Japanese stocks saw an uptick as the yen weakened, contrasting with a dip in Chinese stocks, amidst a week of mixed trading activity leading up to a crucial U.S. inflation report. The Nikkei index climbed 0.93% to 40,775.62, approaching its all-time high. Meanwhile, the yen edged closer to a level that previously triggered central bank intervention, trading slightly weaker at 151.73 against the dollar.
Despite the Bank of Japan's first rate hike in 17 years, the yen continues to slide, with a central bank member advocating for a cautious approach towards policy normalization. In contrast, both Hong Kong's Hang Seng and mainland Chinese blue chips experienced a 0.4% decline, reversing their prior gains.
The broader MSCI index of Asia-Pacific shares saw a minor increase of 0.11%, which turned into a 0.22% decrease when excluding Japanese stocks. Market strategists point to choppy trading due to quarterly rebalancing and anticipation of significant events, including the U.S. Federal Reserve's inflation indicator release and comments from Fed Chair Jerome Powell, both scheduled for Friday.
The U.S. dollar index saw a slight rise, while the euro and sterling experienced minor declines. Investors are closely watching global central banks for signs of rate cuts, with Sweden's Riksbank expected to maintain its policy but hints at a potential cut by June.
U.S. Treasury yields remained steady, and gold slightly decreased as it sought a new support level after recently hitting a record high. Bitcoin and crude oil prices saw declines, with the latter affected by a surge in U.S. stockpiles and expectations that major producers will maintain their output policy.
