, U.S. stocks declined and volatility climbed across asset classes. Hong Kong stocks pared losses after China’s overseas shipments last month jumped the most in two years as global demand held up. The Bloomberg Dollar Spot Index fell below its 200-day moving average. The Australian dollar jumped as employment surged more than expected in March. Mining stocks tumbled along with iron ore.
Trump’s comments on China, from an interview with the Wall Street Journal, abandoned a core election promise that tapped into anger about trade-driven job losses. The remarks are seen as reducing the risk that China could dump its holding of Treasuries in retaliation for being tagged a currency manipulator. China’s currency traded outside of the country gained the most since last month, and rose further on Thursday after the People’s Bank of China strengthened its currency fixing by the most in almost three months.
Bonds also benefited from Trump’s comments that he likes the Federal Reserve’s low-interest-rate policy and is leaving open the possibility of renominating Chair Janet Yellen.
Global equity markets are entering a key period, with earnings season ramping up against a backdrop of mounting geopolitical tensions around Syria and North Korea as well as elections in Europe. Trump’s struggle to push through his fiscal agenda and the debate over the pace of monetary policy adjustment in the world’s biggest economy also cloud the picture.
In central bank action, Singapore left monetary policy unchanged and said it can maintain a neutral stance for an extended period of time to help support the economy’s recovery. South Korea also held its key interest rate steady as exports and inflation data indicate the economy is improving.
Here’s what investors are watching:
- JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. report Thursday in the U.S., kicking off an earnings season for big banks that will focus on net interest margins, credit trends and trading.