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Caution Abates in Asia as Yen Drops, Stocks Rise

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Caution during U.S. trading hours abated in Asia as the yen weakened and stocks climbed.

The most important market news of the day.

Japan’s Topix index recovered some of this week’s slide, as the yen dropped for the first time in nine days. U.S. stock futures gained after Republicans said the House was ready to vote on an amended health-care bill. The S&P 500 Index had a turbulent Thursday after a delay on the vote raised speculation President Donald Trump may struggle with other policies. Oil pared its weekly loss while gold trimmed its gain for the week.

“The market is getting a little ahead of itself when it doesn’t know whether the health-care bill will pass,” said Ayako Sera, a market strategist with Sumitomo Mitsui Trust Bank Ltd. in Tokyo. “It’s a little hard to understand why there’s so much expectation when we still have to wait to see how things turn out tonight.”

Reflation trades sparked by Trump’s election have faltered in March as the administration remains far from delivering on pro-growth policies that boosted stocks and the dollar. A stronger yen this week has weighed on equities in Tokyo, while emerging-market assets have advanced since the U.S. raised interest rates last week.

“We’re not throwing in the towel — certainly not — we’re still seeing a lot of opportunities in equities,” said Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7 billion. “You’ve got to be conscious of a short-term hiccup, but that would be an opportunity to do some more buying. There’s clear signs of a cyclical pick up in the economic data and you’ve still got investors wanting to get more growth assets on board.”

What’s ahead for investors:

More Fed officials are lined up for Friday, including Fed Bank of St. Louis President James Bullard, who will speak to the Economic Club of Memphis.

A U.S. report on orders for durable goods is scheduled for Friday, with expectations for a second straight monthly gain, indicating business investment is picking up.

Leaders from European Union countries except the U.K. meet Saturday on the 60th anniversary of the bloc’s founding Treaty of Rome to discuss the way forward after Brexit. Meanwhile, representatives from five OPEC and non-OPEC members gather for a meeting of the Joint Ministerial Monitoring Committee to oversee oil production cuts.

Here are the main moves in markets:

Currencies

The yen lost 0.4 percent to 111.37 per dollar as of 2:43 p.m. in Tokyo after eight days of gains. The Bloomberg Dollar Spot Index rose 0.2 percent.

The British pound fell 0.3 percent, as did the New Zealand dollar, while the euro and Australian dollar both fell 0.2 percent.

Stocks

The Topix index rose 0.9 percent, paring this week’s loss to 1.5 percent. The Nikkei 225 also gained 0.9 percent. Australia’s S&P/ASX 200 Index climbed 0.8 percent and South Korea’s Kospi index slipped 0.2 percent.

The Hang Seng Index dropped 0.2 percent while Chinese shares traded in Hong Kong lost 0.4 percent.

Futures on the S&P 500 climbed 0.2 percent. The index fell 0.1 percent on Thursday, while the Stoxx Europe 600 Index added 0.9 percent.

The MSCI Emerging Markets Index dropped 0.1 percent. The gauge has gained nine times in the past 11 days.

Bonds

The yield on Australian 10-year government bonds was little changed at 2.75 percent.

Benchmark Treasury yields added one basis point to 2.43 percent.

Commodities

Oil advanced 0.5 percent to $47.90 a barrel, paring its weekly loss to 2.8 percent.

Gold fell 0.2 percent to $1,243.30, trimming the week’s gain to 1.2 percent.

Source: Bloomberg