Yen pressured, stocks rose as US government shutdown ended
Stocks and gold took a breather on Thursday as the US Congress voted to end the longest government shutdown ever, with markets awaiting the resumption of US economic data to gauge the outlook for interest rates.
US stock futures traded flat.
Japan’s Nikkei rose 0.5% but the Topix index rose nearly 1% to a record high as investors shifted portfolios away from artificial intelligence (AI) companies to buy exposure to other parts of the economy.
Similar moves occurred overnight, along with a surge in gold prices above $4,200 an ounce and a slight rise in US 10-year bonds at 4.067%.
US President Donald Trump, who is expected to host Wall Street executives for dinner on Wednesday, will sign legislation to end the government shutdown at 21:45 (0245 GMT), the White House said.
Delayed economic data is likely to be released next week, economists forecast, and the focus is on whether the data will support private surveys showing a weak job market.
“One of the arguments now is that with the reopening, we should get a lot of data that will provide more clarity for (Federal Reserve Chair Jerome) Powell to say: ‘I’m lowering interest rates because of this,’” said Damian Rooney, director of institutional sales at Perth-based stockbroker Argonaut.
In the Australian market, volumes were light but there were offers for lithium and gold miners, he said, as lower interest rates tended to encourage buyers to buy gold.
“It means these guys are making a lot of profits in Australian dollars. I think we’ve got more opportunities there,” Rooney said. Most other sectors weakened in Australia and the index fell 1%.
Hong Kong’s Hang Seng fell slightly from its highest level in a month and the Shanghai Composite rose 0.1%.
On Wall Street, the Dow Jones index hit a record high overnight while the tech-heavy Nasdaq index fell.
In London, the FTSE 100, which is the mining sector, closed at a record high. Banking shares also pushed the pan-European STOXX 600 to a record peak while Italy’s FTSE MIB has hit its highest level in almost a quarter of a century.
YEN IS QUESTIONABLE
The Japanese yen is under renewed pressure as the country’s new prime minister has pushed the central bank to slow down further interest rate increases. The currency hit a record low of 179.49 per euro and was near a nine-month low against the dollar of 154.94.
The yen touched 155.05 against the dollar on Wednesday, prompting the finance minister to remind traders that the government was watching closely for the start of possible intervention in the market.
Bank of Japan Governor Kazuo Ueda appeared before parliament on Thursday and said underlying inflation was gradually rising towards the bank’s target.
Elsewhere in foreign exchange trading, the Australian dollar strengthened after data showed employment increased in October, reinforcing views that the easing cycle in Australia may have ended.
The Aussie was last up about 0.2% at $0.6552 and expectations for a May rate cut fell from nearly 70% to 32%.
US Treasuries stable. Brent crude futures fell slightly to a three-week low of $62.48 a barrel after OPEC changed its forecast to expect a small surplus to oil demand in 2026.
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Source: Reuters
