AP – Asian shares were mostly lower yesterday after United States (US) stocks stalled as investors awaited developments in the Middle East.
The US dollar gained against the Japanese yen as officials downplayed the likelihood of an interest rate hike soon.
That helped push Tokyo’s Nikkei 225 index higher. It gained two per cent to 38,552.06, while the dollar traded at JPY146.51, up from 146.41 yen late on Wednesday.
The dollar had been trading around JPY142 after the ruling Liberal Democrats chose Shigeru Ishiba to head the party and succeed Fumio Kishida as prime minister.
Ishiba had expressed support for the central bank’s recent moves to raise its near-zero benchmark interest rate, which stands at around 0.25 per cent.
That led traders to bet that the yen would gain in value.
But after a meeting between Ishiba and Bank of Japan (BOJ) Governor Kazuo Ueda, both officials indicated that the central bank did not view further rate hikes as suitable for the economy at this time.
That prompted a flurry of selling of yen, which benefits big export manufacturers. The meeting between Ishiba and Ueda had not been expected to bring major news, however, “When Ishiba hinted that growing global risks should keep the BOJ firmly grounded, yen bulls hit the exits faster than you can say ‘sayonara‘,” Stephen Innes of SPI Asset Management said.
