Investors in Australia and Japan are on edge as they await the U.S. Federal Reserve’s decision on interest rates, scheduled for early Thursday in Asia.
In particular, they are closely monitoring the yen’s performance, which experienced volatility at the start of the week due to suspected intervention on Monday. Currently, the currency is trading around the 157.7 level against the U.S. dollar.
Most Asian markets are closed on Wednesday for the Labor Day holiday.
Meanwhile, in the U.S., all three major indexes experienced declines following the release of higher-than-expected wage data, sparking fresh concerns about inflation ahead of the Federal Reserve’s rate decision. The Labor Department reported that the employment cost index rose 1.2% in the first quarter, surpassing economists’ consensus estimate of 1%.
Tech giant Microsoft made headlines by announcing its plans to establish its first regional data center in Thailand. The company also pledged to invest in new cloud and AI infrastructure in the country and provide AI skilling opportunities for over 100,000 individuals.
In Japan, trading house Mitsui and Co reported a 6.4% decline in profit for its 2023 financial year, despite which its shares saw a 1.23% increase following the announcement of a 200 billion yen share buyback.
Oil prices continued their downward trend for the third consecutive day, with Brent contracts sliding 0.88% and U.S. West Texas Intermediate crude experiencing a larger loss of 1.03%. This decline was attributed to rising U.S. inventories and optimism surrounding a potential ceasefire agreement in the Middle East.
Additionally, the sudden strengthening of the yen on Monday was reportedly due to intervention by Japanese authorities, according to Reuters. Money market data indicated a significant net receipt of funds, suggesting intervention by the central bank.
In South Korea, imports increased by 5.4%, falling short of expectations, leading to a narrowing of the country’s trade balance.
Looking ahead, biotech stocks are expected to perform well, especially with expectations of a rate cut in September. Meanwhile, only two European stocks have consistently surpassed market expectations for the past five quarters, according to CNBC Pro analysis.
Finally, stocks linked to the price of bitcoin experienced declines alongside the cryptocurrency itself, with companies like Coinbase and MicroStrategy reporting losses for the first quarter.
