Asia markets extend poor run with more losses

by Jonathan Adams
Asia markets

Asian markets got off to a weak start, with Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Wellington all in negative territory

Asian markets extended last week’s poor run with more losses Monday, following on from another tepid lead from Wall Street as profit-taking weighed on the technology sector.

A forecast-topping read on the US services sector provided further evidence that the US economy remained in rude health and dealt a blow to hopes for interest rate cuts.

Investors are also tracking developments in Japan as the yen stays near three-decade lows against the dollar, leading the country’s top currency official to warn authorities were ready to step in to provide support.

A surge in the tech sector has helped push markets to record or multi-year highs but worries that the buying has gone too far have set in and profit-taking has weighed on equities in recent weeks.

That saw Wall Street close broadly down Friday, with the better-than-expected figures on the US services sector, which is at a more than two-year high, weighing on sentiment.

The next major indicator to come is the PCE index – the Federal Reserve’s preferred gauge of inflation – which could play a key role in the bank’s plans for monetary policy.

Decision-makers have pushed back against speculation they could reduce interest rates in September, with some even suggesting they are happy to keep them higher into the new year.

Asian markets got off to a weak start, with Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Wellington all in negative territory.

Tokyo, Manila and Jakarta rose.

The yen slid further, and is nearing the 160.17 per dollar mark that forced authorities to intervene in currency markets earlier in the year.

The movement led vice finance minister Masato Kanda to say officials were ready to step in.

If there are excessive currency fluctuations, it has a negative impact on the national economy, he said.

He added: In the event of excessive moves based on speculation, we are prepared to take appropriate action.

The comments have helped keep the yen below 160 but US rate uncertainty was putting fresh pressure on the currency.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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