Asian stocks remained subdued on Wednesday following disappointing earnings from U.S. tech giants Tesla and Alphabet, affecting market sentiment. The yen strengthened to a six-week high ahead of the Bank of Japan meeting next week, where a rate hike is a possibility.
The U.S. dollar stayed firm as traders awaited an upcoming inflation report on Friday and a Federal Reserve meeting next week. The MSCI Asia-Pacific index outside Japan fell 0.08%, while Japan’s Nikkei dropped 0.23%. Nasdaq and S&P 500 futures also declined after Tesla reported its lowest profit margin in over five years, and Alphabet’s shares dipped despite beating revenue and profit estimates.
Chinese stocks faced volatility, with the Shanghai Composite index down 0.18% and the CSI300 index 0.19% lower. Investor sentiment in China remained fragile despite government stimulus efforts. Upcoming U.S. GDP and PCE data are highly anticipated, with markets pricing in potential interest rate cuts later this year.
The yen surged to its highest level since early June, suspected to be due to Tokyo’s intervention in the currency market. This intervention has led speculators to unwind carry trades involving the yen. The dollar index remained stable, with minor changes observed across various currency pairs.
In commodities, oil prices rose due to declining U.S. crude inventories. Brent crude futures increased to $81.21 per barrel, and U.S. West Texas Intermediate crude rose to $77.16 per barrel.
