The dollar was kept in check after U.S. yields fell on geopolitical concerns and dovish statements by a Federal Reserve official.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS initially fell to a four-month low after Wall Street’s overnight slide, but managed to steady thanks to gains in Chinese shares.
Space and defense stocks surged, with the industries enjoying support on hopes they would benefit from deepening reforms in state firms and from more government investment in defence.
The United States and its Arab allies bombed militant groups in Syria for the first time on Tuesday, opening a new front amid shifting Middle East alliances and sapping demand for risk.
The air strikes in Syria also garnered demand for safe-haven government debt and pushed U.S. Treasury yields lower, in turn helping arrest the dollar’s recent bull run.
The dollar was down 0.3 percent at 108.58 yen JPY=, after going as low as 108.25 yen overnight.
The greenback has been on the back foot after scaling a six-year high of 109.46 on Friday, receiving an additional knock after Japanese Prime Minister Shinzo Abe voiced concern about the economic impact from the currency’s recent weakness.
The euro was little changed at $1.2851 EUR=, limping away from the 14-month low of $1.2816 hit Monday.
Fed officials could offer more catalysts for currency markets, after Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said on Tuesday the central bank can keep stimulating the U.S. economy because inflation is posing little threat – comments the markets perceived as dovish.
Federal Reserve Bank of Cleveland President Loretta Mester speaks later in the day.
“Fed officials will be in focus again today.. .if they do not give any hints that they are in a hurry to hike rates the dollar could lose more ground against the yen and present 109 as a ceiling,” said Masafumi Yamamoto, market strategist for Praevidentia Strategy in Tokyo.
Brent LCOc1 was down 12 cents at $96.73 a barrel.
Gold clung to overnight gains on Wednesday as Asian shares retreated, but investors remained cautious amid a firmer dollar and upbeat U.S. manufacturing data that kept prices near their lowest since January. [GOL/]
Spot gold XAU= held steady at $1,223.40 an ounce.
Copper was stuck near three-year lows, weighed after miner Newmont raised its supply forecast and by signs of fragility in the global economy. [MET/L]
Three-month copper on the London Metal Exchange CMCU3 inched up 0.1 percent to $6,725.00 a tonne after slumping to the lowest in three months on Monday at $6,707.25 a tonne.
Source : reuters