Asian stocks fell as investors were reluctant to add big positions ahead of key events looming in Europe and the U.S. The yen erased losses on a Bank of Japan report, while oil nudged higher.
The Japanese currency strengthened, weighing on the Topix index, on a report that the BOJ is re-calibrating its communications over how to handle a future exit from monetary stimulus. Oil recovered a small portion of the more than 5 percent plunge triggered by a report showing a rise in U.S. crude stockpiles. The MSCI Asia Pacific Index fell before the European Central Bank’s policy decision, the U.K. election and former FBI Director James Comey’s testimony. Hong Kong shares held gains as data showed an acceleration in Chinese exports.
A pivotal day for capital markets on Thursday comes as renowned bond investor Bill Gross said levels of risk in markets are at the highest since before the 2008 financial crisis. Equity investors have been prepared to place their faith in an expanding global recovery, while fixed-income money managers have dialed back inflation expectations in the U.S.
Read our Markets Live blog here.
Here are some of the key upcoming events:
The ECB’s policy decision is followed by Mario Draghi’s address to reporters later in the day. Don’t expect policy changes, but the central bank may drop the reference to “downside” risks to growth, while reiterating a weak inflation outlook, Bloomberg Intelligence said.
Investors are awaiting results from the U.K. elections. The polls close at 10 p.m. Thursday night in the U.K.
Comey released prepared testimony saying the president asked him to end an investigation into the former national security adviser.
Here are the main moves in markets:
The Bloomberg Dollar Spot Index was flat as of 2:53 p.m. in Tokyo.
The yen climbed 0.3 percent to 109.47 per dollar after falling 0.4 percent Wednesday. The BOJ is re-calibrating its communications to acknowledge that it is thinking about how to handle a future exit from monetary stimulus, without giving the impression that this is on the agenda anytime soon, according to people with knowledge of discussions at the central bank.
The pound was little changed at $1.2959, after climbing for four straight days.
The Aussie dollar was flat after a report showed a weaker-than-expected trade balance.
The MSCI Asia Pacific Index fell 0.2 percent. The Topix lost 0.4 percent after the yen strengthened. Data earlier in the day showed Japan’s economy grew less than the government initially reported for the first quarter.
Hong Kong’s Hang Seng rose 0.2 percent and the Shanghai Composite Index increased less than 0.1 percent. China’s exports rose 8.7 percent in May in dollar terms, above estimates for a 7.2 percent gain, as global demand shows signs of picking up.
South Korea’s Kospi index was little changed, after erasing an earlier loss. North Korea launched a series of short-range missiles early Thursday that appeared to be designed to attack ships, the latest provocation by Kim Jong Un’s isolated regime.
Futures on the S&P 500 added less than 0.1 percent after the underlying gauge added 0.2 percent on Wednesday.
WTI crude added 0.5 percent to $45.94 a barrel. Oil lost more than 5 percent Wednesday after an unexpected increase in U.S. crude and gasoline stockpiles stoked fears that the global supply glut will remain unabated.
Gold advanced 0.1 percent to $1,287.99 an ounce, after dropping 0.6 percent in the previous session.
The yield on 10-year Treasuries rose less than one basis point to 2.18 percent.
Australian government notes with a similar maturity saw yields rise three basis points to 2.41 percent.