BLBG:Dollar Declines With Metals, Oil as Australian Dollar Advances
The dollar touched a one-month low against the yen amid speculation the Federal Reserve will maintain stimulus and ahead of a two-day Bank of Japan meeting. Metals and oil fell, while Australia’s dollar rose.
The greenback dropped 0.4 percent to 92.86 yen as of 7:49 a.m. in London after touching 92.57, the weakest since March 1. Euro Stoxx 50 Index (MXAP) futures and Standard & Poor’s 500 Index (SPXL1) contracts were little changed. The MSCI Asia Pacific Index swung between gains and losses. Copper in London tumbled 1.2 percent and oil slid 0.4 percent. South Korea’s won fell to a one-week low as North Korea said it will restart nuclear facilities. Australia’s currency gained 0.3 percent as the country’s central bank kept interest rates on hold.
Data today may show unemployment in the euro area climbed to a record 12 percent as markets in the region reopen after a four-day Easter break. Cyprus government officials will seek easier bailout terms with representatives of the European Union and International Monetary Fund. An April 5 report is forecast to show the U.S. jobless rate was 7.7 percent last month as the Fed pledged to keep interest rates low as long as unemployment holds above 6.5 percent.
“Investors are taking an air of caution given the stream of data that sends mixed signals,” Jonathan Ravelas, the chief market strategist at Manila-based BDO Unibank Inc. “There is no incentive to come in aggressively into the market.”
Asian Currencies
The yen strengthened against all but one of its 16 major peers before the first monetary decision due under Haruhiko Kuroda, the new Bank of Japan governor who has pledged to step up easing to defeat deflation and spur growth in the world’s third-biggest economy.
Japan’s currency climbed 0.3 percent to 119.42 per euro ahead of the two-day BOJ meeting which starts April 3. Prime Minister Shinzo Abe said today in parliament the BOJ shouldn’t pursue a 2 percent inflation target “at all costs” even as Kuroda said he aims to achieve the goal within two years.
South Korea’s won slid 0.3 percent to 1,117.98 per dollar, reversing a gain of as much as 0.4 percent, after North Korea said it will restart all facilities at its Yongbyon nuclear site. The nation’s Kospi Index sank 0.5 percent. Malaysia’s ringgit rose to a two-month high on speculation parliament may be dissolved as early as tomorrow.
Australia’s dollar rose against most of its 16 major peers after the Reserve Bank kept interest rates at 3 percent as forecast and refrained from indicating any prospect that a reduction may soon be needed. The currency traded at $1.0456. New Zealand’s dollar gained 0.4 percent to 84 U.S. cents.
Japanese Shares
The yield premium on 10-year U.S. Treasuries over similar- maturity Japanese government bonds slid to the least in a month, sapping the relative advantage of dollar-based assets.
Japanese shares retreated for a second day after global stocks beat all other investments for a second quarter, the first back-to-back outperformance since 2009. Japan’s Topix Index fell 0.9 percent, extending yesterday’s 3.3 percent slump which was the most since March 2011, as the yen’s strength damped earning prospects for exporters. The Nikkei 225 Stock Average slid 1.1 percent, paring its surge this year to 16 percent.
“Market participants are taking a breather following the recent rally amid extreme expectations the government will boost efforts to stimulate the Japanese economy,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd., which manages about $163 billion. “The yen’s depreciation was too fast so we’re seeing a bit of correction now. Japanese equities look fairly valued.”
Burelle, Glencore
In Europe, Burelle SA (BUR), which makes plastic products and street signage, may move after lifting its dividend by 10 percent to 4.4 euros per share. AstraZeneca Plc, the U.K.’s second-biggest drugmaker, may be active after JPMorgan Chase & Co. upgraded the stock to neutral. Glencore International Plc may move after trade was halted in Hong Kong earlier pending an announcement.
Copper for three-month delivery on the London Metal Exchange fell to $7,452.75 a metric ton after earlier trading as low as $7,440, the cheapest since Aug. 21. Nickel dropped 0.6 percent to $16,565 a ton. Aluminum, lead and zinc declined at least 0.3 percent. The bourse was shut yesterday and March 29.
Oil in New York slipped for a second day amid speculation U.S. inventories climbed to the highest level in more than 22 years. Futures retreated 0.4 percent to $96.72 a barrel.
Corn futures rose 0.6 percent to $6.4625 a bushel after dropping 23 percent from a record close in August as the U.S. government said stockpiles were bigger than forecast and acreage may climb to the highest since 1936. Wheat gained 0.7 percent and soybeans climbed 0.5 percent.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net
To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net
