Yen Weakens to 40-Year Lows Amid Global Market Turmoil
Market Overview and Key Developments
A look at the day ahead in European and global markets from Gregor Stuart Hunter
Yen's Decline and International Response
The yen is again hovering close to its weakest levels in 40 years with the threat of joint intervention looming large after Japan's finance minister and the U.S. Treasury secretary held an online meeting to discuss global financial market conditions.
The yen was trading at 161.60 per dollar in the Asian morning on Tuesday, its weakest level in two years, after moving within a few pips of levels not seen for decades during U.S. trading hours.
Policy Actions and Market Impact
Intervention by the Ministry of Finance since April and rate hikes from the Bank of Japan have done little to arrest the slump in the currency.
Regional Market Movements
South Korea and Asia-Pacific Indices
Elsewhere, South Korean shares fell more than 6% after the country's finance minister, Koo Yun-cheol, said at a cabinet meeting on Tuesday that the current foreign exchange level at around mid-1,500 won per U.S. dollar is "excessive."
Losses for the KOSPI index, which closed at a record high on Monday, triggered a brief trading halt and dragged MSCI's broadest index of Asia-Pacific shares outside Japan 1.5% lower.
Japan's Nikkei and Economic Data
Japan's Nikkei 225 retreated 1.2%, pulling back after an eight-day winning streak, even as data on Tuesday showed the country's manufacturing sector sustained robust growth in June, with a gauge of new orders surging to the fastest pace in more than four years.
Commodities and Global Indices
Oil Prices and Geopolitical Developments
Brent crude was 0.4% lower at $77.56 a barrel after the United States waived sanctions on Iran for 60 days from Monday after the first talks under a nascent peace deal, while officials reported a sustained lull in fighting in Lebanon under the agreement aimed at ending hostilities across the region.
Stock Futures in the U.S. and Europe
S&P 500 e-mini futures were down 0.5%, extending declines after tech megacaps weighed on stocks on Wall Street on Monday.
In early European trades, pan-region futures were down 0.6%, German DAX futures were 0.7% lower and FTSE futures fell 0.8%.
Key Events to Watch
Company Earnings
Major Reports Scheduled
FedEx, Cerebras Systems, Carnival Corp
Economic Events
Europe and UK Economic Indicators
France: Business Climate for June, S&P MFG Flash PMIs for June
Germany: S&P Flash PMIs for June
Euro zone: S&P Flash PMIs for June
UK: Flash PMIs for June and CBI Trends for June
Debt Auctions
German Government Debt
Germany: 2-year government debt
(Reporting by Gregor Stuart Hunter; Editing by Jamie Freed)
