In a reflection of lackluster movements in global share indexes, Wall Street mirrored modest gains on Tuesday, with the yen maintaining stability just above intervention levels set in 2022, following continued verbal intervention by a Japanese official aimed at discouraging short selling after recent Japanese policy adjustments.
Early U.S. trading saw a slight uptick in Treasury yields, yet overall market activity remained subdued as the approach of Good Friday loomed, leading to closures in U.S. markets and various other financial centers.
The Dow Jones Industrial Average climbed 95.64 points, or 0.24%, reaching 39,409.28, while the S&P 500 and the Nasdaq Composite also saw gains of 0.27% and 0.34%, respectively.
Meanwhile, MSCI’s global stock gauge inched up by 1.87 points, settling at 781.32.
Art Hogan, chief market strategist at B Riley Wealth in New York, noted the current market dynamics, stating, “It’s an interesting dynamic, and this holds every time we have a Fed meeting – the next week tends to have a quieter tone to it. Especially a holiday-shortened week like we have here, and the amount of data influence is going to be lighter. That’s attracting the sideways movement we’ve seen.”
The STOXX 600 index saw a modest increase of 0.13, while MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.27% higher.
Of particular interest was the yen’s performance, trading near its weakest levels against the dollar since 1990, despite the Bank of Japan’s recent interest rate hike—the first in 17 years. The dollar, at 151.42 yen, faced the risk of intervention from Japan to prevent further depreciation, having risen to 151.94 yen in October 2022 before corrective measures were taken.
Japanese Finance Minister Shunichi Suzuki emphasized the readiness to implement necessary measures to address the yen’s decline, echoing concerns raised by Tokyo’s top currency official the day before.
In the currency markets, the dollar experienced a slight decline against the offshore Chinese yuan, settling at 7.251, following a stronger-than-anticipated adjustment in its trading band.
Market sentiments were impacted by a significant drop in the yuan last Friday after a prolonged period of stability, leading to speculations about China’s potential relaxation of currency controls to allow for devaluation.
Kathleen Brooks, XTB research director, highlighted the evolving landscape in the FX market, noting interventions from both Japan and China as indicators of their commitment to economic stability amid deflation concerns.
The Federal Open Market Committee’s decision to maintain U.S. interest rates unchanged last week, alongside projections showing no deviation from the previous expectation of three rate cuts this year, has added complexity to the market outlook.
While U.S. interest rate futures currently imply around three rate cuts this year and a high probability of the first cut occurring in June, varying opinions among Fed officials have contributed to mixed expectations.
Following a report indicating a stronger-than-expected increase in orders for durable U.S. goods in February, along with signs of recovery in business equipment spending, U.S. yields saw a marginal rise, with the 10-year note yield reaching 4.263%.
In the commodities market, U.S. crude dipped to \(81.86 a barrel, while Brent fell to \)86.39 per barrel. Spot gold gained 0.33% to \(2,178.57 an ounce, and U.S. gold futures rose by 0.36% to \)2,182.70 an ounce.
Bitcoin and Ethereum experienced declines, with Bitcoin falling by 1.39% to 69,969.00 and Ethereum declining by 1.55% to 3572.4.