Stocks fluctuate after S&P 500 snaps losing streak: markets wrap


Asian equity benchmarks fluctuated Wednesday while US share futures climbed after the S&P 500 snapped a four-day losing streak, providing a moment of respite in one of the worst years for stocks and bonds in more than a decade.

Equity benchmarks in Japan, China and Hong Kong shifted between losses and gains. Australian shares clung to a firm advance and futures contracts for European stocks climbed.

The yen moved fractionally lower after its biggest one-day jump since 1998 on Tuesday, when it climbed almost 4% against the dollar on a surprise policy adjustment from the Bank of Japan. The impact of the BOJ’s surprise decision to let yields on 10-year government bonds trade up to 0.5%, from a previous ceiling of 0.25%, continues to reverberate.

The central bank announced a surprise bond buying operation Wednesday as the yield on 10-year debt approached the new upper limit. Japan’s two-year government yield rose above zero for the first time since 2015. Treasury yields also rose slightly in Asia after jumping 10 basis points for the second consecutive session on Tuesday.

The BOJ’s Tuesday decision marks the start of a shift toward Japan normalizing its monetary policy, said Amy Xie Patrick, head of fixed income strategy for Pendal Group Ltd. “They’re at the beginning of that journey,” she said in an interview with Bloomberg Television. “This is a course of action they have to follow through on to send the message to currency speculators out there that the yen funding trade isn’t a one-way bet.”

Traders are on guard for the prospect of Japanese institutions repatriating money held in overseas stocks and bonds. Japanese investors have more than $3 trillion in foreign equities and debt with roughly half in the US, according to data compiled by Bloomberg.

“Tighter BOJ policy would remove one of the last global anchors that’s helped to keep borrowing costs at low levels more broadly,” Deutsche Bank AG analysts told clients, noting the change has come as markets were “already reeling” from the Fed and ECB meetings last week.

Many economists now expect the BOJ to raise interest rates next year, joining the Fed, the ECB and others after a decade of extraordinary stimulus.

Fresh data indicating a cool down in the US housing market offered some respite to the outlook for inflation in a year marked by quickly rising interest rates that weighed on stocks and bonds. Global equities have fallen by a fifth in 2022, on pace for their worst year since 2008. A Bloomberg index of global bonds has tumbled by 16%, by far the largest decline on an annual basis since the benchmark began in 1990.

Key events this week:

  • US GDP, initial jobless claims, US Conf. Board leading index, Thursday
  • US consumer income, new home sales, US durable goods, PCE deflator, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:


  • S&P 500 futures rose 0.3% as of 1:32 p.m. Tokyo time. The S&P 500 rose 0.1%
  • Nasdaq 100 futures climbed 0.3%. The Nasdaq 100 fell 0.1%
  • Japan’s Topix fell 0.7%
  • Australia’s S&P/ASX 200 rose 1.3%
  • Hong Kong’s Hang Seng was little changed
  • The Shanghai Composite fell 0.1%
  • Euro Stoxx 50 futures rose 0.6%


  • The Bloomberg Dollar Spot Index was little changed
  • The euro fell 0.1% to $1.0610
  • The Japanese yen fell 0.3% to 132.17 per dollar
  • The offshore yuan fell 0.2% to 6.9743 per dollar


  • Bitcoin fell 0.4% to $16,808.74
  • Ether fell 0.7% to $1,207.84


  • The yield on 10-year Treasuries advanced two basis points to 3.70%
  • Japan’s 10-year yield advanced five basis points to 0.46%
  • Australia’s 10-year yield was little changed at 3.72%


  • West Texas Intermediate crude was little changed
  • Spot gold fell 0.2% to $1 814.37 an ounce

© 2022 Bloomberg

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