U.S. Policy, Jackson Hole Weigh on Asian Trading: Markets Wrap

Benchmarks in Tokyo dropped amid low volumes, while equity gauges rose in South Korea, Australia and Hong Kong. The yen declined as investors marked time ahead of a meeting of central bankers at Jackson Hole. All major U.S. equity benchmarks declined on Wednesday after Donald Trump’s threat to shut down the U.S. government triggered concerns Congress won’t easily raise the debt ceiling and deliver on tax reform.

Trump’s latest remarks, which included talk of ending the North American Free Trade Agreement, rekindled speculation the administration will struggle to deliver on its fiscal plans and heightened unease about the future of global trade. Equities were buoyed and bonds fell on Tuesday earlier after his treasury secretary said getting Congress to raise the debt ceiling and reforming the tax code were priorities.

Trading volumes on Japan’s Topix index were about 20 percent below the 30-day average. European Central Bank President Mario Draghi avoided giving any clues on the ECB’s current thinking in a speech in Germany in which he said central banks must be open-minded on policy innovations as they prepare for future economic developments.

Among other key events looming this week:

Hong Kong’s trade balance is due Thursday. Combined sales of previously owned U.S. homes (Thursday) has probably edged up in July from the prior month, indicating a still robust real estate market held in check by rising property prices, economists forecast. Federal Reserve Chair Yellen is scheduled to speak about financial stability at 10 a.m. New York time on Friday at the Kansas City Fed’s symposium. Draghi is set to give a speech at 3 p.m.

Here are the main moves in markets: Stocks

Japan’s Topix index fell 0.2 percent and Korea’s Kospi index rose 0.5 percent. Australia’s S&P/ASX 200 Index added 0.2 percent. Hong Kong’s Hang Seng Index rose 0.6 percent as the market reopened after being shut on Wednesday when Typhoon Hato slammed into the city. Futures on the S&P 500 Index were little changed as of 1:13 p.m. in Tokyo. The underlying measure fell 0.4 percent Wednesday. The MSCI Asia Pacific Index climbed 0.1 percent.

Currencies

The yen fell 0.2 percent at 109.21 per dollar. The Bloomberg Dollar Spot Index rose 0.1 percent after falling 0.3 percent in the previous session. The euro was trading at $1.1800 after gaining 0.4 percent on Wednesday.

Bonds

The yield on 10-year Treasuries was steady after falling five basis points to 2.17 percent, the lowest closing level since June 26. The 10-year Australian bond yield fell four basis points to 2.64 percent.

Commodities

West Texas Intermediate crude was little changed at $48.39 a barrel. It climbed 1.6 percent as oil stockpiles have dropped every week since late June and gasoline inventories also fell, while crude production climbed for a second week, according to an EIA report Wednesday. Gold lost 0.2 percent to $1,288.01 an ounce after gaining 0.5 percent on Wednesday.