Stocks steady, dollar catches breath as traders eye US CPI
By Tom Westbrook
SINGAPORE (Reuters) — Asian stock markets nudged sideways on Tuesday while the dollar took a breather, its recent gains chastened by resistance from central banks in China and Japan and by traders waiting on U.S. inflation data to signal that interest rates may have peaked.
The yen notched its best day against the dollar in two months overnight, after Bank of Japan Governor Kazuo Ueda said policymakers might have enough economic information by year's end to determine that short-term rates will need to rise.
The yuan had its best day in six months after authorities vowed to correct one-way moves and Reuters reported the central bank had stepped up scrutiny of dollar buying.
Both, however, remain near their weakest levels of the year and with the yuan at 7.3022 per dollar in offshore trade and the yen last a little off Monday highs at 146.68 per dollar. [FRX/]
Japanese government bonds remained under pressure on Tuesday, with 10-year JGB yields up 1 basis point to a fresh high of 0.71%. [JP/]
«The result of Ueda’s comments was an intense move higher in Japanese swaps and government bond yields,» said Chris Weston, head of research at brokerage Pepperstone in Melbourne.
"(It) is certainly constructive for yen longs. (But) I refrain from getting too excited at this stage...where the actions are more of a medium-term issue — we won't get the outcome of the spring wage negotiations until April 2024."
MSCI's broadest index of Asia-Pacific shares outside Japan was flat. Japan's Nikkei rose 0.3%, with markets looking to U.S. inflation data and this week's European Central Bank meeting to set interest rate expectations and the mood.
Due on Wednesday, markets are expecting the U.S. figures to show annualised core
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