Treasuries Gain & Yen Rise as Fed Easing Approaches – Asia Market Wrap

The Yen climbed against the Dollar for the fourth day in a row, as dropping Treasury rates extended an emerging-market currency rally into Asia after new data reinforced views that the Fed will loosen policy.

Stocks moved across the region, with the Yen rising to roughly 141 per dollar, putting pressure on Japan’s export-oriented economy. Benchmarks in Australia and Hong Kong gained as Wall Street posted a fourth day of gains.

The policy-sensitive two-year Treasury yields fell six basis points in Asian trading, weighing on the Dollar as emerging Asian currencies, particularly the Korean won, benefited from a rebound in Latin America.

Thursday’s wholesale inflation figures followed the more closely watched CPI, which indicated that underlying inflation increased in August. However, officials have made it plain that they are currently focused on labour market softening, which is more likely to dominate policy talks in the coming months.

Gold hit a new high on Thursday, boosted by the Dollar’s slide and another set of US statistics showing an increase in unemployment benefit applications.