By Rae Wee
SINGAPORE (Reuters) – Global stocks began the week on firmer footing ahead of a highly anticipated earnings release from Nvidia, while in Japan, a speech from its central bank’s head left markets none the wiser on the country’s rate outlook.
Bank of Japan Governor Kazuo Ueda reiterated on Monday the central bank will keep raising rates of interest if economic and price developments move consistent with its forecasts, but made no mention of whether a hike could are available in December.
His speech had been closely watched by investors for clues on the BOJ’s next rate hike, which might have been seen as a strategy to ward off against the yen’s weakness.
The Japanese currency has fallen some 7% since October against a resurgent dollar and last week weakened past the 156 per dollar level for the primary time since July, keeping traders on alert for any intervention from Japanese authorities.
It was last 0.3% lower at 154.72 per dollar, paring among the losses it made as Ueda spoke.
On the possibility of a BOJ hike next month, IG market analyst Tony Sycamore said it might “depend upon where dollar/yen is to a level”.
“If dollar/yen’s up at around 160, I believe that might increase the (probabilities) of a rate hike. But I believe he’s probably not unhappy with dollar/yen sitting around 150, 152. I believe that probably keeps him on the sidelines until next 12 months.
“It’s coming, it’s only a matter of when… the Japanese economy is doing okay.”
Despite a weaker yen, Japan’s Nikkei fell 0.76%, dragged by a decline in shares of healthcare firms.
MSCI’s broadest index of Asia-Pacific shares outside Japan, meanwhile, advanced 0.7%.
Similarly, Nasdaq futures gained 0.6%, while S&P 500 futures edged up 0.25%.
The highlight for investors this week will probably be Nvidia’s third-quarter results on Wednesday, where analysts expect the unreal intelligence chip leader to record a jump in revenue.
Shares of Nvidia are up nearly 200% this 12 months, with its hefty weighting within the S&P 500 partially accountable for the index’s charge to record highs this 12 months.
But its blistering multi-year run has also raised the bar for earnings outperformance and a slip-up could fuel worries that the market’s AI hopes have outstripped reality.
Elsewhere, Chinese stocks opened higher on Monday. The CSI300 blue-chip index last gained 1.22%, while the Shanghai Composite Index jumped 1.34%.
Hong Kong’s Hang Seng Index rose 1.5%.
TRUMP AND RATES
U.S. Treasury yields held near multi-month highs on Monday, bolstered by bets of less aggressive Federal Reserve rate cuts down the road. [US/]