Written by Lei Wee
SINGAPORE (Reuters) – Global stock markets started the week solidly ahead of Nvidia’s long-awaited earnings report, while comments from Japan’s central bank governor made markets smarter about the country’s interest rate outlook.
Bank of Japan Governor Kazuo Ueda reiterated on Monday that the central bank would continue to raise interest rates if economic and price developments proceed as expected, but did not say whether a rate hike would occur in December.
But he said at a subsequent press conference that keeping inflation-adjusted real interest rates low for too long could lead to excessive inflation, forcing the Bank of Japan to raise interest rates quickly.
Mr. Ueda’s remarks were watched by investors as a clue to the Bank of Japan’s next interest rate hike, and may have been the trigger to push back against the yen’s depreciation.
Japan’s currency has fallen about 7% since October against the dollar’s recovery, falling above the 156 yen level last week for the first time since July, and traders remain wary of intervention from Japanese authorities. .
The pair last traded slightly lower at 154.40 to the dollar.
IG market analyst Tony Sycamore said the possibility of the Bank of Japan’s interest rate hike next month “depends to some extent on the dollar/yen trend.”
“If the dollar/yen rises around 160, I think it increases the (likelihood of) rate hikes. But I think he probably isn’t unhappy with the dollar/yen being around 150, 152. I think we’re keeping them on the sidelines until next year.
“It’s coming, it’s just a matter of when…Japan’s economy is doing well.”
Despite the weaker yen, Japan’s Nikkei Stock Average fell 1.16%, dragged down by declines in technology stocks.
MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.1%.
Nasdaq futures rose 0.7% and S&P 500 futures rose 0.27% ahead of Nvidia’s third-quarter results on Wednesday, with analysts expecting the artificial intelligence chip leader to post a surge in sales. There is.
Nvidia’s stock price has risen nearly 200% this year, and the company’s weight in the S&P 500 index is a contributing factor to this year’s record highs.
But the company’s torrid multi-year performance has also raised the bar for earnings above performance, and any missteps could raise concerns that market expectations for AI are outpacing reality. There is sex.
Elsewhere, EUROSTOXX 50 futures rose 0.12%, while FTSE futures rose only 0.14%.
China’s CSI300 blue-chip index pared early gains and was down 0.3% in the last session. The Shanghai Composite Index fell 0.03%.
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