Asia Stocks, Yen Swing After Tokyo Vote; Oil Gains: Markets Wrap – Bloomberg

This post was originally published on this site

Asian stocks fluctuated with the yen in the wake of a crushing defeat of Japanese Prime Minister Shinzo Abe’s party in Tokyo elections. Oil climbed for an eighth day.

Japan’s Topix index erased an earlier advance while the yen swung between gains and losses. South Korean equities were slightly higher while Australian shares edged lower. Futures on the S&P 500 Index climbed as trading gets under way in a shortened holiday week that culminates with Friday’s jobs report.

With global equities trading near a record high on bets of improving growth, stocks continue to be one of the best-performing assets this year, with emerging-market shares soaring in the first six months of 2017. History shows the dollar may be in for more pain after its worst start to a year since 2006, while the euro remains the strongest major currency this year on bets a recovery is broadening.

Central banks stole the limelight last week as a more hawkish tilt spurred some reassessment from investors on policy steps. Attention now turns to a swathe of manufacturing reports. China data is due after a confidence among Japan’s large manufacturers improved for a third straight quarter.

Exit polls indicated the Liberal Democratic Party will probably win the fewest ever seats in the Tokyo assembly, adding to pressure on Abe, who’s been hit by a spate of scandals, and spurring speculation he may reshuffle his Cabinet. Haruhiko Kuroda shouldn’t serve another term as governor of the Bank of Japan because the central bank will need fresh ideas as it moves toward exiting years of unprecedented monetary easing, according to an adviser to the prime minister.

CLSA’s Nicholas Smith discusses Tokyo election.

Source: Bloomberg

Read our Markets Live blog here.

Here are some key upcoming events:

  • China’s bond-connect program with Hong Kong, giving offshore investors another way to access the mainland’s debt market, will start on Monday. More on that here.
  • China’s Caixin June factory PMI is forecast to rebound. 
  • Other data due this week: Asean PMIs, inflation for Indonesia, the Philippines and Thailand. The Australian and Thai central banks will probably maintain interest rates at current levels, according to analysts surveyed by Bloomberg.
  • China President Xi Jinping visits Russia and Germany.

Here are the main moves in markets:

  • The yen gained 0.1 percent to 112.23 per dollar as of 9:48 a.m. in Tokyo, after erasing an earlier advance of as much as 0.4 percent. 
  • Futures on the S&P 500 advanced 0.2 percent after the underlying gauge rose 0.2 percent on Friday to round out its worst week since April.
  • Japan’s Topix index was flat after rising as much as 0.2 percent. South Korea’s Kospi index added less than 0.1 percent and Australia’s S&P/ASX 200 Index fell 0.2 percent.
  • The yield on 10-year Treasuries rose one basis points, adding to a 16-basis point surge last week to 2.30 percent, the steepest such increase since March.
  • Crude rose 0.4 percent in early trading Monday.