Global equities continued to rise from the risk-on mood prevailing the markets since Tuesday as European and US stock markets closed up sharply for a second day. In Asia, the Nikkei 225 index added another 3.2% today as the yen slid further versus the US dollar.
The greenback made modest gains in Thursday’s Asian trading to climb to 109.42 yen, following a 0.7% jump yesterday against the Japanese currency. Meanwhile, the Bank of Japan’s governor, Haruhiko Kuroda, repeated on Wednesday the bank’s readiness to ease again if inflation expectations showed signs of weakening, and that the adoption of negative rates did not mean it was shifting its policy focus away from asset purchases.
The Australian and New Zealand dollars were weaker on Thursday on a combination of dollar strength and lower crude oil prices. The Aussie had dropped to 0.7618 versus the greenback before receiving a lift from better-than-expected unemployment data. The jobless rate in Australia fell unexpectedly from 5.8% to 5.7% in March, confounding expectations of a rise to 5.9%. This was the lowest rate in since September 2013. The Aussie rebounded slightly to around 0.7650 after the data.
The New Zealand dollar, however, extended yesterday’s losses to fall sharply in today’s Asian trading. The kiwi was weighed down by disappointing manufacturing PMI as well as a surprise decision by Singapore’s central bank to ease monetary policy, which was seen as a sign of weak global trade. The kiwi fell over 1% to 0.6833 versus the US dollar in late Asian trading.
The euro and the pound also extended their losses against the greenback on Thursday, as the single currency slipped to 1.1255 dollars, while sterling fell to 1.4115 dollars.
In commodities, crude oil prices came under pressure following a Reuters report that a Russian oil minister was quoted as saying that Sunday’s meeting between major oil producers is likely to produce only a loose agreement. US oil futures fell below $41 and were last trading at $40.86 a barrel.
The decline in oil prices lifted the US dollar back towards 1.29 versus the Canadian dollar, but found resistance just below the level as the loonie was being supported by an upward revision to GDP growth forecasts for 2016 by the Bank of Canada yesterday.
Looking ahead to the rest of the day, Eurozone and US inflation figures will be watched, along with the Bank of England’s latest monetary policy decision. Also to attract attention today will be speeches by the Fed’s Powell and Lockhart later in the US session.