Asian Markets News: Yielding yen weakens as shares continue gains ahead of tech earnings

News from Asian Markets: While the Japanese yen was forced to new 34-year lows by a strong dollar, shares continued to rise on Tuesday, following Wall Street’s lead, as attention shifted to the week’s earnings announcements from American tech titans.

The MSCI’s broadest index of Asia-Pacific equities outside of Japan increased by 0.5%, driven by gains of 0.8% in Hong Kong’s Hang Seng index and a 1% increase in Taiwanese shares.

Regaining some of the 3.7% losses from the previous week, the Asian index increased by 1% the day before as concerns of a significant escalation in the Middle East war subsided. The Nikkei of Japan gained 0.1%.

Tech stocks in the area were upbeat. The MSCI Asia-Pacific ex-Japan IT index increased by 0.8%, while Taiwan Semiconductor Manufacturing Co., Ltd. surged by 1.5%.

On the other hand, blue-chip stocks in China dropped 0.6%.

Big tech stocks on Wall Street beat expectations ahead of their quarterly releases this week, which lifted the Nasdaq by 1.1%. Nvidia, the darling of AI, gained 4.4%, Amazon.com increased 1.5%, and Alphabet increased 1.4%. Tesla, on the other hand, fell 3.4% as it lowered pricing in its main regions.

Chief economist at AMP Shane Oliver said, “Odds are the earnings reports that we see over the next few weeks will be positive, but obviously there’s still issues around what the Fed will do next.” “It’s too early to say that problems in the Middle East have gone away.”

“A number of factors might lead to volatility in the next few months until the end of the year. Thus, the markets are likely about to enter a more limited and turbulent phase.”

This week, tech behemoths including Microsoft, Tesla, Meta Platforms, and Alphabet will release their financial reports.

UBS reduced its rating of the mega-cap businesses on Monday, citing the possibility of a “collapse” in the earnings growth pace of the so-called Big Six technology equities over the next quarters.

Markets are anticipating the publication of the March PCE data, the Fed’s favored inflation indicator, and the U.S. gross domestic product statistics later this week, in addition to the best corporate results. These releases will help determine the direction of monetary policy.

The first rate reduction by the Fed is projected to occur in September, according to traders, and the overall amount of easing anticipated this year is just 40 basis points, which is a dramatic departure from the roughly 150 basis points of cuts factored in at the start of the year.

The rates on the two- and 10-year U.S. Treasury notes have both increased by almost 100 basis points from their previous lows due to the significant change in interest rate expectations.

Due to a dearth of information and news on Tuesday, they hardly moved; the 10-year yield was at 4.6167 percent, while the two-year yield remained at 4.9713 percent.

The euro has been under pressure due to the divergent rate expectations between the United States and Europe. It was last week’s closing five months below its five-month low of $1.0601.

The beleaguered yen continued to fall to new 34-year lows. It dropped to a new low of 154.85 overnight before rising 0.1% to 154.71 per dollar. [FRX/]

After Japan’s finance minister, Shunichi Suzuki, said that last week’s trilateral meeting with his counterparts in the United States and South Korea set the stage for Tokyo to take appropriate action in the foreign currency market, the risk of intervention remained high.

As investors continued to evaluate the Middle East scenario, oil prices somewhat recovered from their steep overnight losses. While U.S. crude climbed 0.2% to $82.06 a barrel, Brent futures increased by 0.2% to $87.16 a barrel. [O/R]

However, after falling 2.7% over night, gold prices shed 1% to $2,295.9 per ounce.