Yen Weakens whilst Chinese Stocks End 13-Day Rally – Asia Market Wrap

Chinese shares in Hong Kong tumbled as investors paused their world-beating surge over the last month. A weaker Yen boosted Japanese markets, but oil prices rose for the third day in a row amid Middle East tensions.

A barometer of Hong Kong-listed Chinese companies fell as much as 4.9%, capping a 13-day rise fuelled by hopes for steps to bolster the world’s second-largest economy. The Hang Seng Index fell as much as 4.5%, its largest intraday drop in over two years. Markets in mainland China remain closed for Golden Week. US and European stock futures declined.

Japanese stocks soared, with the Topix index climbing more than 1%, after incoming PM Shigeru Ishiba stated on Wednesday that the economy is not ready for another interest rate hike, pushing the Yen down. Japan’s currency fell 0.2% to 146.78 per dollar on Thursday, following a 2% drop the previous day.

The Dollar’s renewed strength added to the pressure on the Yen, as stronger-than-expected ADP jobs data prompted traders to reduce expectations on aggressive Fed rate reduction. Swaps traders were forecasting 33 basis points of policy easing at the central bank’s November meeting, down from 44 basis points just last week.

Oil prices increased as investors awaited Israel’s response to Iran’s missile strike, with Biden asking Israel to refrain from hitting Iran’s nuclear facilities.