- Greenback hovering near 6-week lows as trade fears grow
- Gold prices edge higher thanks to pressure on USD
- Australia stocks move higher
- Bitcoin & other cryptocurrencies recover following Binance hack
Bank of Japan Governor Haruhiko Kuroda rejected an idea gaining traction in some US circles that governments can spend more aggressively without causing hyper-inflation, adding that Tokyo's economic policies are nowhere close to the concept.
Kuroda said hyper-inflation could happen not only under extreme circumstances such as after a war, but also due to policy failures, as seen in some Latin American and Asian nations. "It's wrong to assume there will be no hyper-inflation even if you boost fiscal spending recklessly, as long as it's financed by the central bank," Kuroda told Japan's parliament on Thursday.
The US Dollar hovered near a six-week low versus the Yen on Thursday, weighed down against the safe-haven Japanese peer as risk aversion gripped broader markets amid concerns the US-China trade conflict could escalate. The US currency stood at 109.910 Yen after going as low as 109.70 overnight, its weakest since March 25. Meanwhile, the Kiwi remained under pressure following the Reserve Bank of New Zealand (RBNZ)’s decision to cut benchmark rate. Markets were nervously awaiting the start of two-day trade talks in Washington later in the global day to see if Chinese negotiators can convince the White House to back down on a threatened tariff hike on Friday.
US President Donald Trump said on Wednesday that China "broke the deal" it had reached in trade talks with the United States and vowed not to back down on imposing new tariffs on Chinese imports unless Beijing "stops cheating our workers." The US Trade Representative's office announced that tariffs on $200 billion worth of Chinese goods would increase to 25% from 10% on Friday, right in the middle of two days of meetings between Chinese Vice Premier Liu He and Trump's top trade officials in Washington.
The surprise deterioration in US-China trade talks has also prompted analysts to dramatically turn bearish on the Chinese Yuan. At the start of the week, the US President Donald Trump shockingly punctured optimism around trade talks between the world's top two economies by threatening to hike import tariffs on Chinese goods from Friday. Short positions on the Chinese Yuan were at their highest since mid-December, a fortnightly poll of 12 participants showed.
Oil prices dropped on Thursday amid concerns over the escalating trade battle between the United States and China, despite a surprise fall in US crude stockpiles. Brent Crude Oil futures were at $69.91 a barrel by 06:00 GMT, down 46 cents, or 0.7%, from their previous settlement. They earlier fell more than 1%. US West Texas Intermediate (WTI) Crude futures were at $61.76 per barrel, down 36 cents, or 0.6%, having also declined more than 1% earlier.
Gold prices edged up on Thursday in Asia as traders nervously await the start of two-day trade talks in Washington later in the day to see if Chinese negotiators could convince the White House to back down on a possible tariff hike on Chinese imports. Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, were up 0.1% at $1,282.65. Gold's rival, the USD, was little changed. The US Dollar Index Futures, which measure the Greenback against a basket of six currencies, traded at 97.373, down 0.01%.
Japanese conglomerate SoftBank Group Corp announced a stock split while keeping the per-share dividend unchanged for the year, effectively doubling its shareholder payout, as it also reported a better-than-expected annual profit. SoftBank's common stock will be split at a two-for-one ratio on June 27, while its dividend will stay at 44 Yen per share. The tech and telecoms group's operating profit for the year ended March rose 80.5 percent to 2.4 trillion Yen ($22 billion), driven by higher valuations of its tech investments.
Australian stocks were higher after the close on Thursday, as gains in the Utilities, Telecoms Services and Energy sectors led shares higher. At the close in Sydney, the S&P/ASX 200 rose 0.42%. The best performers of the session on the S&P/ASX 200 were Galaxy Resources Ltd which rose 7.49% or 0.115 points to trade at 1.650 at the close. Meanwhile, Orica Ltd added 6.01% or 1.120 points to end at 19.770 and Orocobre Ltd was up 4.64% or 0.160 points to 3.610 in late trade.
Consumer inflation in China hit a six-month high in April, mainly driven by rising pork prices, official data showed on Thursday. The official consumer price index rose 2.5% year-on-year in April, according to the National Bureau of Statistics, its highest reading since October. The number was in line with expectations and slightly higher than March’s 2.3%. Pork prices, which are heavily weighted in the gauge’s basket of goods, rose 14.4% year-on-year and 1.6% month-on-month. China's hog herd has been hit by African swine fever in recent months.
Governments of all stripes like to take credit for the jobs created in an economy, but in Australia's case it is literally true. According to figures from the Australian Bureau of Statistics (ABS) all the gains in employment for the year to February were in the public sector, some 292,900 in all. By contrast, private sector jobs actually shrank by 8,300. The reliance on government to generate jobs could be a potential headache for the Reserve Bank of Australia (RBA), which has been counting on continued gains to offset sluggish wages and falling home prices.
Major cryptocurrencies reversed losses from the day before on Thursday morning in Asia after the market was weighed down by the Binance hack news. The bullish sentiment sent Bitcoin up past $6,000. Bitcoin rose 3.14% to $6,080 by 11:36 AM ET (03:36 AM GMT), surpassing the key $6,000 level for the first time this year. The digital coin regained momentum after it was set back a little by the news that major crypto exchange Binance was hacked. On Tuesday, Binance said hackers withdrew 7,000 Bitcoins worth around $40 million in one affected transaction. Other digital tokens also traded in the green. Ethereum added 1.16% to $171.78, XRP was up 0.17% to $0.30082, and Litecoin edged up 1.61% to $75.352.