Japan's Nikkei rises ahead of BOJ policy decision
The Nikkei rose 0.5 per cent to 40,842.88 by 0058 GMT. The broader Topix gained 0.4 per cent.
The BOJ is widely expected to keep interest rates steady at 0.5 per cent, but investors will search for hints in the policy statement and accompanying quarterly outlook report on when the central bank is likely to resume rate hikes.
The central bank's decision does not come at a specified time, but usually comes some time after 0200 GMT, with Governor Kazuo Ueda giving a press conference from 0630 GMT.
Traders have firmed up bets for the BOJ to resume raising rates from as early as October since Tokyo reached a long-awaited trade agreement with Washington earlier this month, removing a degree of uncertainty from the economic outlook.
"A hike by the end of the year is becoming more priced by markets," Tapas Strickland, head of market economics at National Australia Bank, said in a podcast.
"If that tentative trade deal with the US holds, then that should provide a little bit more confidence for the economy, just given where inflationary pressures are at the moment."
On Thursday, shares of companies that benefit from a drop in copper prices outperformed, with Fujikura and Furukawa Elecric each rallying about 6 per cent.
Earnings also lifted some stocks, with Kyocera jumping 8.4 per cent, while Nissan Motor rose more than 3 per cent.
At the other end, Panasonic Holdings slumped 3.5 per cent, and chip-testing equipment maker Advantest lost 2.4 per cent, extending declines to a fourth straight session.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Free Malaysia Today
a day ago
- Free Malaysia Today
Stocks cheer Trump's trade deals after EU agreement
Europe accepted the 15% US tariff as better than the threatened 30%, though it fell short of hopes for zero tariffs. (EPA Images pic) SINGAPORE : Global stocks rose and the euro firmed on Monday after a trade agreement between the US and the EU lifted sentiment and provided clarity in a pivotal week headlined by the Federal Reserve and the Bank of Japan policy meetings. The US struck a framework trade agreement with the European Union, imposing a 15% import tariff on most EU goods – half the threatened rate, a week after agreeing to a trade deal with Japan that lowered tariffs on auto imports. Countries are scrambling to finalise trade deals ahead of the Aug 1 deadline, with talks between the US and China set for Monday in Stockholm amid expectation of another 90-day extension to the truce between the top two economies. 'A 15% tariff on European goods, forced purchases of US energy and military equipment and zero tariff retaliation by Europe, that's not negotiation, that's the art of the deal,' said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. 'A big win for the US.' S&P 500 futures rose 0.4% and the Nasdaq futures gained 0.5% while the euro firmed across the board, rising against the dollar, sterling and yen. European futures surged nearly 1%. In Asia, Japan's Nikkei slipped after touching a one-year high last week while MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.27%, just shy of the almost four-year high it touched last week. While the baseline 15% tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal, it is better than the threatened 30% rate. The deal with the EU provides clarity to companies and averts a bigger trade war between the two allies that account for almost a third of global trade. 'Putting it all together, what we've seen with Japan, with the EU, with the talks which are due to be held in Stockholm between the US and China, it really does negate the risk of a prolonged trade war,' said Tony Sycamore, market analyst at IG. 'The importance of the August tariff deadline has significantly been diffused.' The Australian dollar, often seen as a proxy for risk sentiment, was 0.12% higher at US$0.65725 in early trading, hovering around the near eight-month peak scaled last week. Fed, BOJ await In an action-packed week, investors will watch out for the monetary policy meetings from the Fed and the BOJ as well as the monthly US employment report and earnings reports from megacap companies Apple, Microsoft and Amazon. While the Fed and the BOJ are expected to stand pat on rates, comments from the officials will be crucial for investors to gauge the interest rate path. The trade deal with Japan has opened the door for the BOJ to raise rates again this year. Meanwhile, the Fed is likely to be cautious on any rate cuts as officials seek more data to determine if tariffs are worsening inflation before they ease rates further. But tensions between the White House and the central bank over monetary policy have heightened, with Trump repeatedly denouncing Fed chair Jerome Powell for not cutting rates. Two of the Fed Board's Trump appointees have articulated reasons for supporting a rate cut this month. ING economists expect December to be the likely starting point for rate cuts, but it 'may be a 50 basis point cut, if the evidence on weaker jobs and GDP growth becomes more apparent as we anticipate.' 'This would be a similar playbook to the Federal Reserve's actions in 2024, where it waited until it was completely comfortable to commit to a lower interest rate environment,' they said in a note.
The Star
2 days ago
- The Star
South Africa continues tariff negotiation with U.S.
JOHANNESBURG, Aug. 1 (Xinhua) -- With a 30-percent tariff imposed by the United States set to take effect, South African President Cyril Ramaphosa on Friday pledged to pursue all diplomatic efforts to safeguard the national interests. According to a statement released by the presidency, South Africa will continue to negotiate with the United States regarding the 30 percent tariff, which is now expected to take effect at 12:01 a.m. EDT (0401 GMT) on Aug. 7. The South African government has presented the U.S. side with a framework deal aimed at enhancing mutually beneficial trade and investment relations. "All channels of communication remain open to engage with the United States, and our negotiators are ready, pending an invitation from the United States," the presidency said in the statement. The presidency noted that the South African government is finalizing a package to support companies vulnerable to reciprocal tariffs, which includes several measures to assist firms, producers, and workers. "South Africa will continue to pursue all diplomatic efforts to safeguard its national interests," said the presidency. On Tuesday, the South African government acknowledged that "the intersection of geopolitical, domestic and trade issues" defines the current impasse between the two sides. Relations between South Africa and the United States have taken a downturn since U.S. President Donald Trump took office in January. Trump indicated that he may skip the Group of 20 Summit, which will be held in November in Johannesburg, the largest city and economic hub of South Africa.
The Sun
2 days ago
- The Sun
Dollar surges as Trump tariffs impact global currencies
LONDON: The dollar headed for its strongest weekly performance in almost three years against other major currencies, maintaining momentum on Friday after U.S. President Donald Trump imposed new tariff rates on dozens of trade partners. Some of the currencies of the countries that were hit the hardest, such as Switzerland, which now faces a 39% rate, fell sharply. The Swiss franc touched its weakest in six weeks, while the Canadian dollar headed for a seventh straight weekly loss. The dollar also gained against other currencies due to drivers other than tariffs. The yen headed for its largest weekly loss this year after the Bank of Japan signalled it was in no hurry to resume interest rate hikes, prompting Finance Minister Katsunobu Kato to say on Friday that officials were 'alarmed' by currency moves. Friday also brings the monthly U.S. employment report, which is expected to show 110,000 workers were added to nonfarm payrolls in July. A large part of the dollar's strength this month has come from the perception among investors that Trump's tariffs have not derailed the economy and, so far, have not drastically lifted inflation. The Federal Reserve, despite pressure from Trump on Chair Jerome Powell to cut rates, has indicated it is in no rush to do so. Friday's payrolls report may not move the needle much on that assumption, even if a weaker reading elicits some selling of U.S. assets like the dollar, according to IG strategist Chris Beauchamp. 'Fundamentally the U.S. economy is okay, it's not in the most wonderful place, tariffs will hurt a little bit and the market looks like it could be vulnerable in the short term to more selling, simply as an excuse to take some money off the table to sit it out and wait and see what happens,' he said. 'You'd have to have a lot of very bad data in a very short period of time between now and September to revive the corpse of a September rate cut,' he said. The dollar index, which tracks the U.S. currency against a basket of six others, is on course to rise 2.4% this week, its best weekly performance since a 3.1% rally in September 2022. It was last up 0.1% at 100.13, its highest since late May. TARIFF HITS The Swissie fell against a range of currencies, surrendering its habitual safe-haven label in the face of a selloff in stocks and commodities, in response to Trump's hefty duties and to his demand that pharma companies - key Swiss exporters - lower the prices at which they sell to U.S. consumers. The dollar rose by as much as 0.6% to a high of 0.8173 francs, the most in six weeks, while the euro gained 0.5% to trade at 0.932 francs. The yen, another classic safe-haven currency, was last a touch stronger on the day against the dollar, which fell 0.15% to 150.545 yen, having earlier traded at its strongest since late March. The dollar also advanced on the Canadian dollar, up 0.13% at the day's high of $1.38735, after Canada was hit with a 35% tariff, instead of the threatened 25%. The euro remained pinned near an almost two-month low around $1.1408, as it continues to be weighed down by what markets see as a lopsided trade agreement with Washington. 'In the short-term, you can make the case for more dollar strength,' said Mike Houlahan, director at Electus Financial in Auckland. 'The lion's share of the tariff news has washed through.' 'The big move of the week has really been the euro getting re-rated downwards,' he said. 'The net result would be the EU-U.S. trade deal is a further headwind for the euro.' The EU's framework trade agreement with the U.S., struck on Sunday, was quickly criticized by French leaders and the German head of the European Parliament's trade committee as being unfair for Europe. - Reuters
