Asia mixed as rally loses steam, Yen recovers

The rally in risk assets faded on Thursday, with Asian stock indexes trading mixed and the yen recovering, as concerns about rising US-China tensions offset signs of a better-than-expected start to the earnings season. The dollar and Treasuries steadied.

While shares rose in Japan, gains fizzled in Hong Kong and China, and US and European futures declined.

News of US prosecutors investigating Huawei Technologies for allegedly stealing trade secrets weighed on sentiment despite strong profits at Goldman Sachs and Bank of America that buoyed the S&P 500 Index Wednesday.

The pound was steady after Prime Minister Theresa May’s government won a no-confidence vote, as widely expected.

Risk assets have been strong in January as optimism about central bank support overshadows a litany of concerns as the global economy slows. Bank of America’s Chief Financial Officer Paul Donofrio further reassured investors, saying on an earnings call that he’d seen nothing to suggest an economic slowdown is imminent.

Fears of a US recession by 2020 had already been fading, with the bond market paring back those expectations.

"The first quarter is all about relief rallies, that things aren’t as bad as what was priced in," Binky Chadha, a global strategist at Deutsche Bank, told Bloomberg TV in New York.

Elsewhere, oil traded lower, though US crude remained close to $52 a barrel.

Here are some key events coming up:

Earnings season rolls on with Morgan Stanley, Netflix and Taiwan Semiconductor posting results.

Bank Indonesia will probably hold its benchmark at 6% Thursday, according to all economists surveyed by Bloomberg.

Bank of Japan Governor Haruhiko Kuroda and Deputy Governor Masayoshi Amamiya speak at a G-20 event in Tokyo.

Data on US jobless claims and industrial production are due.

These are the main moves in markets:

Stocks

Japan’s Topix index rose 0.4% at the 15:00 close in Tokyo. Hong Kong’s Hang Seng slid 0.1% after rising as much as 0.4%.

 The Shanghai Composite Index dropped 0.1%. The MSCI Asia Pacific Index added 0.1% to the highest since December 5.

Futures on the S&P 500 dipped 0.3%. The S&P 500 Index climbed 0.2% Wednesday. Euro Stoxx 50 futures declined 0.3%.

Currencies

The yen rose 0.2% to 108.91 per dollar. The offshore yuan was down 0.1% to 6.7706 per dollar. The euro bought $1.1388. The pound slid 0.1% to $1.28750.

Bonds

The yield on 10-year Treasuries dipped one basis point to 2.71%. Australia’s 10-year bond yield rose two basis points to 2.29%.

Commodities

West Texas Intermediate crude slipped 0.5% to $52.04 a barrel. Gold edged lower at $1 291.65 an ounce.

ZAR/USD
17.07
(-0.54)
ZAR/GBP
21.47
(-1.21)
ZAR/EUR
19.27
(-0.37)
ZAR/AUD
11.90
(-0.51)
ZAR/JPY
0.16
(-0.35)
Gold
1794.06
(+0.52)
Silver
18.28
(+0.12)
Platinum
835.00
(+1.89)
Brent Crude
43.07
(+0.70)
Palladium
1918.00
(+0.03)
All Share
55267.15
(+0.77)
Top 40
50922.32
(+0.83)
Financial 15
10086.99
(-0.47)
Industrial 25
76855.87
(+0.55)
Resource 10
52017.34
(+1.71)
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