Asian stock markets might experience mixed trade as we approach the final trading day of the quarter. Notably, U.S. stock markets faced a downturn post-cash opening, sparking concerns about potential significant month-end sell-offs, though the mood improved as the day progressed. In the absence of major data releases or significant events to guide market sentiment early on, investors will be closely monitoring the remarks of Federal Reserve Governor Christopher Waller at the Economic Club of New York. Waller has consistently highlighted the critical role of economic data in guiding the Federal Reserve’s decisions on interest rate adjustments, with a careful focus on reaching the 2% inflation goal. Given the current tight market conditions and the lack of significant new data this week, no substantial shifts in stance or policy language are anticipated.
Looking ahead to the upcoming session, factors such as month and quarter-end trading dynamics, portfolio rebalancing, and adjustments in foreign exchange and bond positions will significantly influence short-term market movements. In the currency market, the Japanese yen has been in the spotlight after the USD/JPY pair briefly exceeded its previous peak from November 2023, reaching levels not observed since 1990. However, the yen regained some ground following announcements from Japan’s financial authorities about a meeting to discuss the global financial environment. As the yen continues to show vulnerability, market participants will be vigilant for any hints of possible intervention in the currency market by Japanese policymakers, especially any indications concerning the desired level of the yen.
