Asian Stocks Mixed After Wall Street's Best Week - AP News

Bangkok, Aug 19 (AP) Asian stocks were mixed Monday as investors ponder the upcoming meeting of the Federal Reserve, following Wall Street's best week since November with a slight uptick in US stocks Friday.

US futures were higher while oil prices dropped.

Japan's benchmark index fluctuated in morning trading. The Nikkei 225 shed 15.50 points to 38,047.17 after data showed the core machinery orders, which are used as a leading indicator of capital spending in the coming six to nine months, fell 1.7 per cent year on year in June.

The US dollar fell to 146.44 Japanese yen from 147.58 yen.

Last week, better-than-expected US retail sales figures boosted market confidence and shifted sentiment regarding potential interest rate cuts by the Federal Reserve in September, which could trigger a sell-off of the yen against the dollar and other major currencies. But still, the dollar-yen exchange rate has been on a downward trend over the past weeks.

“The recent turmoil in the foreign exchange market isn't just about the Bank of Japan's actions ... other factors, like signals from the Federal Reserve about possible rate cuts, weak US job market data, and broader global economic uncertainties, have also contributed to the recent turbulence,” Luca Santos, currency analyst at ACY Securities, said in a commentary.

The market's focus is on Jackson Hole, Wyoming, where Federal Reserve Chair Jerome Powell will give a speech late in the week and the setting has been home to big policy announcements in the past.

Because the Fed has said its upcoming moves will depend in large part on what data reports at the time say, “it will be difficult for Powell to pre-commit to a particular trajectory at Jackson Hole,” said economists at Deutsche Bank led by Matthew Luzzetti.

But Powell could offer hints about whether the Fed is hoping to merely remove the brakes from the economy through rate cuts or give it an accelerant.

Elsewhere in Asia, Australia's S&P/ASX 200 rose 0.2 per cent to 7,988.00 and the Kospi in Seoul lost 0.2 per cent to 2,690.83. Hong Kong's Hang Seng added 1 per cent to 17,611.77, while the Shanghai Composite was up 0.5 per cent to 2,894.57.

Bangkok's SET increased 0.8 per cent after data showed the country's gross domestic product in the second quarter increased 2.3 per cent compared to a year earlier, driven by tourism.

On Friday, the S&P 500 rose 0.2 per cent to 5,554.25 for a seventh straight gain and pulled back within 2 per cent of its all-time high set last month. The Dow Jones Industrial Average gained 0.2 per cent to 40,659.76, and the Nasdaq composite added 0.2 per cent to 17,631.72.

Treasury yields eased in the bond market following mixed reports on the US economy. One showed homebuilders broke ground on fewer projects last month than forecast, which threw some cold water on the market. Optimism had been rising earlier in the week following a flurry of better-than-expected reports on everything from inflation to sales at US retailers.

But a report later in the morning suggested US consumers are feeling better about the economy than expected. That's a big deal for Wall Street because their spending makes up the bulk of the economy.

Even though confidence rose in the economy's strength following the strong run of reports, it is still likely slowing under the weight of high interest rates.

The question is whether the slowdown in growth will overshoot and become a recession. The hope on Wall Street is that an expected cut to interest rates at the Fed's next meeting in September will help forestall that.

In the bond market, the yield on the 10-year Treasury fell to 3.88 per cent from 3.92 per cent late Thursday. The two-year yield, which more closely tracks expectations for Fed action, fell to 4.05 per cent from 4.10 per cent late Thursday.

In energy trading, benchmark US crude gave up 16 cents to USD 75.38 a barrel. Brent crude, the international standard, lost 15 cents to USD 79.53 a barrel.

The euro has been strengthening against the US dollar. On Monday, it cost USD 1.1040, inching up from USD 1.1028.