European and US markets drifted higher Tuesday with dealers on tenterhooks on the first day of key monetary policy meetings for the US Federal Reserve and Bank of Japan.
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Japan’s Nikkei stock index erased earlier losses and added 0.1%, as trading resumed after a public holiday on Monday.
The yen extended its gains in Asian trading Tuesday as the Japanese and United States central banks kick off their latest policy meetings.
Korea’s Kospi closed up 0.49% to 2,025.71, while the Hang Seng Index in Hong Kong finished nearly flat, losing 0.08% to 23,530.86.
Futures on Hong Kong’s Hang Seng Index signaled an increase of 0.1 percent with those on the FTSE China A50 Index, while contracts on the Hang Seng China Enterprises Index gained 0.3 percent.
The dollar index rose 0.2 percent (.DXY) to 95.995, just below the 96.108 mark touched on Friday that was the highest since September 1.
The Fed is expected to leave its benchmark overnight interest rate unchanged following its two-day meeting on Wednesday, according to a Reuters poll of economists.
On the whole, investors were nervously waiting on the outcomes of the Federal Reserve and Bank of Japan policy meetings that begin later in the session.
The expected reduction in the longer-run neutral rate forecast amounts to a lower speed limit on future rate hikes, and points to fewer increases with longer gaps between them than USA central bankers and investors had expected.
WALL STREET: The Dow Jones industrial average dipped 3.63 points, or less than 0.1 percent, to 18,120.17. The Standard & Poor’s 500 index lost 0.04 points to 2,139.12. The Nasdaq composite picked up 14 points, or 0.3 percent, to 5,249.
ENERGY: Benchmark U.S. crude rose 43 cents, or 1 percent, to $43.73 a barrel in NY.
US oil prices rose slightly, lifted by hopes the planned restart of the country’s main gasoline pipeline after a leak more than a week ago will boost demand, while Brent slipped. The dollar has fallen against the six major currencies that make up its basket in three of the past four sessions, but had its largest one-day percentage gain since late July on Friday. Yet the rise in the 10-year Treasury yield in recent weeks, even amid a string of disappointing data, suggests investors are increasingly on guard for this scenario. Its stock rose $15.46, or 22.3 percent, to $84.80 and Avnet gained $2.68, or 6.8 percent, to $41.89. Apple, which surged last week and reached its highest price this year, lost $1.34, or 1.2 percent, to $113.58 and Intel fell 51 cents, or 1.4 percent, to $37.16. Sydney added 0.2 percent and Seoul was 0.5 percent higher, while Singapore shed 0.2 percent.
“It looks like housing is taking a bit of a breather in the short term”, Jacob Oubina, senior USA economist at RBC Capital Markets in NY, told Bloomberg.
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But several of them said changes to the BOJ’s stimulus program, such as buying more Japanese government bonds, adjusting the maturities of bonds eligible for purchase, boosting spending on commercial paper, corporate debt and exchange traded funds, were also likely. The euro rose to $1.1178 from $1.1151.
