Asian Stocks Wilt Following Big US Declines, Yields Boost USD
- Asian stocks were all in the red
- Big US drops the session before didn’t help, nor did worries about iPhone sales in a region full of suppliers
- The US Dollar held up thanks to rising yields
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Asian stocks took a broad knock Tuesday, reacting in kind to Wall Street weakness the session before. The year’s biggest falls there so far came on worries that higher US interest rates would threaten economic recovery.
The Nikkei 225 fell 1.4%, with falls of the order of 1% common around the region more boradly. Technology names were lower on their own account, hit by a report on a reduction in iPhone X production from Apple which knocked its suppliers.
The US Dollar was steady against a basket of currencies after moving up Monday- on higher US bond yields- as markets looked ahead to possible rate rises this year. The Japanese Yen weakened as the official Japanese jobless rate ticked back up to the 2.8% level which in truth has been about its average for the past twelve months. A mixed set of spending data probably left policy makers at the Bank of Japan little wiser about consumer intentions. Australian business confidence moved up sharply in December according to National Australia Bank’s monthly snapshot but the Aussie Dollar didn’t move much on it.
Still to come in the remainder of global Tuesday are Eurozone Gross Domestic Product data and UK public borrowing numbers. On their heels will come Case Shiller home price figures out the US and the Conference Board’s January snapshot. On the central-banking front, Bank of England Governor Mark Carney will make one of his regular appear before lawmakers in London.
--- 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.