ASIAN STOCKS TALKING POINTS:
- Most Asian stocks were broadly higher, if not by very much
- Investors have reduced expectations of trade talks between China and the US
- The US Dollar remains in the ascendant, weak inflation weighed on the Japanese Yen
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Asian stocks were mixed on Friday afternoon as investors fretted about progress in US/China trade talks. President Donald Trump doubted on Thursday that the high-level contacts would be successful, claiming that US trade partners had become very spoiled.
He spoke on the day a second round of negotiations began in Washington.
The Nikkei 225 was up 0.4% with the ASX 200 off by 0.2%. All other regional indexes were higher, if not by very much.
Rising US yields continued to lift the US Dollar. Expectations of still-higher US interest rates have taken the ten-year benchmark’s yield up to near seven-year highs. More weak inflation data out of Japan weighed on the Yen, which sank to four-month lows against the Dollar. The prospect of any removal of Japan’s extraordinary stimulus seems as remote as ever.
USD/JPY remains very well supported and has now passed the February highs which had capped its advance this week.
If the US Dollar can close above them then only a cluster of resistance from late January stands between the bulls and this year’s peaks.
Gold prices were steady through the Asian session, with oil inching up a little in the face of ongoing production cuts, reports of strong demand and US sanctions on Iran.
There’s not a huge amount on the data calendar for markets to get their teeth into on Friday. Canadian consumer price data may attract some attention.
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— Written by David Cottle, DailyFX Research
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