Stocks in Asia Slide, Yen Gains as Risks Pile Up: Markets Wrap

With optimism over U.S.-China trade talks fading from earlier in the week, concerns range from iffy prospects for President Donald Trump’s historic summit with North Korea’s leader to Turkey’s financial-market stability as the lira hits successive record lows. Japan’s currency rose the most in almost three weeks at one point as traders sought a haven, and the Topix index of Japanese stocks fell as much as 1 percent. Equity benchmarks from Hong Kong to Sydney declined. FTSE 100 futures fell in early London trading.

“If you look at history, you find that geopolitics does rattle markets,” Vasu Menon, OCBC Bank vice president, told Bloomberg Television. “The markets are clearly quite nervous because we’ve had a good run and this is an excuse for the markets to take a breather.”

U.S. stocks closed down Tuesday after Trump cast doubt on a meeting with Kim Jong Un during his Oval Office meeting with South Korean President Moon Jae-in. Shares had rallied earlier following China’s announcement that it will cut the import duty on passenger cars, signaling a further easing of trade tensions with the U.S.

Beyond geopolitics, central banks are also in focus this week. The Federal Reserve will release minutes of its latest policy meeting on Wednesday, while the ECB follows suit on Thursday. A raft of U.S. debt sales adds to the busy agenda.

Elsewhere, the New Zealand dollar retreated after the central bank published a discussion paper on unconventional monetary policy.

These are some key events to watch this week:

The Federal Reserve releases minutes of the central bank’s May 1-2 meeting on Wednesday; U.S. new home sale are due as are euro-area PMIs. Thursday sees the Bank of England Markets Forum at Bloomberg London. Speakers include BOE Governor Mark Carney and New York Fed President William Dudley. At the St. Petersburg Forum Friday, Russian President Vladimir Putin and French President Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News Editor-in-Chief John Micklethwait. Also Friday, European Union finance ministers discuss the latest on Brexit talks, in Brussels.

These are the main moves in markets:

Stocks

Topix index fell 0.7 percent at the close in Tokyo. S&P/ASX 200 Index slid 0.1 percent. Kospi index rose 0.4 percent. Hang Seng Index dropped 1.1 percent. Shanghai Composite Index lost 1.1 percent. S&P 500 Index futures fell 0.2 percent. FTSE 100 futures fell 0.1 percent as of 7:02 a.m. in London. The MSCI Asia Pacific Index lost 0.4 percent.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent. The euro dipped 0.2 percent to $1.1758. The Japanese yen rose 0.4 percent to 110.49 per dollar. The Turkish lira sank 2.3 percent to 4.7803 per dollar. The kiwi dollar lost 0.5 percent to 69.01 U.S. cents.

Bonds

The yield on 10-year Treasuries fell one basis point to 3.0486 percent. Australia’s 10-year bond yield decreased two basis points to 2.84 percent. The German 10-year bund yield fell about one basis point to 0.55 percent.Commodities West Texas Intermediate crude fell 0.2 percent to $71.97 a barrel. Gold was little changed at $1,290.32 an ounce. LME copper fell 0.7 percent to $6,930.50 a metric ton.