Japan’s Nikkei share average pared early gains and ended flat on Monday as investors took profits after a Wall Street-inspired rise.
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US stock prices marked four straight weeks of gains last week, with the S&P 500 .SPX setting record highs, supported by renewed strength in the tech and telecom sectors and a stronger-than-expected report on manufacturing.
The S&P 500 Index swung back to gains Friday, rallying to a fresh all-time high amid signs of strength in the United States economy and speculation central banks globally will act to cushion any blow from the UK’s Brexit vote.
However, market turmoil at the start of the year, an uncertain global outlook and the Brexit vote have dented the chances of any more moves in 2016, although the possibility is back on the table after a slew of strong USA data in recent weeks. “Globally there remain risks, such as European financial institutions or the Chinese yuan”, said Koichi Yoshikawa, executive director of finance at Standard Chartered Bank in Tokyo. Positive U.S. company activity data out on Friday likewise added to prospects of a near-term Federal Reserve interest rate hike and supported the greenback.
While the Fed is widely expected to stand pat on monetary policy, investors will be sifting through its statements for the merest hint of a near-term rate increase following recently firm US economic indicators that have revived tightening expectations.
On currency markets, the dollar rose to 106.59 yen from 106.19 yen Friday in NY.
The euro also gained to 116.65 yen from 116.55 yen in U.S. trade, although it edged down to $1.0972 from $1.0976. The pound attempted a rebound as gold slipped 0.1 percent to $1,321.08 an ounce, falling with palladium.
Futures on the S&P 500 were little changed at 2,167.25 following the benchmark’s 0.5 percent advance last session to a record 2,175.03.
The yen traded weaker in Asia on Monday with trade data showing better than expected figures though exports and imports declined notably ahead of a week that will see the Fed and the Bank of Japan comment on monetary policy.
Kuroda also dismissed speculations about “helicopter money” – essentially printing money and distributing payouts -, saying it would be prohibited by law if it meant the BOJ directly underwriting government debt, said Reuters.
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Oil prices hovered near 2-1/2-month lows after having lost about 4 percent last week on renewed worries about a global crude glut. Futures on the Hang Seng China Enterprises Index and the FTSE China A50 Index rose by at least 0.3 percent in most recent trade.
