Stocks subdued by rate hike risks, yen steady

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SINGAPORE : Asia's stockmarkets were steady but fragile on Thursday, a day after their biggest drawdown in three months as investors weighed the risk of the Federal Reserve announcing a 100 basis point interest rate hike next week to tackle sticky inflation.The Japanese yen loitered just above recent lows

SINGAPORE : Asia's stockmarkets were steady but fragile on Thursday, a day after their biggest drawdown in three months as investors weighed the risk of the Federal Reserve announcing a 100 basis point interest rate hike next week to tackle sticky inflation.

"Equity markets are presently in no-man's land," said Sean Darby, global equity strategist at Jefferies in Hong Kong. Fed funds futures, which were dumped along with stocks after Tuesday's stubbornly hot U.S. inflation reading, imply a 37 per cent chance of a 100 basis point rate hike next week and have the benchmark U.S. interest rate about 4.3 per cent by February.

" two opposing forces for the 10-year note – the upward pressure from Fed hikes and downward pressure from a potential economic downturn in the future," said NatWest Markets' U.S. rates strategist Jan Nevruzi.LINE IN THE SAND The yen, pounded some 20 per cent lower against the dollar this year, bounced off its lows a day ago when the Bank of Japan checked dollar/yen rates with banks around the 145 yen per dollar level - a possible prelude to yen buying. It was last at 143.05 per dollar.

 

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Stocks subdued by rate hike risks, yen steadySINGAPORE : Asia's stockmarkets were steady but fragile on Thursday, a day after their biggest drawdown in three months as investors weighed the risk of the Federal Reserve announcing a 100 basis point interest rate hike next week to tackle sticky inflation.The Japanese yen loitered just above recent lows
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