Asian stocks traded mixed following a volatile U.S. session as investors weighed continuing concerns in Indonesia and Italy and strength in commodity prices. The euro climbed on reports the Italian government pulled back its budget-deficit plans.
Shares fell in Japan, fluctuated in Hong Kong and rose in Australia. Indonesia’s rupiah plumbed a new 20-year low as rising oil prices add to souring sentiment that’s left the nation’s central bank struggling to prevent further weakness. The Australian dollar fell briefly as weak building data fanned concerns of a slowdown. Crude oil futures steadied in New York above $75 a barrel, near the highest level in almost four years.
Italian assets remain volatile as the country’s budget confrontation with the EU raised the risk of a debt crisis. The euro rose after the Corriere della Sera reported Italy’s draft budget plan will pledge to cut the deficit to 2 percent in 2021, reversing the government’s initial proposal. The yield on 10-year Italian government bonds touched the highest level in more than four years Tuesday. In the U.S., retailers slipped after Amazon.com raised the minimum wage for all its employees, with the S&P 500 Index edging lower.
Investors remain on edge this week with the market impact of European politics and emerging market strains still high on the agenda. A close call between a U.S. and a Chinese warship in the disputed South China Sea in recent days added to tensions between two countries already embroiled in an escalating trade war. Meanwhile, Treasury yields remained near the top of the recent range as Federal Reserve Chairman Jerome Powell welcomed increases in Americans’ wages while expressing confidence that low unemployment won’t spur a takeoff in prices that would force him to hike interest rates more aggressively.
Elsewhere, the pound traded near three-week lows after Boris Johnson won cheers at the U.K. Conservative Party’s annual conference with an attack on Theresa May’s Brexit plan, but stopped short of calling for her to be removed as prime minister. In India, focus is back on the country’s financial sector after Prime Minister Narendra Modi’s government took control of Infrastructure Leasing & Financial Services Ltd., promising to end the group’s string of defaults.
These are the main moves in markets:
The MSCI Asia Pacific Index fell 0.4 percent as of 12:48 p.m. Tokyo time. Topix index slid 0.7 percent. Hong Kong’s Hang Seng Index fell 0.2 percent after swinging between gains and losses at least six times Australia’s S&P/ASX 200 Index added 0.3 percent. Futures on the S&P 500 Index rose 0.2 percent.
The Japanese yen was little changed at 113.77 per dollar. The offshore yuan slid less than 0.1 percent to 6.8816 per dollar. The euro advanced 0.3 percent to $1.1581. The Bloomberg Dollar Spot Index fell 0.1 percent.
The yield on 10-year Treasuries was little changed at 3.07 percent. Australia’s 10-year yield fell about 3 basis points to 2.64 percent.
West Texas Intermediate crude fell less than 0.05 percent to $75.22 a barrel. Gold rose 0.3 percent to $1,207.12 an ounce. LME copper was little changed at $6,283.50 per metric ton.