European stocks slipped, with oil and gas shares leading losses after BP Plc’s profit missed estimates. Japan’s yen surged to the strongest level in more than a week against the dollar as investors looked for signals on the magnitude of any economic stimulus, while the British pound fell.

BP fell as much as 2.6 percent in early London trading, the biggest drag on the Stoxx Europe 600 Index. The yen rose against all major peers, extending gains after Finance Minister Taro Aso said the government has yet to decide on the size of a fiscal spending package. That sent Japanese equities to a 1.4 percent loss, and a gauge of the dollar’s strength headed for its biggest decline in almost a month. Stocks across the rest of Asia rallied, while U.S. crude steadied near $43 a barrel. Sterling slid on a report that Bank of England policy maker Martin Weale now favors immediate stimulus for the U.K. economy.

While the Federal Reserve will probably keep key borrowing costs on hold this week, economists expect the Bank of Japan to ease policy. Investors are also awaiting details of what Prime Minister Shinzo Abe’s government will do to buoy faltering growth, with decisions on that expected next week, and watching earnings reports from around the world to gauge the health of the global economy.

“There seems to be a lot of indecision with the policy makers in Tokyo and that’s what the concern is right now,” said Stephen Innes, a senior trader at Oanda Corp. in Singapore. “The market’s going to be trading very nervously.”

Currencies

The yen strengthened 1.5 percent to 104.27 per dollar as of 8:16 a.m. in London, extending a 0.3 percent climb from last session. The rebound comes after the currency weakened to a one-month low of 107.49 on July 21. Aso also said Tuesday that monetary policy decisions are in the BOJ’s hands.

“The yen’s recent weakness against the dollar has been based on the idea that both the government and the BOJ would come up with measures to stimulate the economy,” said Takuya Iwasaki, executive general manager of foreign-exchange sales at Bank of America in Tokyo. “What Aso said may have reduced expectations for action from the BOJ a bit.”

The Bloomberg Dollar Spot Index slid 0.4 percent. The Aussie and kiwi rose at least 0.6 percent versus the U.S. currency, while the euro added 0.1 percent.

Sterling weakened 0.5 percent to $1.3076. Weale, an independent member of the Monetary Policy Committee, has changed his mind on the timing of stimulus and now favors immediate support after purchasing managers’ indexes released Friday were a lot worse than he had thought, the Financial Times reported.

Stocks

The Stoxx 600 declined 0.3 percent amid thin trading volume. BP Plc, the first oil major to provide second-quarter results, said earnings fell 45 percent. Orange SA, which also reported results, declined 1.7 percent. In Asia, Sands China Ltd. jumped 6.4 percent in Hong Kong as JPMorgan Chase & Co. said the casino operator’s second-quarter figures were better than the bank had expected.

Sands China’s results buoyed gaming stocks from Wynn Macau Ltd. to MGM China Holdings Ltd., with the industry accounting for the five biggest gains on the MSCI Hong Kong Index. The share gauge rose 1 percent.

“Earnings have been surprising on the upside, but the expectations were very low,” Thomas Poullaouec, head of strategy and research for the Asia-Pacific investment solutions group at State Street Global Advisors, said on Bloomberg Television.

The Topix index posted its steepest one-day decline since July 6 in Tokyo as exporters sank on the stronger yen. The MSCI Asia Pacific Index added 0.4 percent, swinging from an early loss.

Futures on the S&P 500 Index were little changed after the measure retreated from a record on Monday.

Commodities

West Texas Intermediate crude rose 0.1 percent to $43.17 a barrel after sliding 4 percent over the past three sessions.

Energy analysts polled by Bloomberg expect government data to show a 2.25 million-barrel drop in U.S. oil stockpiles, a 10th weekly decrease, while gasoline inventories probably rose by 600,000 barrels.

“You can’t ignore the size of the inventory overhang,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by phone. “The fundamentals don’t support a move up through $55 to $60 a barrel, but we’re not seeing a capitulation like we did at the start of the year.”

Gold for immediate delivery added 0.4 percent to $1,320.54 an ounce.

Bonds

Yields on 10-year Treasury notes fell for the first time in three days, with rates down by three basis points, or 0.03 percentage point, to 1.54 percent.

In Japan, similar maturity debt fell 0.5 basis points to minus 0.245 percent, while yields on Australian government bonds due in a decade held at 1.92 percent.

Source: Bloomberg