Asian Stocks Tumble Amid Rising Trade Tensions and Yen Surge

Asian stocks slide on rising trade tensions, yen climbs

SINGAPORE, July 18 (Reuters) - Asian equities fell on Thursday, led by chip stocks as investors fret over the prospect of escalating trade tensions between the U.S. and China, while the yen surged to a six-week high in the wake of suspected interventions by Tokyo last week. The U.S. dollar loitered near its weakest in four months against a basket of currencies as comments from Federal Reserve officials bolstered the case for a cut in September, keeping gold prices near record highs. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.57%, with tech heavy South Korean shares down nearly 1%. The yen's strength and a sharp drop in chip stocks took Japan's Nikkei down 2%. China stocks also slipped as investors awaited policy news from a key leadership gathering in Beijing. The Shanghai Composite index was down 0.4% and blue-chip CSI300 index off 0.5%. A report that the United States was considering tighter curbs on exports of advanced semiconductor technology to China sent chip stocks and the Nasdaq tumbling overnight, led by AI darling Nvidia and Apple. Investor nerves were also jangled after Republican presidential candidate Donald Trump said Taiwan "did take about 100% of our chip business" and should pay the U.S. for its defence as it does not give the country anything. The comments sent shares of Taiwan Semiconductor Manufacturing Co sharply lower on Wednesday ahead of its second quarter earnings later on Thursday. TSMC shares slumped 3% in early trading, with the broader index down nearly 2%. "We're seeing quite a few divergences across key markets, most of which can be tied back to U.S. politics one way or another," said Matt Simpson, senior market analyst at City Index. "And this could just be the beginning of broken correlations making a comeback as markets figure out who will do what in the U.S. political landscape." Investors are fully pricing in a 25 basis point rate cut in September after Federal Reserve officials said on Wednesday the U.S. central bank was "closer" to cutting interest rates, citing the progress in inflation easing close to its 2% target. That has left the dollar struggling, with the euro steady at $1.09385 near the four-month high it touched on Wednesday. Sterling was last at $1.30065, close to a one-year peak touched in the previous session. Investor attention will be on the policy decision from the European Central Bank later in the day, where the central bank is expected to stand pat, although comments from officials will be crucial in gauging when the next rate cut will come. The dollar index, which measures the U.S. currency versus six peers, was last at 103.69, just above the four-month low of 103.64 it touched on Wednesday. "Looking beyond the next few weeks means seeing that falling U.S. inflation expectations will reach its limits by late 2024," Thierry Wizman, global FX and rates strategist at Macquarie said in a note. "That a Trump policy agenda will be associated with U.S. inflation, not disinflation, and that the Fed's easing cycle will, ultimately, be shallow, not deep." The yen hit a six-week high against the dollar at 155.37 in early trading after a sharp rise on Wednesday that had traders suspecting Japanese authorities were once again in the market supporting the currency. Bank of Japan data suggested Tokyo may have bought nearly 6 trillion yen last week to lift the frail yen away from the 38-year lows it has been rooted to since the start of the month. The yen has dropped 9.5% against the dollar this year as the wide interest rate difference between the U.S. and Japan weigh, creating a lucrative trading opportunity, in which traders borrow the yen at low rates to invest in dollar-priced assets for a higher return, known as carry trade. In commodities, gold was 0.18% higher at $2,462 per ounce just below the record high of $2,483.60 it touched on Wednesday.

Asian stocks slide on rising trade tensions, yen climbs

SINGAPORE, July 18 (Reuters) - Asian equities fell on Thursday, led by chip stocks as investors fret over the prospect of escalating trade tensions between the U.S. and China, while the yen surged to a six-week high in the wake of suspected interventions by Tokyo last week. The U.S. dollar loitered near its weakest in four months against a basket of currencies as comments from Federal Reserve officials bolstered the case for a cut in September, keeping gold prices near record highs. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab fell 0.57%, with tech heavy South Korean shares (.KS11), opens new tab down nearly 1%. The yen's strength and a sharp drop in chip stocks took Japan's Nikkei (.N225), opens new tab down 2%. China stocks also slipped as investors awaited policy news from a key leadership gathering in Beijing. The Shanghai Composite index (.SSEC), opens new tab was down 0.4% and blue-chip CSI300 index (.CSI300), opens new tab off 0.5%. A report that the United States was considering tighter curbs on exports of advanced semiconductor technology to China sent chip stocks and the Nasdaq (.IXIC), opens new tab tumbling overnight, led by AI darling Nvidia (NVDA.O), opens new tab and Apple (AAPL.O), opens new tab. Investor nerves were also jangled after Republican presidential candidate Donald Trump said Taiwan "did take about 100% of our chip business" and should pay the U.S. for its defence as it does not give the country anything. The comments sent shares of Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab sharply lower on Wednesday ahead of its second quarter earnings later on Thursday. TSMC shares slumped 3% in early trading, with the broader index (.TWII), opens new tab down nearly 2%. "We're seeing quite a few divergences across key markets, most of which can be tied back to U.S. politics one way or another," said Matt Simpson, senior market analyst at City Index. "And this could just be the beginning of broken correlations making a comeback as markets figure out who will do what in the U.S. political landscape." Investors are fully pricing in a 25 basis point rate cut in September after Federal Reserve officials said on Wednesday the U.S. central bank was "closer" to cutting interest rates, citing the progress in inflation easing close to its 2% target. That has left the dollar struggling, with the euro steady at $1.09385 near the four-month high it touched on Wednesday. Sterling was last at $1.30065, close to a one-year peak touched in the previous session. Investor attention will be on the policy decision from the European Central Bank later in the day, where the central bank is expected to stand pat, although comments from officials will be crucial in gauging when the next rate cut will come. The dollar index , which measures the U.S. currency versus six peers, was last at 103.69, just above the four-month low of 103.64 it touched on Wednesday. "Looking beyond the next few weeks means seeing that falling U.S. inflation expectations will reach its limits by late 2024," Thierry Wizman, global FX and rates strategist at Macquarie said in a note. "That a Trump policy agenda will be associated with U.S. inflation, not disinflation, and that the Fed's easing cycle will, ultimately, be shallow, not deep." The yen hit a six-week high against the dollar at 155.37 in early trading after a sharp rise on Wednesday that had traders suspecting Japanese authorities were once again in the market supporting the currency. Bank of Japan data suggested Tokyo may have bought nearly 6 trillion yen last week to lift the frail yen away from the 38-year lows it has been rooted to since the start of the month. The yen has dropped 9.5% against the dollar this year as the wide interest rate difference between the U.S. and Japan weigh, creating a lucrative trading opportunity, in which traders borrow the yen at low rates to invest in dollar-priced assets for a higher return, known as carry trade. In commodities, gold was 0.18% higher at $2,462 per ounce just below the record high of $2,483.60 it touched on Wednesday. Editing by Jacqueline Wong Our Standards: The Thomson Reuters Trust Principles., opens new tab

Asian stocks slide on rising trade tensions, yen climbs

SINGAPORE - Asian equities fell on Thursday, led by chip stocks as investors fret over the prospect of escalating trade tensions between the U.S. and China, while the yen surged to a six-week high in the wake of suspected interventions by Tokyo last week. The U.S. dollar loitered near its weakest in four months against a basket of currencies as comments from Federal Reserve officials bolstered the case for a cut in September, keeping gold prices near record highs. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.57%, with tech heavy South Korean shares down nearly 1%. The yen's strength and a sharp drop in chip stocks took Japan's Nikkei down 2%. China stocks also slipped as investors awaited policy news from a key leadership gathering in Beijing. The Shanghai Composite index was down 0.4% and blue-chip CSI300 index off 0.5%. A report that the United States was considering tighter curbs on exports of advanced semiconductor technology to China sent chip stocks and the Nasdaq tumbling overnight, led by AI darling Nvidia and Apple. Investor nerves were also jangled after Republican presidential candidate Donald Trump said Taiwan "did take about 100% of our chip business" and should pay the U.S. for its defence as it does not give the country anything. The comments sent shares of Taiwan Semiconductor Manufacturing Co sharply lower on Wednesday ahead of its second quarter earnings later on Thursday. TSMC shares slumped 3% in early trading, with the broader index down nearly 2%. "We're seeing quite a few divergences across key markets, most of which can be tied back to U.S. politics one way or another," said Matt Simpson, senior market analyst at City Index. "And this could just be the beginning of broken correlations making a comeback as markets figure out who will do what in the U.S. political landscape." Investors are fully pricing in a 25 basis point rate cut in September after Federal Reserve officials said on Wednesday the U.S. central bank was "closer" to cutting interest rates, citing the progress in inflation easing close to its 2% target. That has left the dollar struggling, with the euro steady at $1.09385 near the four-month high it touched on Wednesday. Sterling was last at $1.30065, close to a one-year peak touched in the previous session. Investor attention will be on the policy decision from the European Central Bank later in the day, where the central bank is expected to stand pat, although comments from officials will be crucial in gauging when the next rate cut will come. The dollar index, which measures the U.S. currency versus six peers, was last at 103.69, just above the four-month low of 103.64 it touched on Wednesday. "Looking beyond the next few weeks means seeing that falling U.S. inflation expectations will reach its limits by late 2024," Thierry Wizman, global FX and rates strategist at Macquarie said in a note. "That a Trump policy agenda will be associated with U.S. inflation, not disinflation, and that the Fed's easing cycle will, ultimately, be shallow, not deep." The yen hit a six-week high against the dollar at 155.37 in early trading after a sharp rise on Wednesday that had traders suspecting Japanese authorities were once again in the market supporting the currency. Bank of Japan data suggested Tokyo may have bought nearly 6 trillion yen last week to lift the frail yen away from the 38-year lows it has been rooted to since the start of the month. The yen has dropped 9.5% against the dollar this year as the wide interest rate difference between the U.S. and Japan weigh, creating a lucrative trading opportunity, in which traders borrow the yen at low rates to invest in dollar-priced assets for a higher return, known as carry trade. In commodities, gold was 0.18% higher at $2,462 per ounce just below the record high of $2,483.60 it touched on Wednesday. (Editing by Jacqueline Wong)

Asian stocks slide on rising trade tensions, yen climbs

Asian equities fell due to U.S.-China trade tensions; MSCI Asia-Pacific shares down 0.57%, South Korea 1%, Nikkei 2%, Shanghai 0.4%, CSI300 0.5%. Yen rose on suspected BOJ intervention. Dollar at a four-month low. Fed backs September rate cut, gold prices high. Nvidia, Apple dropped. Trump's comments hurt TSMC shares. ECB steady. Trump policy affects inflation expectations. Carry trade noted.Asian equities fell on Thursday, led by chip stocks as investors fret over the prospect of escalating trade tensions between the U.S. and China, while the yen surged to a six-week high in the wake of suspected interventions by Tokyo last week. The U.S. dollar loitered near its weakest in four months against a basket of currencies as comments from Federal Reserve officials bolstered the case for a cut in September, keeping gold prices near record highs. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.57%, with tech heavy South Korean shares down nearly 1%. The yen's strength and a sharp drop in chip stocks took Japan's Nikkei down 2%. China stocks also slipped as investors awaited policy news from a key leadership gathering in Beijing. The Shanghai Composite index was down 0.4% and blue-chip CSI300 index off 0.5%. A report that the United States was considering tighter curbs on exports of advanced semiconductor technology to China sent chip stocks and the Nasdaq tumbling overnight, led by AI darling Nvidia and Apple. Investor nerves were also jangled after Republican presidential candidate Donald Trump said Taiwan "did take about 100% of our chip business" and should pay the U.S. for its defence as it does not give the country anything. The comments sent shares of Taiwan Semiconductor Manufacturing Co sharply lower on Wednesday ahead of its second quarter earnings later on Thursday. TSMC shares slumped 3% in early trading, with the broader index down nearly 2%. "We're seeing quite a few divergences across key markets, most of which can be tied back to U.S. politics one way or another," said Matt Simpson, senior market analyst at City Index. "And this could just be the beginning of broken correlations making a comeback as markets figure out who will do what in the U.S. political landscape." Investors are fully pricing in a 25 basis point rate cut in September after Federal Reserve officials said on Wednesday the U.S. central bank was "closer" to cutting interest rates, citing the progress in inflation easing close to its 2% target. That has left the dollar struggling, with the euro steady at $1.09385 near the four-month high it touched on Wednesday. Sterling was last at $1.30065, close to a one-year peak touched in the previous session. Investor attention will be on the policy decision from the European Central Bank later in the day, where the central bank is expected to stand pat, although comments from officials will be crucial in gauging when the next rate cut will come. The dollar index, which measures the U.S. currency versus six peers, was last at 103.69, just above the four-month low of 103.64 it touched on Wednesday. "Looking beyond the next few weeks means seeing that falling U.S. inflation expectations will reach its limits by late 2024," Thierry Wizman, global FX and rates strategist at Macquarie said in a note. "That a Trump policy agenda will be associated with U.S. inflation, not disinflation, and that the Fed's easing cycle will, ultimately, be shallow, not deep." The yen hit a six-week high against the dollar at 155.37 in early trading after a sharp rise on Wednesday that had traders suspecting Japanese authorities were once again in the market supporting the currency. Bank of Japan data suggested Tokyo may have bought nearly 6 trillion yen last week to lift the frail yen away from the 38-year lows it has been rooted to since the start of the month. The yen has dropped 9.5% against the dollar this year as the wide interest rate difference between the U.S. and Japan weigh, creating a lucrative trading opportunity, in which traders borrow the yen at low rates to invest in dollar-priced assets for a higher return, known as carry trade. In commodities, gold was 0.18% higher at $2,462 per ounce just below the record high of $2,483.60 it touched on Wednesday.

Stocks dive on prospect of US trade curbs; yen jumps

* Wall Street slumps on possible trade curbs, Trump on Taiwan NEW YORK, July 17 (Reuters) - World stock indexes mostly fell on Wednesday, with Wall Street weighed down by the prospect of U.S. trade curbs, while the yen rose sharply in a move suspected to be the result of another intervention from Japanese officials to buttress the currency from multi-decade lows. Treasury yields gained as New York Federal Reserve President John Williams acknowledged progress in disinflation but said that he wants to see further improvement before cutting interest rates, making the odds of a July rate cut even less likely. A reduction by September is still seen as a 98% probability, according to CME Group's FedWatch tool. The benchmark S&P 500 equity benchmark index lost 50.70 points, or 0.90%, to 5,616.01, while the tech-heavy Nasdaq Composite lost 323.94 points, or 1.72%, to 18,185.40. Chipmaker stocks slumped on a report that the United States is mulling restricting imports of technology to China, coupled with lukewarm messages from Republican presidential nominee Donald Trump about defending key production hub Taiwan. Robert Pavlik, senior portfolio manager at Dakota Wealth, said he had taken some profits in tech. "I'm still optimistic that the market is not as expensive as maybe it's feared, but that's because we're so overbought that some near-term selling pressure is likely to develop," Pavlik added. MSCI's gauge of global stocks fell 4.16 points, or 0.50%, to 827.13. Shares of artificial intelligence chipmaker Nvidia, fell nearly 6% in early trading after a rocky Asian session for Taiwan's TSMC, which closed 2.4% lower. Investors earlier this week had formed a cautiously optimistic view of a second U.S. presidency for Trump, who is running against incumbent Democrat Joe Biden. "Many strategists have suggested (Trump) is bullish for equities, and I'm just not sure about that," said Benjamin Melman, global chief investment officer at Edmond de Rothschild Asset Management. The yen has posted several outsized moves in recent days, appreciating sharply on Thursday and Friday from 38-year lows of 161.96 per dollar, sudden rallies that market participants said had the signs of currency intervention. Bank of Japan data released on Tuesday suggested Tokyo may have spent 2.14 trillion yen ($13.5 billion) intervening on Friday. Combined with the estimated amount spent on Thursday, Japan is suspected to have bought nearly 6 trillion yen via intervention last week. The dollar index, which measures the greenback against a basket of currencies, fell 0.49% at 103.70, with the euro up 0.39% at $1.0939. Against the Japanese yen, the dollar weakened 1.32% to 156.3. The weaker dollar boosted demand for precious metal, propelling spot gold to an all-time high of $2,477.38 an ounce. Gold, priced in dollars, has a strong inverse relationship with the U.S. currency, as well as Treasury yields. The yield on benchmark U.S. 10-year notes rose 0.6 basis points to 4.173%, from 4.167% late on Tuesday. Softer jobs data and easing inflation has brought Treasury yields down this month by boosting the odds of the impending rate cut. Elsewhere, oil prices gained, with U.S. crude 1.75% higher at $82.17 a barrel. Brent rose to $84.75 per barrel, up 1.22% on the day. (Additional reporting by Chuck Mikolajczak and Caroline Valetkevitch, Editing by Sam Holmes, Kim Coghill, Arun Koyyur, Will Dunham and Gareth Jones)

Trump's Taiwan talk rattles Wall Street as chip stocks tumble

* Wall Street set for weak open after chipmaker sell-off * Sterling strengthens as UK inflation rises again * Dollar drops versus yen on Tokyo intervention talk LONDON July 17 (Reuters) - Geopolitical risks weighed on Wall Street on Wednesday after U.S. presidential candidate Donald Trump sounded lukewarm about defending Taiwan, sending chipmakers' shares lower and helping propel gold prices to record highs. Futures contracts tracking the U.S. S&P 500 equity benchmark equity index dropped by 1% after the index hit a record high in the previous session. Shares in artificial intelligence chipmaker Nvidia , fell 3.1% in pre-market trading after a rocky Asian session for Taiwan's TSMC, which closed 2.4% lower. The Netherlands' ASML, the largest equipment supplier to chipmakers, dropped as much as 7.7% in European morning trade. MSCI's broad index of world shares. was flat. The tech mood soured after Trump questioned U.S. support for Taiwan in an interview with Bloomberg Businessweek, saying the closely monitored island that China claims as its own territory should pay for U.S. protection. U.S. and Taiwanese officials have claimed for many years that a Chinese invasion of Taiwan would heavily disrupt global trade and high-tech supply chains. Before Wednesday, markets had formed a cautiously optimistic view of a second presidency for Republican property tycoon Trump, who political betting sites tip to beat incumbent Democrat Joe Biden in the November 5 battle for the White House. "Many strategists have suggested (Trump) is bullish for equities, and I'm just not sure about that," said Benjamin Melman, global chief investment officer at Edmond de Rothschild Asset Management. "In terms of risk premium, today the market is adding a clearer reading." While Trump's plans for Taiwan remain unclear, he has already signalled reduced U.S. support for strategic allies by picking Ohio Senator J.D. Vance, who opposes military aid for Ukraine, as his running mate. In foreign exchange markets the dollar lost more than 1% against the yen as fresh data from the Bank of Japan suggested Tokyo was spending heavily on buying the currency to drag it off multi-decade lows. The currency pair traded at 156.4 yen per dollar, having last week crossed the 160 mark that investors view as Japanese authorities' trigger for intervention. Sterling touched a year-high of $1.3032 after data on Wednesday showed the annual rate of British inflation held at 2% in June against forecasts for a 1.9% increase and traders pared back their bets for a Bank of England rate cut in August. Spot gold rose 0.2% to an all-time high of $2,473/29 per ounce on haven buying, and as increased expectations for U.S. interest rate cuts added to the pressure on the dollar. Commonwealth Bank of Australia commodity strategist Vivek Dhar said the gold price may even overshoot his existing target price of $2,500/oz by the end of the year. Fed funds futures have fully priced a U.S. rate cut for September, followed by two more before the end of January 2025. he had more confidence that consumer prices were coming under control. Ten-year Treasury yields were little changed on the day at 4.173%, around a four-month low. Two-year yields edged up to 4.461%. Germany's 10-year bund yield, a benchmark for European debt markets, was close to its lowest in three weeks at 2.42%. Bond yields fall as prices rise. Elsewhere, oil prices were steady, with Brent crude futures 0.2% higher at $83.94 barrel and U.S. crude futures gaining 0.4% to trade at $81.10. (Editing by Sam Holmes, Kim Coghill, Arun Koyyur and Gareth Jones)

Stocks dive on prospect of US trade curbs; yen jumps

A reduction by September is still seen as a 98% probability, according to CME Group's FedWatch tool. The benchmark S&P 500 equity benchmark index lost 50.70 points, or 0.90%, to 5,616.01, while the tech-heavy Nasdaq Composite lost 323.94 points, or 1.72%, to 18,185.40. Chipmaker stocks slumped on a report that the United States is mulling restricting imports of technology to China, coupled with lukewarm messages from Republican presidential nominee Donald Trump about defending key production hub Taiwan. Robert Pavlik, senior portfolio manager at Dakota Wealth, said he had taken some profits in tech. "I'm still optimistic that the market is not as expensive as maybe it's feared, but that's because we're so overbought that some near-term selling pressure is likely to develop," Pavlik added. MSCI's gauge of global stocks fell 4.16 points, or 0.50%, to 827.13. Shares of artificial intelligence chipmaker Nvidia, fell nearly 6% in early trading after a rocky Asian session for Taiwan's TSMC, which closed 2.4% lower. Investors earlier this week had formed a cautiously optimistic view of a second U.S. presidency for Trump, who is running against incumbent Democrat Joe Biden. "Many strategists have suggested (Trump) is bullish for equities, and I'm just not sure about that," said Benjamin Melman, global chief investment officer at Edmond de Rothschild Asset Management. YEN JUMPS The yen has posted several outsized moves in recent days, appreciating sharply on Thursday and Friday from 38-year lows of 161.96 per dollar, sudden rallies that market participants said had the signs of currency intervention. Bank of Japan data released on Tuesday suggested Tokyo may have spent 2.14 trillion yen ($13.5 billion) intervening on Friday. Combined with the estimated amount spent on Thursday, Japan is suspected to have bought nearly 6 trillion yen via intervention last week. The dollar index, which measures the greenback against a basket of currencies, fell 0.49% at 103.70, with the euro up 0.39% at $1.0939. Against the Japanese yen, the dollar weakened 1.32% to 156.3. The weaker dollar boosted demand for precious metal, propelling spot gold to an all-time high of $2,477.38 an ounce. Gold, priced in dollars, has a strong inverse relationship with the U.S. currency, as well as Treasury yields. The yield on benchmark U.S. 10-year notes rose 0.6 basis points to 4.173%, from 4.167% late on Tuesday. Softer jobs data and easing inflation has brought Treasury yields down this month by boosting the odds of the impending rate cut. Elsewhere, oil prices gained, with U.S. crude 1.75% higher at $82.17 a barrel. Brent rose to $84.75 per barrel, up 1.22% on the day. [O/R] (Additional reporting by Chuck Mikolajczak and Caroline Valetkevitch, Editing by Sam Holmes, Kim Coghill, Arun Koyyur, Will Dunham and Gareth Jones)

Trade fears hamper tech stocks, dollar falls amid rate cut talk

NEW YORK, July 17 (Reuters) - Possible U.S. trade curbs on chip equipment weighed on tech stocks in global equity indexes on Wednesday, while Treasury yields and the dollar eased as top Federal Reserve officials indicating they were getting closer to cutting interest rates. The Japanese yen rose sharply in a move suspected to be the result of the latest in a series of interventions from officials in Tokyo to lift the currency from multi-decade lows. A rate reduction by September is seen as having a 98% probability, according to CME Group's FedWatch tool. Lowering rates is generally seen as a way to stoke economic growth. "We are hearing a choral change in Fed speakers preparing the markets for a rate cut beginning in the later part of Q3," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. Among the comments, Fed Governor Christopher Waller and New York Fed President John Williams both noted the shortening horizon toward looser monetary policy. The benchmark S&P 500 equity index lost 69.64 points, or 1.23%, to 5,597.45 and the tech-heavy Nasdaq Composite lost 469.10 points, or 2.54%, to 18,039.74. Chipmaker stocks slumped on a report that the United States is mulling restricting imports of technology to China, coupled with Republican presidential candidate Donald Trump saying key production hub Taiwan should pay the U.S. for its defense. MSCI's gauge of global stocks fell 6.52 points, or 0.79%, to 824.69. Shares of artificial intelligence chipmaker Nvidia, fell more than 6% after a rocky Asian session for Taiwan's TSMC , which closed 2.4% lower. Investors earlier this week had formed a cautiously optimistic view of a second U.S. presidency for Trump, who is running against incumbent Democrat Joe Biden. "Many strategists have suggested (Trump) is bullish for equities, and I'm just not sure about that," said Benjamin Melman, global chief investment officer at Edmond de Rothschild Asset Management. The yen has posted several outsized moves in recent days, appreciating sharply on Thursday and Friday from 38-year lows of 161.96 per dollar, sudden rallies that market participants said had the signs of currency intervention. Bank of Japan data released on Tuesday suggested Tokyo may have spent 2.14 trillion yen ($13.5 billion) intervening on Friday. Combined with the estimated amount spent on Thursday, Japan is suspected to have bought nearly 6 trillion yen via intervention last week. The dollar index, which measures the greenback against a basket of currencies, fell 0.45% at 103.74, with the euro up 0.36% at $1.0936. Against the yen, the dollar weakened 1.36% to 156.19. The weaker dollar boosted demand for precious metal. Spot gold dropped 0.5% to $2,456.25 an ounce due to profit-taking after hitting an all-time high of $2,482.29 earlier in the session. Gold, priced in dollars, has a strong inverse relationship with the U.S. currency, as well as Treasury yields. The yield on benchmark U.S. 10-year notes dipped 1.5 basis points to 4.152%, from 4.167% late on Tuesday. Softer jobs data and easing inflation has brought Treasury yields down this month by boosting the odds of the impending rate cut. Oil prices gained. U.S. crude settled at $82.85 a barrel, up 2.59% on the day. (Additional reporting by Chuck Mikolajczak and Caroline Valetkevitch, Editing by Sam Holmes, Kim Coghill, Arun Koyyur, Will Dunham and Gareth Jones)

Trump's Taiwan talk rattles Wall Street as chip stocks tumble

Geopolitical risks weighed on Wall Street on Wednesday after U.S. presidential candidate Donald Trump sounded lukewarm about defending Taiwan, sending chipmakers' shares lower and helping propel gold prices to record highs. Futures contracts tracking the U.S. S&P 500 equity benchmark equity index dropped by 1% after the index hit a record high in the previous session. Shares in artificial intelligence chipmaker Nvidia , fell 3.1% in pre-market trading after a rocky Asian session for Taiwan's TSMC, which closed 2.4% lower. The Netherlands' ASML, the largest equipment supplier to chipmakers, dropped as much as 7.7% in European morning trade. MSCI's broad index of world shares. was flat. The tech mood soured after Trump questioned U.S. support for Taiwan in an interview with Bloomberg Businessweek, saying the closely monitored island that China claims as its own territory should pay for U.S. protection. U.S. and Taiwanese officials have claimed for many years that a Chinese invasion of Taiwan would heavily disrupt global trade and high-tech supply chains. Before Wednesday, markets had formed a cautiously optimistic view of a second presidency for Republican property tycoon Trump, who political betting sites tip to beat incumbent Democrat Joe Biden in the November 5 battle for the White House. "Many strategists have suggested (Trump) is bullish for equities, and I'm just not sure about that," said Benjamin Melman, global chief investment officer at Edmond de Rothschild Asset Management. "In terms of risk premium, today the market is adding a clearer reading." While Trump's plans for Taiwan remain unclear, he has already signalled reduced U.S. support for strategic allies by picking Ohio Senator J.D. Vance, who opposes military aid for Ukraine, as his running mate. CURRENCY SWINGS In foreign exchange markets the dollar lost more than 1% against the yen as fresh data from the Bank of Japan suggested Tokyo was spending heavily on buying the currency to drag it off multi-decade lows. The currency pair traded at 156.4 yen per dollar, having last week crossed the 160 mark that investors view as Japanese authorities' trigger for intervention. Sterling touched a year-high of $1.3032 after data on Wednesday showed the annual rate of British inflation held at 2% in June against forecasts for a 1.9% increase and traders pared back their bets for a Bank of England rate cut in August. Spot gold rose 0.2% to an all-time high of $2,473/29 per ounce on haven buying, and as increased expectations for U.S. interest rate cuts added to the pressure on the dollar. Gold, priced in dollars, has a strong inverse relationship with the U.S. currency, as well as Treasury yields. Commonwealth Bank of Australia commodity strategist Vivek Dhar said the gold price may even overshoot his existing target price of $2,500/oz by the end of the year. Fed funds futures have fully priced a U.S. rate cut for September, followed by two more before the end of January 2025. Federal Reserve Chair Jerome Powell on Monday said he had more confidence that consumer prices were coming under control. Ten-year Treasury yields were little changed on the day at 4.173%, around a four-month low. Two-year yields edged up to 4.461%. Germany's 10-year bund yield, a benchmark for European debt markets, was close to its lowest in three weeks at 2.42%. Bond yields fall as prices rise. Elsewhere, oil prices were steady, with Brent crude futures 0.2% higher at $83.94 barrel and U.S. crude futures gaining 0.4% to trade at $81.10. (Editing by Sam Holmes, Kim Coghill, Arun Koyyur and Gareth Jones)

Trade fears hamper tech stocks, dollar falls amid rate cut talk

A rate reduction by September is seen as having a 98% probability, according to CME Group's FedWatch tool. Lowering rates is generally seen as a way to stoke economic growth. "We are hearing a choral change in Fed speakers preparing the markets for a rate cut beginning in the later part of Q3," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. Among the comments, Fed Governor Christopher Waller and New York Fed President John Williams both noted the shortening horizon toward looser monetary policy. The benchmark S&P 500 equity index lost 69.64 points, or 1.23%, to 5,597.45 and the tech-heavy Nasdaq Composite lost 469.10 points, or 2.54%, to 18,039.74. Chipmaker stocks slumped on a report that the United States is mulling restricting imports of technology to China, coupled with Republican presidential candidate Donald Trump saying key production hub Taiwan should pay the U.S. for its defense. Shares of artificial intelligence chipmaker Nvidia, fell more than 6% after a rocky Asian session for Taiwan's TSMC, which closed 2.4% lower. Investors earlier this week had formed a cautiously optimistic view of a second U.S. presidency for Trump, who is running against incumbent Democrat Joe Biden. "Many strategists have suggested (Trump) is bullish for equities, and I'm just not sure about that," said Benjamin Melman, global chief investment officer at Edmond de Rothschild Asset Management. The yen has posted several outsized moves in recent days, appreciating sharply on Thursday and Friday from 38-year lows of 161.96 per dollar, sudden rallies that market participants said had the signs of currency intervention. Bank of Japan data released on Tuesday suggested Tokyo may have spent 2.14 trillion yen ($13.5 billion) intervening on Friday. Combined with the estimated amount spent on Thursday, Japan is suspected to have bought nearly 6 trillion yen via intervention last week. The dollar index, which measures the greenback against a basket of currencies, fell 0.45% at 103.74, with the euro up 0.36% at $1.0936. Against the yen, the dollar weakened 1.36% to 156.19. The weaker dollar boosted demand for precious metal. Spot gold dropped 0.5% to $2,456.25 an ounce due to profit-taking after hitting an all-time high of $2,482.29 earlier in the session. Gold, priced in dollars, has a strong inverse relationship with the U.S. currency, as well as Treasury yields. The yield on benchmark U.S. 10-year notes dipped 1.5 basis points to 4.152%, from 4.167% late on Tuesday. Softer jobs data and easing inflation has brought Treasury yields down this month by boosting the odds of the impending rate cut. Oil prices gained. U.S. crude settled at $82.85 a barrel, up 2.59% on the day. (Additional reporting by Chuck Mikolajczak and Caroline Valetkevitch, Editing by Sam Holmes, Kim Coghill, Arun Koyyur, Will Dunham and Gareth Jones)

Trump's Taiwan talk rattles Wall Street as chip stocks tumble

Republican presidential candidate Donald Trump looks on at the conclusion of the second day of the 2024 Republican National Convention at the Fiserv Forum in Milwaukee, Wisconsin, on Tuesday. AFP Geopolitical risks weighed on Wall Street on Wednesday after US presidential candidate Donald Trump sounded lukewarm about defending Taiwan, sending chipmakers' shares lower and helping propel gold prices to record highs. Futures contracts tracking the U.S. S&P 500 equity benchmark equity index dropped by 1% after the index hit a record high in the previous session. Shares in artificial intelligence chipmaker Nvidia , fell 3.1% in pre-market trading after a rocky Asian session for Taiwan's TSMC, which closed 2.4% lower. The Netherlands' ASML, the largest equipment supplier to chipmakers, dropped as much as 7.7% in European morning trade. MSCI's broad index of world shares. was flat. The tech mood soured after Trump questioned US support for Taiwan in an interview with Bloomberg Businessweek, saying the closely monitored island that China claims as its own territory should pay for US protection. US and Taiwanese officials have claimed for many years that a Chinese invasion of Taiwan would heavily disrupt global trade and high-tech supply chains. Before Wednesday, markets had formed a cautiously optimistic view of a second presidency for Republican property tycoon Trump, who political betting sites tip to beat incumbent Democrat Joe Biden in the November 5 battle for the White House. "Many strategists have suggested (Trump) is bullish for equities, and I'm just not sure about that," said Benjamin Melman, global chief investment officer at Edmond de Rothschild Asset Management. "In terms of risk premium, today the market is adding a clearer reading." While Trump's plans for Taiwan remain unclear, he has already signalled reduced US support for strategic allies by picking Ohio Senator J.D. Vance, who opposes military aid for Ukraine, as his running mate.