Feb 29 2024: Asian equities showed mixed performance on Thursday, while the dollar and U.S. Treasuries remained relatively stable in anticipation of crucial U.S. inflation figures, which could offer insights into the Federal Reserve’s interest rate decisions.
Chinese stocks rebounded from previous losses, poised to record their best month since November 2022, despite broader market weakness in the region.
The yen strengthened following remarks from a Bank of Japan official suggesting a potential exit from ultra-easy monetary stimulus measures.
Cryptocurrency bitcoin hovered around $61,400, after experiencing a three-day surge that propelled it to its highest level in over two years at $63,933.
Wall Street futures indicated marginal declines, following a downtrend in all three major indexes overnight, with S&P 500 futures down 0.04% and Nasdaq futures declining 0.06%.
Investor caution prevailed ahead of the release of the Fed’s preferred inflation gauge, the Personal Consumer Expenditures (PCE) price index, later in the day. Expectations for the timing of the first rate cut have shifted from March to June, influencing market sentiment.
Japan’s Nikkei share average slipped 0.45%, retracing slightly from its record peak reached earlier in the week, while South Korea’s Kospi declined by 0.54%. Benchmarks in Taiwan and Australia remained flat.
In contrast, mainland Chinese blue chips surged by 0.82%, recovering from the previous session’s slide. For the month, they are up by 8.3%, likely to break a six-month streak of declines.
Anticipation of more aggressive stimulus measures to support the economy has been driving the recent market momentum in China.
Hong Kong’s Hang Seng added 0.44%, contributing to the mixed performance of the broader Asia-Pacific region, which edged 0.06% higher, as reflected by MSCI’s index.
The U.S. dollar index, which measures the currency against major peers, including the yen, euro, and sterling, edged 0.06% lower to 103.86. The yen’s gains were notable after BOJ board member Hajime Takata hinted at the need for flexible policy responses, potentially ending measures like negative interest rates and yield curve control.
The dollar dropped by 0.52% against the yen, slipping below the closely watched 150 line for the first time in over a week. The euro and sterling remained relatively unchanged.
Benchmark U.S. 10-year Treasury yields remained stable at around 4.28%.
Bitcoin rose by 1.5% to $61,477, nearing its all-time high of $68,999.99, supported by ongoing speculative trading activity.
In commodity markets, oil prices eased due to concerns about sluggish demand following a larger-than-expected build in U.S. crude stockpiles. Brent crude futures fell by 0.3% to $83.46 a barrel, while U.S. West Texas Intermediate crude futures declined by 0.4% to $78.24 a barrel.