Asian Stocks Mostly Weaker, N Korea Missile Test Weighs
- Most Asian stock indexes slipped on Tuesday
- News of another North Korea missile test sent investors toward assets perceived as safer
- The Reserve Bank of Australia declined to please those who had bought the Australian Dollar expecting a hawkish tone shift.
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Asian markets were subdued Tuesday as the US Independence Day Holiday loomed and North Korea reportedly test-fired yet another large missile which may have landed in Japan’s “exclusive economic zone.”
As trade wrapped up for the day there were reports that the weapon tested was of a longer-ranged class than had been seen before.
At any rate the Nikkei 225 ended down 0.1% with most other Asian bourses in the red. The ASX 200 was the standout gainer, rising quite sharply when it became clear that the Reserve Bank of Australia was not about to start ratcheting up the hawkish monetary policy rhetoric even though other-developed market central banks have done so. The RBA left interest rates on hold at their 1.50% record low, as was almost universally expected. However it also left its statement firmly neutral, knocking the Australian Dollar which had clearly attracted buyers beforehand on hopes of a change. The US Dollar slipped against a basket of its major, traded rivals, with the Japanese Yen finding buyers on that North Korean news.
Crude oil prices fell back in Asia after a rare eight consecutive days of gains which came in turn on signs that US production may be peaking. Gold prices edged higher but remain close to seven-week lows.
The rest of the day is predictably light on US economic news but there are one or two dishes on the economic table. First up will be the UK’s Purchasing Managers Index for the construction sector. Eurozone producer price data are also due, as is Canada’s manufacturing PMI.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.