Global shares rose on Wednesday, nudged higher by a rally in Japanese stocks as the yen sagged to its weakest since 1990, while the dollar held mostly steady in a holiday-shortened week that ends with a key reading on U.S. inflation. The yen, which has lost more than 7% in value against the dollar this year already, weakened to as far as 151.975 to the dollar, prompting Japan's three main monetary authorities to hold an emergency meeting on Wednesday to discuss the currency. Advertisement · Scroll to continue
Market participants took this as a signal officials were ready to intervene in the market to stop what they described as disorderly and speculative moves in the yen.
The yen has been sliding despite the Bank of Japan's first interest rate hike for 17 years last week, as traders expect very gradual tightening and possible delays to long-expected Federal Reserve easing. BOJ board member Naoki Tamura reinforced the dovish outlook regarding further tightening on Wednesday, saying the central bank should
The Nikkei (.N225), opens new tab closed up 0.9%, although equities trading elsewhere was more subdued. The MSCI All-World index (.MIWD00000PUS), opens new tab was flat on the day, while Europe's STOXX 600 index edged up 0.1%. S&P 500 and Nasdaq futures , were up 0.3% and 0.4% on the day, respectively.
"It's choppy, directionless trading, and there's a good reason for that: we've hit that time of the quarter when rebalancing flows are impacting the market," said Tony Sycamore, a strategist at IG. Still, stocks have been on a bull run, with the three major indexes hitting record highs last week.
Another reason is that two key events - the release of the U.S. Federal Reserve's favoured inflation indicator and public comments from Fed Chair Jerome Powell - come on Friday, when most markets are closed for a holiday, he added.
Inflation data "have not been doing what's expected", and in the event of a hot reading, "the bumpy road that the Fed has been talking about suddenly starts to look more like a mountain trek", Sycamore said.
The U.S. dollar index , which measures the currency against six others, including the yen, was 0.1% higher at 104.41, just below Friday's five-week high of 104.49.
The dollar was last down 0.2% at 151.26 yen "If there's any kind of intervention, it only has a significant lasting impact if the direction of travel has already begun to turn," Guy Miller, chief market strategist at Zurich Insurance Group, said.
"We've seen intervention in many countries over the years, but usually, while that can work in the very short term, you need to see the currency itself fundamentally change direction, and then policy intervention can reinforce that or exacerbate the move," he said. The euro was down 0.1% at $1.0817, while sterling eased 0.1% to $1.2615.
U.S. long-term Treasury yields were stable at 4.2198%.
Traders are trying to gauge which of the big central banks - the Fed, ECB or Bank of England - will be first to cut rates this year.
Meanwhile, Sweden's Riksbank left interest rates unchanged but indicated it was likely to start easing monetary policy in either May or June. Gold rose 0.4% to $2,185 an ounce, as it continued to search for a short-term floor following its surge to a record $2,222.39 last week.Cryptocurrency bitcoin eased 0.45% to $70,155.
Oil fell for a second day after a report that crude stockpiles surged in the U.S., the world's biggest oil user, and on signs major producers are unlikely to change their output policy at a technical meeting next week.
Brent crude futures for May fell 0.7% to $85.66 a barrel. The May contract is set to expire on Thursday and the more actively traded June contract eased 0.6% to $85.13.
