Dollar Declines, Stocks Ahead of Trade Negotiations, Drift – Asia Market Wrap

Stocks and bonds varied, and the Dollar index was on track for a fourth day of losses as little progress in tariff negotiations and economic concerns about the US drove investors to reduce wagers in a turbulent market.

US equities were mixed, with equity-index futures extending their late Monday rebound after the S&P 500 fell more than 2%. An measure of Dollar strength extended its losses after falling to a 15-month low. The Yen surpassed 140 per Dollar for the first time since September, and gold reached a new high in demand for haven assets. Asian equities were barely changed, but European stock futures indicated a worse open.

On Tuesday, the Dollar resumed its fall against Group of 10 peers. The Yen outperformed all of its G-10 counterparts, as investors sought safe haven assets. The BoJ was said to be on track to continue hiking rates. Meanwhile, as the trade war with the US escalates, China has allowed the Yuan to drop against practically all other currencies in order to assist its economy.

In a hint that governments are striving to negotiate the conflict between the US and China, a high-level Japanese team will deliver a letter from PM Ishiba to Chinese President Xi this week. Beijing previously warned nations against making arrangements with Washington that might harm China.

During meetings in Washington this week, Japan’s finance minister, Kato, said his administration is consulting with other countries on how to best convey widely shared worries about the effects of tariffs. Contrary to how Trump described the talks, Ishiba stated on Monday that Japan will not simply continue to concede to US demands in order to reach a tariff agreement.