European stock futures were steady and US contracts rose along with global stocks ahead of Federal Reserve Chair Jerome Powell’s Jackson Hole speech later Friday.
The yen strengthened after hawkish comments from Bank of Japan Governor Kazuo Ueda. The Japanese currency rose as much as 0.7% versus the dollar, while government bond futures fell and the Topix gained.
In replies to lawmakers, Ueda signaled it’s still on the path to raise interest rates, provided inflation and economic data continue in line with its forecasts.
The comments come after his deputy had sought to reassure investors that further hikes would also depend on the state of the market, after the central bank’s increase in July trigger a massive selloff in global equities.
Ueda’s comments in parliament “put an end to speculation that the BOJ could back off from hiking again due to the market turmoil seen,” said Charu Chanana, head of currency strategy at Saxo Markets. “Keeping the door open for further rate hikes is positive for yen and negative for stocks at the margin.”
