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Stocks mixed; yen slumps as BOJ maintains policy: markets wrap

Stocks mixed; yen slumps as BOJ maintains policy: markets wrap
Stock figures on a rotating-cube screen in an atrium of the Kabuto One building, next the Tokyo Stock Exchange, in Tokyo, Japan, on Tuesday, 7 June 2022. (Photo: Akio Kon/Bloomberg)

Stocks were mixed in Asian trading on Wednesday while the yen slumped about 2% and benchmark Japanese government bond yields pushed higher after the central bank kept its key settings unchanged.

Equities rose in Japan and Hong Kong while those in mainland China fluctuated and South Korean shares fell. 

Contracts for the S&P 500 reversed declines and Treasury yields slid after the Bank of Japan policy meeting. The S&P 500 had snapped a four-day rally on Tuesday amid signs that the best start to a year for global equities in a generation was cooling.

The yen depreciated by the most since June last year. While economists had expected governor Haruhiko Kuroda to hold out for now, traders have been testing policy makers. The benchmark 10-year Japanese government bond yield breached the central bank’s target ceiling of 0.5% for a fourth day.

Treasury 10-year yields dropped about seven basis points to 3.47%. A gauge of the dollar of the dollar rallied after trading in and out of negative territory in early Asian trade.

Overnight in the US, Goldman Sachs Group shares fell after the lender reported a drop in investment-banking fees in the fourth quarter. Morgan Stanley, which also reported on Tuesday, was buoyed by revenues from its asset and wealth management divisions, pushing its stock higher.

New York manufacturing data for January showed a decline to the lowest level since the early months of the pandemic, underscoring the pain facing producers as Federal Reserve rate hikes weigh on the economy.

Fed officials Raphael Bostic, Lorie Logan and Patrick Harker will speak on Wednesday, providing potential clues on the outlook for rates.

Elsewhere, oil contracts traded higher as traders looked to a revival in Chinese demand this year after data showed the economy fared better than expected last quarter. BM/DM

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