Asian shares mostly higher, yen hits record low versus euro


SYDNEY: Asian shares were mostly higher on Tuesday after recent losses, while the battered yen hit a record low versus the euro, although the risk of intervention stemmed further weakness against the U.S. dollar.

With the first U.S. presidential debate on Thursday and the first round of voting in the French election at the weekend, investors remain cautious of how political shifts in major economies could impact their positions.

Europe is set to open mixed, with EUROSTOXX 50 futures falling 0.3% but the FTSE was up 0.1%.

Nasdaq futures rebounded 0.3%, having tumbled over 1% overnight thanks to a 7% drop in AI bellwether Nvidia . The Dow Jones Industrial Average, however, rallied 0.7% to a one-month high as investors added value stocks, which have been laggards in the recent tech-driven rally, to their portfolios.

On Tuesday, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5% after three straight sessions of declines, helped by a 1.1% rise in Australia's resources heavy shares .

Japan's Nikkei gained 0.9%, Taiwanese stocks , which dropped more than 1% earlier in the session, clawed back lost ground and were last up 0.3%. Chinese shares were slightly lower, after oscillating between gains and losses.

"It's difficult to extrapolate what can be attributed to technical factors and what's fundamentals in the markets, with price action apparently driven by end-of-month and end-of-quarter positioning," said Kyle Rodda, a senior analyst at Capital.com.

"A sell-down in tech, despite little shift in rates expectations and the outlook for earnings, may signal a trimming by investors of the quarter's big winners."

Hong Kong's Hang Seng index rose 0.4%, after a recent leg lower found a floor near two-month lows.

However, China's economic recovery is still fragile. Reports said e-commerce sales declined for the first time during the so-called 618 shopping festival that ended last week.

The Chinese yuan keeps setting seven-month lows daily and has been pinned near the weak end of its daily trading band of 2%. The spot yuan hit 7.2630 per dollar on Tuesday after weak guidance from the central bank.

"While some things are moving in the right direction ... the sentiment is still being impacted by what we've seen over the last three years," said James Cook, head of investment specialists at Federated Hermes.

The dollar dipped a little after recent broad-based gains, with the dollar index down 0.1% to 105.37, after easing 0.3% overnight.

The yen rose 0.2% to 159.29 per dollar, near levels not seen since late April when Japanese authorities intervened to stem the currency's fast declines.

Japanese Chief Cabinet Secretary Yoshimasa Hayashi said on Tuesday the authorities are closely watching currency moves and will respond to excessive volatility.

The yen, however, kept weakening against other major currencies, with the euro breaking major resistance to hit a record top of 171.49 yen overnight. It was last at 171.17 yen.

The U.S. personal consumption expenditures (PCE) price index is due on Friday. Annual growth in the Federal Reserve's favoured core inflation index is expected to slow to 2.6% in May, the lowest in more than three years.

A low result would likely reinforce market bets on a Fed rate cut as early as September, which futures currently price as a 65% prospect. Two rate cuts are priced in for the year.

Treasuries were steady amid a lack of catalysts. Two-year yields held at 4.7296%, little changed for the week, while the 10-year yield eased 1 basis point to 4.2340%, and was down 2 bps for the week.

Oil prices were flat for the day. Brent futures held at $86.06 a barrel while U.S. crude was little changed at$81.69 a barrel.

Gold prices slipped 0.2% to $2,327.20 per ounce. - Reuters

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