By Rae Wee
SINGAPORE (Reuters) – Global stocks started the week on a firmer footing ahead of Nvidia’s much-anticipated earnings release, while in Japan, a speech by its central bank chief left markets clueless about the outlook for country rates.
Bank of Japan Governor Kazuo Ueda reiterated on Monday that the central bank will continue to raise interest rates if economic and price developments are in line with its forecasts, but did not mention whether an increase could occur in December.
His speech had been closely watched by investors looking for clues about the BOJ’s next rate hike, which could have been seen as a way to counter the yen’s weakness.
The Japanese currency has fallen about 7% since October against a resurgent dollar and last week weakened beyond the 156 per dollar level for the first time since July, keeping traders on alert for any intervention by Japanese authorities.
Finally, it fell 0.3% to 154.72 per dollar, reducing some of the losses it suffered while Ueda spoke.
On the possibility of a BOJ hike next month, IG market analyst Tony Sycamore said it would “depend, to some extent, on the dollar/yen ratio.”
“If the dollar/yen rises to around 160, I think that would increase the (chances) of a rate hike. But I think you’re probably not unhappy with the dollar/yen hovering around 150, 152. I think that’s probably going to keep you on the sidelines until next year.
“It’s coming, it’s just a question of when… the Japanese economy is doing well.”
Despite a weaker yen, Japan’s Nikkei fell 0.76%, dragged down by a drop in healthcare stocks.
Meanwhile, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7%.
Similarly, Nasdaq futures gained 0.6%, while S&P 500 futures rose 0.25%.
The highlight for investors this week will be Nvidia’s third-quarter results on Wednesday, where analysts expect the AI chip leader to post an increase in revenue.
Nvidia stock is up nearly 200% this year, and its heavy weighting in the S&P 500 is partially responsible for the index hitting all-time highs this year.
But its dizzying multi-year streak has also raised the bar for earnings outperformance, and a slip could fuel concerns that the market’s hopes for AI have surpassed reality.
Elsewhere, Chinese stocks opened higher on Monday. The blue-chip CSI300 index last gained 1.22%, while the Shanghai Composite Index jumped 1.34%.
Hong Kong’s Hang Seng Index rose 1.5%.
TRUMP AND TARIFFS
U.S. Treasury yields held near multi-month highs on Monday, boosted by bets of less aggressive Federal Reserve interest rate cuts ahead. [US/]