- Asia session equities are again on the retreat as China's Yuan slide in Friday's early trading sends traders scurrying for cover.
- Trade war tensions remain just beneath the surface, and promise to derail buyers' plans at a moment's notice.
Asian equities slid back after several days of tentative gains, driven into the red by a steeply-discounted Yuan which fell into one-year lows, and traders are fearing another flare-up of the US-China trade dispute as the People's Bank of China (PBOC) tests the limits of what the US will allow before once again deeming China a currency manipulator. As explained by Reuters :
“There are several channels through which the yuan’s weakening is hitting Asian stocks. First, a weaker yuan challenges the competitiveness of other Asian economies,” said Shusuke Yamada, currency and equity strategist at Bank of America Merrill Lynch in Tokyo. “The weaker currency also causes fears of capital leaving China and disrupting their capital markets, which could have knock-on effects on Asia. Lastly, a weaker yuan deepens trade war concerns.”
- Reuters
Asian stock markets have been on-edge amidst the recent trade-war flare up, and tensions are expected to remain steady in the run-up to the EU's trade delegation to Washington next week, who are preparing a list of retaliatory tariffs if the US goes ahead with applying far-reaching tariffs on all automobile imports.
Japan's leading Nikkei 225 index is down -0.85%, with Tokyo's Topix index also in the red for -0.70% for Friday, while Hong Kong's Hang Seng and Shanghai's CSI 300 index are off by -0.45% and -0.25% respectively, with the MSCI broad Asia-Pacific index down -0.35% to cap off the week.
Nikkei 225 levels to watch
Japan's leading equity index is sharply off the day's highs at 22,878.00, currently trading near 22,650.00 after reaching a Friday low of 22,540.00. Hopeful bulls will be looking to make a determined push back over Thursday's high of 22,930.00 in the coming week, while short-sellers will be looking to extend the current bearish slide beyond the week's lows to test last week's swing high of 22,325.00.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.