The yen strengthened for a fourth day against the dollar while falling Treasury yields broadened an emerging-market currency rally to Asia after fresh data sustained expectations for the Federal Reserve to ease policy.
European stock futures pointed to modest gains after a largely range-bound session in Asia. Shares fell in Japan, an export-oriented economy, as the yen rose to around 141 per dollar.
Benchmarks increased in Australia and Hong Kong, following a fourth day of gains on Wall Street. The policy-sensitive two-year Treasury yields dropped six basis points in Asian trading, weighing on the dollar as emerging Asian currencies, including the Korean won, carried over a rally from Latin America.
The combination of a mixed equities landscape and stronger bonds indicates that investors remain divided on the magnitude of the Fed’s anticipated interest rate cut next week.
The debate continued after data Thursday showed that the US producer price index picked up slightly in August after the previous month’s numbers were revised lower. Meanwhile, an uptick in applications for unemployment benefits renewed concerns about a weakening labour market.
