Asian shares showed a mixed performance on Monday as investors awaited further signals on potential interest rate cuts by the Federal Reserve. Japan's Nikkei 225 declined by 0.7% to 40,619.40, with investors opting to sell shares to secure profits following recent record highs. Meanwhile, Hong Kong’s Hang Seng index rose by 0.5% to 16,584.22, and the Shanghai Composite gained 0.4% to reach 3,061.36. The Chinese yuan dropped to a four-month low of 7.2282 against the U.S. dollar.
Australia's S&P/ASX 200 index increased by 0.6% to 7,813.70, while South Korea's Kospi fell by 0.5% to 2,735.46. Concerns were raised by a Japanese finance official regarding the recent surge of the U.S. dollar against the Japanese yen, leading to speculation about potential market intervention. The dollar was trading at 151.13 yen on Monday, up from 151.41 yen, while the euro rose to $1.0814 from $1.0810.
Last week, the Bank of Japan raised a key interest rate for the first time in 17 years, moving it slightly above zero from negative rates. Despite this adjustment, borrowing rates in Japan remain lower than those in the U.S. and many other countries. The recent BOJ meeting added complexity to the dollar's trajectory, with the Japanese yen failing to gain demand despite the rate hike.
On Friday, the S&P 500 index dipped by 0.1% from its all-time high to close at 5,234.18. The Dow Jones Industrial Average fell by 0.8% to 39,475.90, while the Nasdaq composite increased by 0.2% to 16,428.82, setting a new record. U.S. Treasury yields decreased, with the 10-year Treasury yield dropping to 4.21% from 4.27%.
The U.S. Federal Reserve has hinted at the possibility of three interest rate cuts this year, contingent on inflation trends. The Fed's main interest rate is currently at its highest level since 2001. In energy trading, benchmark U.S. crude oil rose by 52 cents to $81.15 per barrel, while Brent crude, the global standard, increased by 52 cents to $85.35 per barrel.
