Asia markets fall after oil’s drop weighs Wall Street – CNBC

7 months ago Comments Off on Asia markets fall after oil’s drop weighs Wall Street – CNBC

In the currency market, the dollar index, which measures the U.S. dollar against a basket of currencies, remained at the 94 level, trading at 94.50 as of 10:55 a.m. HK/SIN time.

The Japanese yen fell below the 111 level against the dollar, with the dollar/yen pair at 110.83 morning local time. That compares with levels over 112 last week.

Major Japanese exporters were lower, with Toyota off 2.58 percent, Nissan down 2.31 percent and Honda losing 1.56 percent. A stronger yen is a negative for exporters as it reduces their overseas profits when converted into local currency.

But it isn’t clear how much further the yen might strengthen.

Kathy Lien, managing director of FX strategy at BK Asset Management, said in a note overnight that the dollar/yen pair is nearing “intervention territory.”

“With the high level of long yen short dollar positions, this is prime time for the Bank of Japan to intervene,” she said. “However Japanese policymakers have not confirmed any intervention thus far even though dollar/yen experienced unusual spikes every time it dipped below 111 over the past two months.”

She added that Japan’s Ministry of Finance, which makes the call on intervention, could be waiting for fiscal stimulus.

The Australian dollar retreated from $0.76 to $0.7576 Tuesday afternoon local time, ahead of the Reserve Bank of Australia‘s (RBA) monetary policy decision due later in the day. The decline may be due to expectations the RBA could signal a rate cut at its May meeting.

Additionally, while most analysts do not expect a rate cut from the RBA today, Lien noted that there’s uncertainty around their comfort with recent moves in the Aussie.

“In the past, the RBA has said they prefer to see Aussie/Dollar trading closer to 65 cents and has described it as overvalued near current levels, but more recently we haven’t heard any specific concerns,” she said.

In Australia’s stock market, shares of Nine Entertainment were down 21.38 percent as of 10:58 a.m. HK/SIN time, after the company provided a fiscal third-quarter trading update indicating Television revenue was down 11 percent on-year. The company’s fiscal full year results will be released on Aug. 25, 2016.

Major U.S. indexes closed down overnight, with the Dow Jones industrial average down 0.31 percent, the S&P 500 lower by 0.32 percent and the Nasdaq composite off by 0.46 percent.

An interest rate decision from the Reserve Bank of India (RBI) is also on tap.

Asia markets fall after oil’s drop weighs Wall Street – CNBC}