Global Markets React to BOJ Rate Hike as Attention Shifts to Fed and Earnings

Stocks rise, yen gains as BOJ hikes rates; Fed in focus

In the United States, Nasdaq futures jumped over 1.5% after a bullish forecast from Advanced Micro Devices bolstered struggling chip stocks. The Fed is seen as leaving rates unchanged, but also indicating that a reduction in borrowing costs could come as soon as September. It has kept its policy rate in the 5.25%-5.50% range for the past year. Oil prices rose from seven-week lows on escalating tension in the Middle East after Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in the Iranian capital Tehran. The assassination drew threats of revenge on Israel in a region shaken by the war in Gaza and a deepening conflict in Lebanon.[O/R] The reaction from markets to the BOJ news was choppy. The yen recovered slight losses and was last up 1.6% at 150.42 a dollar, reaching its highest since early April and set for its first month of gains this year. [FRX/] "The decision itself was somewhat surprising," said Erik Nelson, macro strategist at Wells Fargo. "The actual market pricing for further rises is not actually moving all that much... I think the FX reaction is in excess of the rates (bond yields) reaction." In Europe, bond yields hit multi-month lows on expectations of more global monetary easing this year, even as euro zone inflation unexpectedly rose in July. Investors - many jittery about the AI frenzy and tech valuations - were also assessing contrasting results from Microsoft and chipmaker AMD that suggested a divide in the AI landscape. AMD soared over 9% in premarket trading after it increased its 2024 forecast for artificial-intelligence-chip sales. That in turned boosted chip stocks from Nvidia to Intel. Markets are fully pricing in a Fed rate cut of 25 basis points (bps) in September, with roughly 68 bps of easing priced in for the year. Still, some analysts expect the Fed to stay cautious as the labour market is still tight. The dollar index, which measures the U.S. currency against six rivals, was at 104.39 and is down over 1% in July. In currencies, the British pound held steady versus the dollar but headed for its biggest one-day drop against the yen in nearly three months after the BOJ rate hike. Sterling was trading at $1.28 and was on course for a 1.5% monthly gain against the dollar. Investors were focused on the Bank of England's interest rate decision on Thursday, which is surrounded by greater uncertainty than usual as policymakers have not spoken publicly for more than two months due to Britain's election in early July. In commodities, U.S. crude was 3% higher at $76.94 per barrel and Brent was at $80.60 per barrel, up 2.5% on the day. [O/R] (Reporting by Tom Wilson in London, additional reporting by Harry Robertson in London and Ankur Banerjee in Singapore; Editing by Clarence Fernandez, Mark Potter and Toby Chopra)

Stocks rise, yen gains as BOJ hikes rates; Fed in focus

Shares rose on Wednesday after the Bank of Japan raised interest rates in a mostly unexpected hawkish pivot that sparked gains for the Japanese yen, with investors also focused on a U.S. interest-rate decision by the Federal Reserve. The BOJ also unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus. Its decision takes its short-term policy rate to 0.25%, levels unseen since 2008. The Euro STOXX 600 gained almost 1%, also helped by a slew of corporate updates. MSCI's broadest index of Asia-Pacific shares outside Japan added 1.2%, with Japan's benchmark Nikkei closing up 1.5% at its highest for a week. jumped over 1.5% after a bullish forecast from Advanced Micro Devices bolstered struggling chip stocks. , but also indicating that a reduction in borrowing costs could come as soon as September. It has kept its policy rate in the 5.25%-5.50% range for the past year. Oil prices rose from seven-week lows on escalating tension in the Middle East after Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in the Iranian capital Tehran. The assassination drew threats of revenge on Israel in a region shaken by the war in Gaza and a deepening conflict in Lebanon. The reaction from markets to the BOJ news was choppy. The yen recovered slight losses and was last up 1.6% at 150.42 a dollar, reaching its highest since early April and set for its first month of gains this year. Yields on Japanese government bonds were lower. "The decision itself was somewhat surprising," said Erik Nelson, macro strategist at Wells Fargo. "The actual market pricing for further rises is not actually moving all that much... I think the FX reaction is in excess of the rates (bond yields) reaction." hit multi-month lows on expectations of more global monetary easing this year, even as euro zone inflation Investors - many jittery about the AI frenzy and tech valuations - were also assessing contrasting results from Microsoft and chipmaker AMD that suggested a divide in the AI landscape. AMD soared over 9% in premarket trading after it increased its 2024 forecast for artificial-intelligence-chip sales. That in turned boosted chip stocks from Nvidia to Intel. Markets are fully pricing in a Fed rate cut of 25 basis points (bps) in September, with roughly 68 bps of easing priced in for the year. Still, some analysts expect the Fed to stay cautious as the labour market is still tight. The dollar index, which measures the U.S. currency against six rivals, was at 104.39 and is down over 1% in July. In currencies, the British pound held steady versus the dollar but headed for its biggest one-day drop against the yen in nearly three months after the BOJ rate hike. Sterling was trading at $1.28 and was on course for a 1.5% monthly gain against the dollar. Investors were focused on the Bank of England's interest rate decision on Thursday, which is surrounded by greater uncertainty than usual as policymakers have not spoken publicly for more than two months due to Britain's election in early July. In commodities, U.S. crude was 3% higher at $76.94 per barrel and Brent was at $80.60 per barrel, up 2.5% on the day. (Reporting by Tom Wilson in London, additional reporting by Harry Robertson in London and Ankur Banerjee in Singapore; Editing by Clarence Fernandez, Mark Potter and Toby Chopra)

Stocks rise, yen gains after BoJ move; earnings and Fed in focus

NEW YORK/LONDON, July 31 (Reuters) - MSCI'S global equities index rallied on Wednesday while the yen jumped after the Bank of Japan raised interest rates and investors waited for a U.S. interest rate decision from the Federal Reserve. The Fed is expected to end its meeting later on Wednesday leaving rates unchanged , but also indicating that a reduction in borrowing costs could come as soon as September. It has kept its policy rate in the 5.25%-5.50% range for the past year. The yen hit a four-month high against the dollar after Japan's central bank indicated that more hikes may follow and unveiled a detailed plan to slow its massive bond buying. The hike put its short-term rate at 0.25%, a level unseen since 2008. In U.S. Treasuries, yields were mostly lower after economic data indicated a slowing in the labor market and wage growth cemented expectations for a rate cut signal from the Fed. Investors - jittery about an AI frenzy that has led to soaring tech valuations - were also digesting contrasting Microsoft and chipmaker AMD results. AMD soared 7% after it increased its 2024 forecast for artificial-intelligence-chip sales. That in turned boosted chip stocks from Nvidia, up 10% to Intel. "We're seeing a nice bounce this morning. A lot of it is being driven by tech," said Emily Roland, Co-Chief Investment Strategist at John Hancock Investment Management. For tech strength, Roland pointed to earnings commentary as well as a report that a Biden administration plan restricting exports of chip manufacturing equipment to China would exclude shipments from allies that export key chip making equipment - including Japan, the Netherlands and South Korea. "Today is like the Olympics for the market. Because we're getting so much data not only from a macro perspective, central bank moves, we're also getting earnings reports. So there's a lot of different things being thrown at us and then we'll find out later the language the Fed decides to use and what impact that might have on risk assets," said Roland. On Wall Street at around 11:27 a.m. the Dow Jones Industrial Average rose 228.32 points, or 0.55%, to 40,971.65, the S&P 500 gained 91.78 points, or 1.69%, to 5,528.22 and the Nasdaq Composite gained 429.62 points, or 2.53%, to 17,581.77. MSCI's gauge of stocks across the globe rose 13.34 points, or 1.66%, to 814.74. Europe's STOXX 600 index rose 0.79% to 518.14. , while the dollar was broadly lower before the Fed meeting the yen was the biggest mover after the BoJ news. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.28% to 104.16, with the euro up 0.06% at $1.0821. Against the Japanese yen, the dollar weakened 1.45% to 150.55. "A lot of market participants were preparing for this as if it was a possibility, but very few actually expected the BOJ to raise more than 10 basis points," said Helen Given, FX trader at Monex USA in Washington. "This upside surprise is giving the yen a huge boost, especially because people think that the Fed might start telegraphing this afternoon for a cut in September," Given said. Sterling strengthened 0.06% to $1.2842 as investors awaited the Bank of England's interest rate decision due on Thursday, with some uncertainty as policymakers have not spoken publicly for more than two months due to Britain's election. In bonds, the yield on benchmark U.S. 10-year notes fell 3.6 basis points from 4.141% late on Tuesday. The 30-year bond yield fell 4.8 basis points to 4.3508%. The 2-year note yield, which typically moves in step with interest rate expectations, fell 0.5 basis points to 4.3543%, from 4.359% late on Tuesday. In energy, oil prices rallied from seven-week lows on escalating tension in the Middle East after Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in the Iranian capital Tehran. The assassination drew threats of revenge against Israel in a region already shaken by the war in Gaza and a deepening conflict in Lebanon. U.S. crude gained 3.1% to $77.05 a barrel and Brent rose to $80.53 per barrel, up 2.42% on the day. were advancing on the day and were on track to register their biggest monthly percentage gain since March, led by geopolitical concerns and hopes of an interest rate cut in September as focus shifted to the U.S. Federal Reserve's upcoming policy decision. Spot gold added 0.53% to $2,421.13 an ounce. U.S. gold futures gained 0.67% to $2,421.20 an ounce. (Reporting by Sinéad Carew in New York, Tom Wilson in London, additional reporting by Harry Robertson in London and Ankur Banerjee in Singapore; Editing by Clarence Fernandez, Mark Potter, Toby Chopra and Gareth Jones)

Stocks rise, yen gains as BOJ hikes rates; Fed in focus

Shares rose on Wednesday after the Bank of Japan raised interest rates in a mostly unexpected hawkish pivot that sparked gains for the Japanese yen, with investors also focused on a U.S. interest-rate decision by the Federal Reserve. The BOJ also unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus. Its decision takes its short-term policy rate to 0.25%, levels unseen since 2008. The Euro STOXX 600 gained almost 1%, also helped by a slew of corporate updates. MSCI's broadest index of Asia-Pacific shares outside Japan added 1.2%, with Japan's benchmark Nikkei closing up 1.5% at its highest for a week. In the United States, Nasdaq futures jumped over 1.5% after a bullish forecast from Advanced Micro Devices bolstered struggling chip stocks. The Fed is seen as leaving rates unchanged, but also indicating that a reduction in borrowing costs could come as soon as September. It has kept its policy rate in the 5.25%-5.50% range for the past year. Oil prices rose from seven-week lows on escalating tension in the Middle East after Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in the Iranian capital Tehran. The assassination drew threats of revenge on Israel in a region shaken by the war in Gaza and a deepening conflict in Lebanon. The reaction from markets to the BOJ news was choppy. The yen recovered slight losses and was last up 1.6% at 150.42 a dollar, reaching its highest since early April and set for its first month of gains this year. Yields on Japanese government bonds were lower. "The decision itself was somewhat surprising," said Erik Nelson, macro strategist at Wells Fargo. "The actual market pricing for further rises is not actually moving all that much... I think the FX reaction is in excess of the rates (bond yields) reaction." In Europe, bond yields hit multi-month lows on expectations of more global monetary easing this year, even as euro zone inflation unexpectedly rose in July. Investors - many jittery about the AI frenzy and tech valuations - were also assessing contrasting results from Microsoft and chipmaker AMD that suggested a divide in the AI landscape. AMD soared over 9% in premarket trading after it increased its 2024 forecast for artificial-intelligence-chip sales. That in turned boosted chip stocks from Nvidia to Intel. FED AWAITED Markets are fully pricing in a Fed rate cut of 25 basis points (bps) in September, with roughly 68 bps of easing priced in for the year. Still, some analysts expect the Fed to stay cautious as the labour market is still tight. The dollar index, which measures the U.S. currency against six rivals, was at 104.39 and is down over 1% in July. In currencies, the British pound held steady versus the dollar but headed for its biggest one-day drop against the yen in nearly three months after the BOJ rate hike. Sterling was trading at $1.28 and was on course for a 1.5% monthly gain against the dollar. Investors were focused on the Bank of England's interest rate decision on Thursday, which is surrounded by greater uncertainty than usual as policymakers have not spoken publicly for more than two months due to Britain's election in early July. In commodities, U.S. crude was 3% higher at $76.94 per barrel and Brent was at $80.60 per barrel, up 2.5% on the day. (Reporting by Tom Wilson in London, additional reporting by Harry Robertson in London and Ankur Banerjee in Singapore; Editing by Clarence Fernandez, Mark Potter and Toby Chopra)

Stocks rise, yen gains after BoJ move; earnings and Fed in focus

In U.S. Treasuries, yields were mostly lower after economic data indicated a slowing in the labor market and wage growth cemented expectations for a rate cut signal from the Fed. Investors - jittery about an AI frenzy that has led to soaring tech valuations - were also digesting contrasting Microsoft and chipmaker AMD results. AMD soared 7% after it increased its 2024 forecast for artificial-intelligence-chip sales. That in turned boosted chip stocks from Nvidia, up 10% to Intel. "We're seeing a nice bounce this morning. A lot of it is being driven by tech," said Emily Roland, Co-Chief Investment Strategist at John Hancock Investment Management. For tech strength, Roland pointed to earnings commentary as well as a report that a Biden administration plan restricting exports of chip manufacturing equipment to China would exclude shipments from allies that export key chip making equipment - including Japan, the Netherlands and South Korea. "Today is like the Olympics for the market. Because we're getting so much data not only from a macro perspective, central bank moves, we're also getting earnings reports. So there's a lot of different things being thrown at us and then we'll find out later the language the Fed decides to use and what impact that might have on risk assets," said Roland. On Wall Street at around 11:27 a.m. the Dow Jones Industrial Average rose 228.32 points, or 0.55%, to 40,971.65, the S&P 500 gained 91.78 points, or 1.69%, to 5,528.22 and the Nasdaq Composite gained 429.62 points, or 2.53%, to 17,581.77. MSCI's gauge of stocks across the globe rose 13.34 points, or 1.66%, to 814.74. Europe's STOXX 600 index rose 0.79% to 518.14. In currencies, while the dollar was broadly lower before the Fed meeting the yen was the biggest mover after the BoJ news. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.28% to 104.16, with the euro up 0.06% at $1.0821. "A lot of market participants were preparing for this as if it was a possibility, but very few actually expected the BOJ to raise more than 10 basis points," said Helen Given, FX trader at Monex USA in Washington. "This upside surprise is giving the yen a huge boost, especially because people think that the Fed might start telegraphing this afternoon for a cut in September," Given said. Sterling strengthened 0.06% to $1.2842 as investors awaited the Bank of England's interest rate decision due on Thursday, with some uncertainty as policymakers have not spoken publicly for more than two months due to Britain's election. In bonds, the yield on benchmark U.S. 10-year notes fell 3.6 basis points from 4.141% late on Tuesday. The 30-year bond yield fell 4.8 basis points to 4.3508%. The 2-year note yield, which typically moves in step with interest rate expectations, fell 0.5 basis points to 4.3543%, from 4.359% late on Tuesday. In energy, oil prices rallied from seven-week lows on escalating tension in the Middle East after Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in the Iranian capital Tehran. The assassination drew threats of revenge against Israel in a region already shaken by the war in Gaza and a deepening conflict in Lebanon.[O/R] U.S. crude gained 3.1% to $77.05 a barrel and Brent rose to $80.53 per barrel, up 2.42% on the day. Gold prices were advancing on the day and were on track to register their biggest monthly percentage gain since March, led by geopolitical concerns and hopes of an interest rate cut in September as focus shifted to the U.S. Federal Reserve's upcoming policy decision. Spot gold added 0.53% to $2,421.13 an ounce. U.S. gold futures gained 0.67% to $2,421.20 an ounce. (Reporting by Sinéad Carew in New York, Tom Wilson in London, additional reporting by Harry Robertson in London and Ankur Banerjee in Singapore; Editing by Clarence Fernandez, Mark Potter, Toby Chopra and Gareth Jones)

Stocks rise, yen gains after BOJ hikes rates

European shares followed Asian indexes higher on Wednesday after the Bank of Japan raised interest rates in a mostly unexpected hawkish pivot, sparking gains for the Japanese yen. The BOJ also unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus. Its decision takes its short-term policy rate to 0.25%, levels unseen since 2008. The Euro STOXX 600 gained almost 1%, also helped by a slew of corporate updates. MSCI's broadest index of Asia-Pacific shares outside Japan added over 1%, with Japan's benchmark Nikkei closing up 1.5% at its highest for a week. il prices rose from seven-week lows on escalating tension in the Middle East after Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in the Iranian capital Tehran. "The BOJ will hope that the rate rise will be a confidence booster to the economy in that it will signal that the central bank believes the economy is on a path to something approaching 'normal'," said Gary Dugan, CEO of the Global CIO Office. The reaction from markets to the BOJ news was choppy. The yen recovered slight losses and was last up 1% at 151.09 a dollar, reaching its highest since early April and set for its first month of gains this year. On an action-packed Wednesday, central banks dominated investor attention. A Federal Reserve rates decision is due later in the day, with markets expecting the U.S. central bank to stand pat on rates but indicate cuts are on the way. The yields on Japanese government bonds were lower. European bond yields, meanwhile, were at multi-month lows, ahead of euro zone inflation data due later in the day. Investors were also assessing contrasting results from Wall Street stocks were set for gains, with futures gauges showing advances of between 0.2% and 1.5%. Markets are fully pricing in a Fed rate cut of 25 basis points (bps) in September, with roughly 68 bps of easing priced in for the year. The dollar index, which measures the U.S. currency against six rivals, was at 104.39 and is down over 1% in July. However, some analysts expect the Fed to stay cautious as the labour market is still tight. Investors are jittery about the AI frenzy and tech valuations as results from sector bellwethers reinforced the idea that the payoff in hefty AI investments may take longer than first thought. Disappointing earnings from Microsoft sent its shares lower, along with those of other tech firms, while strong earnings from Advanced Micro Devices spurred a rally in chip stocks. Nasdaq futures rebounded, and were last up 1%. The Australian dollar sank to a three-month low, while stocks soared more than 1% as a soft inflation report squashed lingering speculation that interest rates would have to rise again. In commodities, U.S. crude was 2% higher at $76.24 per barrel and Brent was at $80 per barrel, up 1.74% on the day. (Reporting by Ankur Banerjee; Editing by Clarence Fernandez and Mark Potter; Editing by Toby Chopra)

Stocks rise, yen gains after BOJ hikes rates

The Euro STOXX 600 gained almost 1%, also helped by a slew of corporate updates. MSCI's broadest index of Asia-Pacific shares outside Japan added over 1%, with Japan's benchmark Nikkei closing up 1.5% at its highest for a week. Separately, oil prices rose from seven-week lows on escalating tension in the Middle East after Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in the Iranian capital Tehran. [O/R] "The BOJ will hope that the rate rise will be a confidence booster to the economy in that it will signal that the central bank believes the economy is on a path to something approaching 'normal'," said Gary Dugan, CEO of the Global CIO Office. The reaction from markets to the BOJ news was choppy. The yen recovered slight losses and was last up 1% at 151.09 a dollar, reaching its highest since early April and set for its first month of gains this year. [FRX/] On an action-packed Wednesday, central banks dominated investor attention. A Federal Reserve rates decision is due later in the day, with markets expecting the U.S. central bank to stand pat on rates but indicate cuts are on the way. The yields on Japanese government bonds were lower. European bond yields, meanwhile, were at multi-month lows, ahead of euro zone inflation data due later in the day. [JP/][.T] Investors were also assessing contrasting results from Microsoft and chipmaker AMD that suggested a divide in the AI landscape. Wall Street stocks were set for gains, with futures gauges showing advances of between 0.2% and 1.5%. FED AWAITED Markets are fully pricing in a Fed rate cut of 25 basis points (bps) in September, with roughly 68 bps of easing priced in for the year. The dollar index, which measures the U.S. currency against six rivals, was at 104.39 and is down over 1% in July. However, some analysts expect the Fed to stay cautious as the labour market is still tight. Investors are jittery about the AI frenzy and tech valuations as results from sector bellwethers reinforced the idea that the payoff in hefty AI investments may take longer than first thought. Disappointing earnings from Microsoft sent its shares lower, along with those of other tech firms, while strong earnings from Advanced Micro Devices spurred a rally in chip stocks. Nasdaq futures rebounded, and were last up 1%. The Australian dollar sank to a three-month low, while stocks soared more than 1% as a soft inflation report squashed lingering speculation that interest rates would have to rise again. [AUD/] In commodities, U.S. crude was 2% higher at $76.24 per barrel and Brent was at $80 per barrel, up 1.74% on the day. [O/R] (Reporting by Ankur Banerjee; Editing by Clarence Fernandez and Mark Potter; Editing by Toby Chopra)

Asian stocks soar; yen volatile as BOJ hikes rates

SINGAPORE, July 31 (Reuters) - Asian stocks rose on Wednesday and the yen was volatile after the Bank of Japan raised interest rates, while investors assessed contrasting results from tech bellwether Microsoft and chipmaker AMD that suggested a divide in the AI landscape. Oil prices rose from seven-week lows on escalating tension in the Middle East after the Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in Iran's capital of Tehran. The BOJ also laid out a detailed plan for quantitative tightening to pare monthly bond buying in stages, to about 3 trillion yen ($19.6 billion) by January-March 2026, as it raised its overnight call rate target to 0.25% from zero to 0.1%. Japan's benchmark Nikkei was down 0.19% in choppy trading, while the yields on Japanese government bonds inched lower after the decision. The yen was volatile, swinging between gains and losses. It was last flat at 152.81 a dollar, but still on course for a gain of more than 5% in July. The yen started the month rooted near 38-year lows of 161.96, weighed down by the wide gap between interest rates in Japan and other developed nations. But factors such as likely official intervention, a sell-off in equities and a reassessment of popular carry trades helped the currrency rebound to a 12-week high last week. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.9% higher, with Chinese shares soaring on Wednesday. Blue-chip stocks were up about 2%, while Hong Kong's Hang Seng was also 2% higher. Data showed China's manufacturing activity shrank for a third month in July, keeping alive expectations that Beijing will need to launch more stimulus as a protracted property crisis and job insecurity hold back growth. Central banks dominate investor attention on Wednesday, with a Federal Reserve decision due later in the day, with markets expecting the U.S. central bank to stand pat on rates but indicate rate cuts are on the way. Investors are jittery about the AI frenzy and tech valuations as results from tech bellwethers reinforced the idea that the payoff in hefty AI investments may take longer than first thought. Disappointing earnings from Microsoft sent its shares lower, along with those of other tech firms, while strong earnings from Advanced Micro Devices spurred a rally in chip stocks. Nasdaq futures rebounded, and were last up 0.7%. While the Fed is widely expected to hold interest rates, the spotlight is squarely on whether it opens the door to a September cut. Markets are fully pricing in a cut of 25 basis points in September, with roughly 68 bps of easing priced in for the year. The dollar index, which measures the U.S. currency against six rivals, was at 104.41 and is down 1.36% for July. However, some analysts expect the Fed to stay cautious as the labour market is still tight. The Australian dollar sank to a three-month low, while stocks soared more than 1% as a soft inflation report squashed lingering speculation that interest rates would have to rise again. In commodities, U.S. crude was 1.65% higher at $75.98 per barrel and Brent was at $79.8 per barrel, up 1.49% on the day. (Reporting by Ankur Banerjee; Editing by Sam Holmes and Clarence Fernandez)

Asian stocks rise; yen volatile as BOJ hikes rates

"The BOJ will hope that the rate rise will be a confidence booster to the economy in that it will signal that the central bank believes the economy is on a path to something approaching 'normal'," said Gary Dugan, CEO of the Global CIO Office. Markets initial reaction was choppy as analysts said media reports ahead of the BOJ decision had set expectations of a rate hike and bond tapering program from the central bank. Japan's benchmark Nikkei was last up 0.10%, while the yields on Japanese government bonds were lower. [JP/] [.T] The yen swung between gains and losses. It was last flat at 152.845 a dollar, but still on course for a gain of more than 5% in July, its first month of gains this year. [FRX/] The yen started the month rooted near 38-year lows of 161.96, weighed down by the wide gap between interest rates in Japan and other developed nations. But factors such as likely official intervention, a sell-off in equities and a reassessment of popular carry trades helped the currency rebound to a 12-week high last week. "Whether we will see further gains (in the yen) now depends on whether Governor Ueda adopts a hawkish tone and offers clear forward guidance at his press conference," said Vasu Menon, managing director of investment strategy at OCBC. "It is hard to see Ueda going full-on hawkish given the recent mixed economic data from Japan." BOJ Governor Kazuo Ueda is expected to hold a news conference at 0630 GMT to explain the decision. Meanwhile, stocks in China soared on Wednesday as investors welcomed a Politburo meeting that stressed the need to boost consumption. Data also showed China's manufacturing activity shrank for a third month in July, keeping alive expectations that Beijing will need to launch more stimulus. Chinese blue-chip stocks were up about 2%, while Hong Kong's Hang Seng was also 2% higher. That took MSCI's broadest index of Asia-Pacific shares outside Japan 1% higher. Futures indicated European bourses were set for a slightly higher open, with Eurostoxx 50 futures up 0.12% and FTSE futures 0.39% higher. FED AWAITED Central banks dominate investor attention on an action-packed Wednesday, with a Federal Reserve decision due later in the day. Markets expect the U.S. central bank to stand pat on rates but indicate rate cuts are on the way. Markets are fully pricing in a cut of 25 basis points (bps) in September, with roughly 68 bps of easing priced in for the year. The dollar index, which measures the U.S. currency against six rivals, was at 104.46 and is down over 1% in July. However, some analysts expect the Fed to stay cautious as the labour market is still tight. Investors are jittery about the AI frenzy and tech valuations as results from tech bellwethers reinforced the idea that the payoff in hefty AI investments may take longer than first thought. Disappointing earnings from Microsoft sent its shares lower, along with those of other tech firms, while strong earnings from Advanced Micro Devices spurred a rally in chip stocks. Nasdaq futures rebounded, and were last up 1%. The Australian dollar sank to a three-month low, while stocks soared more than 1% as a soft inflation report squashed lingering speculation that interest rates would have to rise again. [AUD/] In commodities, U.S. crude was 1.77% higher at $76.05 per barrel and Brent was at $79.82 per barrel, up 1.51% on the day. [O/R] (Reporting by Ankur Banerjee; Editing by Clarence Fernandez and Mark Potter)

Asian stocks soar; yen volatile as BOJ hikes rates

Japan's benchmark Nikkei was down 0.19% in choppy trading, while the yields on Japanese government bonds inched lower after the decision. The yen was volatile, swinging between gains and losses. It was last flat at 152.81 a dollar, but still on course for a gain of more than 5% in July. [FRX/] The yen started the month rooted near 38-year lows of 161.96, weighed down by the wide gap between interest rates in Japan and other developed nations. But factors such as likely official intervention, a sell-off in equities and a reassessment of popular carry trades helped the currrency rebound to a 12-week high last week. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.9% higher, with Chinese shares soaring on Wednesday. Blue-chip stocks were up about 2%, while Hong Kong's Hang Seng was also 2% higher. Data showed China's manufacturing activity shrank for a third month in July, keeping alive expectations that Beijing will need to launch more stimulus as a protracted property crisis and job insecurity hold back growth. Central banks dominate investor attention on Wednesday, with a Federal Reserve decision due later in the day, with markets expecting the U.S. central bank to stand pat on rates but indicate rate cuts are on the way. Investors are jittery about the AI frenzy and tech valuations as results from tech bellwethers reinforced the idea that the payoff in hefty AI investments may take longer than first thought. Disappointing earnings from Microsoft sent its shares lower, along with those of other tech firms, while strong earnings from Advanced Micro Devices spurred a rally in chip stocks. Nasdaq futures rebounded, and were last up 0.7%. FED AWAITED While the Fed is widely expected to hold interest rates, the spotlight is squarely on whether it opens the door to a September cut. Markets are fully pricing in a cut of 25 basis points in September, with roughly 68 bps of easing priced in for the year. The dollar index, which measures the U.S. currency against six rivals, was at 104.41 and is down 1.36% for July. However, some analysts expect the Fed to stay cautious as the labour market is still tight. The Australian dollar sank to a three-month low, while stocks soared more than 1% as a soft inflation report squashed lingering speculation that interest rates would have to rise again. [AUD/] In commodities, U.S. crude was 1.65% higher at $75.98 per barrel and Brent was at $79.8 per barrel, up 1.49% on the day. [O/R] (Reporting by Ankur Banerjee; Editing by Sam Holmes and Clarence Fernandez)

Asian stocks sit tight, yen firms as BOJ beckons

SINGAPORE, July 31 (Reuters) - Asian stocks clung to familiar ranges on Wednesday after contrasting results from tech bellwether Microsoft and chipmaker AMD suggested a divide in the AI landscape while the yen was firm ahead of the Bank of Japan's policy decision. Central banks dominate investor attention on Wednesday, with the decision from the Federal Reserve also due later in the day with markets expecting the U.S. central bank to stand pat on rates but indicate rate cuts are on the way. The BOJ on the other hand is expected to detail plans to taper its huge bond buying on Wednesday and debate whether to raise interest rates. That along with escalating geopolitical tensions in the Middle East kept sentiment in check with the Israeli government claiming it killed Hezbollah's most senior commander in an air strike on Beirut on Tuesday. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.23% higher but on course for a 1.2% decline for the month, snapping a five-month winning streak. Investors remain jittery about the AI frenzy and tech valuations as results from tech bellwethers reinforced the idea that the payoff in hefty AI investments may take longer than first thought. Disappointing earnings from Microsoft sent its shares along with other tech firms lower, while strong earnings from Advanced Micro Devices spurred a rally in chip stocks. Nasdaq futures rebounded and was last up 0.7%. Japan's Nikkei fell 1% in early trading, on course for a 3.7% decline in July, weighed by the yen's ascent. The yen was 0.20% higher at 152.465 per dollar, on course for a 5.5% gain in July, its strongest monthly performance since November 2022. The yen started July rooted near 38-year lows of 161.96 as the wide gap between interest rates in Japan and other developed nations weighed. But a slew of factors including likely official intervention, a sell-off in equities and a reassessment of popular carry trades have helped the yen rebound to a 12-week high hit last week. At the end of its two-day meeting, the BOJ will decide on a quantitative tightening plan that will likely halve monthly bond buying in 1-1/2 to two years' time - a pace roughly in line with dominant market forecasts. But the focus will also be on whether the BOJ will raise rates, with several Japanese media reporting that the bank would consider raising rates, citing unidentified sources. "I think the conundrum is that for the BOJ to signal it is serious about finally starting down the path of tighter monetary policy, just scaling back its bond buying programme is not enough," said Stuart Cole, chief economist at Equiti Capital. Cole said the BOJ may announce plans not to buy as many bonds, but any bond buying is still further loosening monetary policy. "If we get only a tepid scaling back in the bond purchase program and no rate hike, then it will just leave a big sense of disappointment and the yen will sell off again," he said. While the Fed is widely expected to hold interest rates, the spotlight is squarely on whether the central bank opens the door to a September cut. Markets are fully pricing in a 25 basis point cut in September, with roughly 68 bps of easing priced in for the year. The dollar index, which measures the U.S. currency against six rivals, was at 104.41 and is down 1.36% for July. Some analysts though expect the Fed to remain cautious in the face of a still tight labour market. In commodities, U.S. crude was 0.67% higher at $75.23 per barrel and Brent was at $79.02 per barrel, up 0.5% on the day. (Reporting by Ankur Banerjee; Editing by Sam Holmes)

Asian stocks sit tight, yen firms as BOJ beckons

SINGAPORE: Asian stocks clung to familiar ranges on Wednesday after contrasting results from tech bellwether Microsoft and chipmaker AMD suggested a divide in the AI landscape while the yen was firm ahead of the Bank of Japan's policy decision. Central banks dominate investor attention on Wednesday, with the decision from the Federal Reserve also due later in the day with markets expecting the U.S. central bank to stand pat on rates but indicate rate cuts are on the way. The BOJ on the other hand is expected to detail plans to taper its huge bond buying on Wednesday and debate whether to raise interest rates. That along with escalating geopolitical tensions in the Middle East kept sentiment in check with the Israeli government claiming it killed Hezbollah's most senior commander in an air strike on Beirut on Tuesday. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.23% higher but on course for a 1.2% decline for the month, snapping a five-month winning streak. Investors remain jittery about the AI frenzy and tech valuations as results from tech bellwethers reinforced the idea that the payoff in hefty AI investments may take longer than first thought. Disappointing earnings from Microsoft sent its shares along with other tech firms lower, while strong earnings from Advanced Micro Devices spurred a rally in chip stocks. Nasdaq futures rebounded and was last up 0.7%. Japan's Nikkei fell 1% in early trading, on course for a 3.7% decline in July, weighed by the yen's ascent. The yen was 0.20% higher at 152.465 per dollar, on course for a 5.5% gain in July, its strongest monthly performance since November 2022. The yen started July rooted near 38-year lows of 161.96 as the wide gap between interest rates in Japan and other developed nations weighed. But a slew of factors including likely official intervention, a sell-off in equities and a reassessment of popular carry trades have helped the yen rebound to a 12-week high hit last week. At the end of its two-day meeting, the BOJ will decide on a quantitative tightening plan that will likely halve monthly bond buying in 1-1/2 to two years' time - a pace roughly in line with dominant market forecasts. But the focus will also be on whether the BOJ will raise rates, with several Japanese media reporting that the bank would consider raising rates, citing unidentified sources. "I think the conundrum is that for the BOJ to signal it is serious about finally starting down the path of tighter monetary policy, just scaling back its bond buying programme is not enough," said Stuart Cole, chief economist at Equiti Capital. Cole said the BOJ may announce plans not to buy as many bonds, but any bond buying is still further loosening monetary policy. "If we get only a tepid scaling back in the bond purchase program and no rate hike, then it will just leave a big sense of disappointment and the yen will sell off again," he said. FED PIVOT While the Fed is widely expected to hold interest rates, the spotlight is squarely on whether the central bank opens the door to a September cut. Markets are fully pricing in a 25 basis point cut in September, with roughly 68 bps of easing priced in for the year. The dollar index, which measures the U.S. currency against six rivals, was at 104.41 and is down 1.36% for July. Some analysts though expect the Fed to remain cautious in the face of a still tight labour market. In commodities, U.S. crude was 0.67% higher at $75.23 per barrel and Brent was at $79.02 per barrel, up 0.5% on the day. (Reporting by Ankur Banerjee; Editing by Sam Holmes)

Asian stocks sit tight, yen firms as BOJ beckons

The BOJ on the other hand is expected to detail plans to taper its huge bond buying on Wednesday and debate whether to raise interest rates. That along with escalating geopolitical tensions in the Middle East kept sentiment in check with the Israeli government claiming it killed Hezbollah's most senior commander in an air strike on Beirut on Tuesday. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.23% higher but on course for a 1.2% decline for the month, snapping a five-month winning streak. Investors remain jittery about the AI frenzy and tech valuations as results from tech bellwethers reinforced the idea that the payoff in hefty AI investments may take longer than first thought. Disappointing earnings from Microsoft sent its shares along with other tech firms lower, while strong earnings from Advanced Micro Devices spurred a rally in chip stocks. Nasdaq futures rebounded and was last up 0.7%. Japan's Nikkei fell 1% in early trading, on course for a 3.7% decline in July, weighed by the yen's ascent. The yen was 0.20% higher at 152.465 per dollar, on course for a 5.5% gain in July, its strongest monthly performance since November 2022. The yen started July rooted near 38-year lows of 161.96 as the wide gap between interest rates in Japan and other developed nations weighed. But a slew of factors including likely official intervention, a sell-off in equities and a reassessment of popular carry trades have helped the yen rebound to a 12-week high hit last week. At the end of its two-day meeting, the BOJ will decide on a quantitative tightening plan that will likely halve monthly bond buying in 1-1/2 to two years' time - a pace roughly in line with dominant market forecasts. But the focus will also be on whether the BOJ will raise rates, with several Japanese media reporting that the bank would consider raising rates, citing unidentified sources. "I think the conundrum is that for the BOJ to signal it is serious about finally starting down the path of tighter monetary policy, just scaling back its bond buying programme is not enough," said Stuart Cole, chief economist at Equiti Capital. Cole said the BOJ may announce plans not to buy as many bonds, but any bond buying is still further loosening monetary policy. "If we get only a tepid scaling back in the bond purchase program and no rate hike, then it will just leave a big sense of disappointment and the yen will sell off again," he said. FED PIVOT While the Fed is widely expected to hold interest rates, the spotlight is squarely on whether the central bank opens the door to a September cut. Markets are fully pricing in a 25 basis point cut in September, with roughly 68 bps of easing priced in for the year. The dollar index, which measures the U.S. currency against six rivals, was at 104.41 and is down 1.36% for July. Some analysts though expect the Fed to remain cautious in the face of a still tight labour market. In commodities, U.S. crude was 0.67% higher at $75.23 per barrel and Brent was at $79.02 per barrel, up 0.5% on the day. [O/R] (Reporting by Ankur Banerjee; Editing by Sam Holmes)

Asian stocks rise with BOJ in focus; China rebounds on stimulus hopes By Investing.com

Investing.com-- Most Asian stocks rose on Wednesday with Chinese markets rebounding from five-month lows as middling economic data fueled bets on more stimulus measures, with focus now turning to a Bank of Japan meeting. Japanese markets were held back by uncertainty over whether the BOJ will hike interest rates, while Asian technology and chipmaking stocks rallied, tracking strong earnings from Advanced Micro Devices Inc (NASDAQ:AMD). Regional markets brushed off a weak overnight close on Wall Street, with U.S. stock indexes closing lower in anticipation of a Federal Reserve interest rate decision later in the day. But U.S. stock index futures rose in Asian trade, with a rally in chipmaking stocks largely offsetting a decline in heavyweight tech stocks, after Microsoft Corporation (NASDAQ:MSFT) missed some estimates with its June quarter earnings. China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes jumped over 1% each and were the best performers in Asia on Wednesday. Both indexes rebounded from their weakest levels since February, and were nursing steep losses through July. Purchasing managers index data for July showed sustained weakness in business activity, with the manufacturing PMI shrinking for a third straight month. But the reading ramped up bets that Beijing will be forced into unlocking more stimulus measures, especially after the government presented a supportive stance during the Politburo meeting on Tuesday. While the meeting yielded few actual details on the planned stimulus measures, investors took some encouragement from Beijing explicitly stating it will work to improve consumer confidence. Japan's Nikkei 225 index fell 0.4%, while the TOPIX fell 0.1% amid uncertainty over a BOJ meeting, especially with analysts split over a hold or a 10-15 basis point hike. But an end to the central bank's highly stimulative quantitative easing program is widely expected, given that the BOJ had signaled it will provide more details on cutting asset purchases during its July meeting. Reduced QE presents less liquidity for Japanese markets, which could undermine more strength in local stocks. Tech-heavy Asian bourses logged strong gains on Wednesday, with Hong Kong's Hang Seng rallying 1.6%, while South Korea's KOSPI rose 0.5%. Tech stocks- particularly chipmakers, rose tracking strong earnings from AMD, which beat expectations and forecast strong revenue growth on demand from artificial intelligence. But this trend was somewhat offset by middling earnings from Microsoft. While the firm's profit beat expectations, the company's cloud business- which is a barometer for AI demand- clocked slower-than-expected revenue growth. Among broader Asian markets, Australia's ASX 200 index surged 1.3% and came close to a record high after data showed underlying consumer price index inflation grew slightly less than expected in the second quarter. The reading ramped up bets that cooling inflation will keep the Reserve Bank of Australia from raising interest rates any further. Futures for India's Nifty 50 index pointed to a positive open, with the index remaining in sight of record highs above the closely watched 25,000 level.