By Rae Wee
SINGAPORE (Reuters) – Global shares started the week on firmer footing ahead of a much-anticipated earnings release from Nvidia, while in Japan a speech from the head of the central bank left markets none the wiser about the country’s interest rate outlook.
Bank of Japan Governor Kazuo Ueda reiterated on Monday that the central bank will continue to raise interest rates if economic and price developments move in line with its forecasts, but made no mention of whether a rate hike could come in December.
His speech was closely watched by investors looking for clues about the BoJ’s next rate hike, which could have been seen as a way to withstand yen weakness.
The Japanese currency has fallen about 7% against a resurgent dollar since October and weakened above the 156 per dollar level last week for the first time since July, leaving traders alert to any intervention by Japanese authorities.
It was last down 0.3% at 154.72 per dollar, paring some of the losses it made when Ueda spoke.
On the likelihood of a BOJ hike next month, IG market analyst Tony Sycamore said it would “depend to some extent on where the dollar/yen is.”
“If the dollar/yen rises around 160, I think that would increase the (chances) of a rate hike. But I think he’s probably not unhappy with the dollar/yen being around 150, 152. I think that probably keeps him on the sidelines. see you next year.
“It’s coming, it’s just a matter of when… the Japanese economy will do well.”
Despite a weaker yen, Japan’s Nikkei fell 0.76%, dragged by a decline in healthcare company shares.
MSCI’s broadest index of Asia-Pacific shares outside Japan, meanwhile, rose 0.7%.
Similarly, Nasdaq futures rose 0.6%, while S&P 500 futures rose 0.25%.
The highlight for investors this week will be Nvidia’s third-quarter results on Wednesday, where analysts expect the artificial intelligence chip leader to post a sales jump.
Nvidia shares are up nearly 200% this year, with its hefty weighting in the S&P 500 partly responsible for pushing the index to record highs this year.
But the blistering multi-year run has also raised the bar for better earnings, and a misstep could fuel concerns that the market’s AI expectations have exceeded reality.
Elsewhere, Chinese shares opened higher on Monday. The CSI300 blue chip index was last up 1.22%, while the Shanghai Composite Index rose 1.34%.
Hong Kong’s Hang Seng index rose 1.5%.
ASSETS AND PRIZES
U.S. Treasury yields remained near multi-month highs on Monday, buoyed by expectations that the Federal Reserve will cut rates less aggressively over time. [US/]
