SINGAPORE: Asian stocks edged higher on Thursday as tensions between the United States and North Korea came off the boil, while the Federal Reserve’s concerns about weak US inflation weighed on the dollar.
European stocks look set for a weaker start, with financial spreadbetter CMC Markets expecting Britain’s FTSE 100 to open down 0.2 per cent, and Germany’s DAX and France’s CAC 40 to start the day down 0.3 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.55 per cent.
US stock futures were about 0.1 per cent lower.
Japan’s Nikkei slipped 0.1 per cent, weighed down by a stronger yen as the dollar wilted and shrugging off data showing the country’s exports rose for an eighth straight month in July.
Australian shares reversed earlier gains to fall 0.1 per cent, dragged lower by a tumble in Telstra shares to a five-year low after the telecoms company said it would slash its dividend by 30 per cent this financial year.
South Korean shares advanced 0.65 per cent after the leaders of both North Korea and the United States appeared to back off from their heated rhetoric from last week.
South Korean President Moon Jae-in said Pyongyang would be “crossing a red line” if it put a nuclear warhead on an intercontinental ballistic missile, but that the US had promised to seek Seoul’s approval before taking any military action.
Trump on Wednesday praised North Korean leader Kim Jong Un for a “wise” decision not to fire missiles towards the US Pacific territory of Guam, after North Korean media reported that Kim had delayed to decision while he waited to see what the US did next. While that helped Wall Street close in positive territory overnight, concerns on the home front sent the dollar into reverse.
Money market futures are now pricing in about a 40 per cent chance the Fed will raise rates by December, compared to just under 50 per cent before the Fed’s minutes.
“The Federal Open Market Committee minutes confirmed one thing, which is that the committee members are not on the same page and there is no clear date when the Fed will initiate the process of reducing the size of the balance sheet,” Naeem Aslam, chief market analyst at Think Markets in London, wrote in a note.
The dollar fell 0.25 per cent to 109.885 yen, extending Wednesday’s 0.4 per cent slide.
The dollar index, which tracks the greenback against a basket of six major peers, dropped 0.2 per cent to 93.357 after Wednesday’s 0.3 per cent loss.
The Australian dollar advanced 0.2 per cent to $0.7942 after the country added 27,900 jobs in July, beating expectations for an increase of 20,000.
The unemployment rate remained at 5.6 per cent, as expected, although full-time employment fell by 20,300.
Sterling climbed 0.1 per cent to $1.2908, extending Wednesday’s 0.16 per cent gain after wages rose faster than expected in the three months to June, and the unemployment rate fell to 4.4 per cent, its lowest since 1975.
The euro rose 0.1 per cent to $1.1785, extending its 0.3 per cent gain overnight, after the euro zone’s second-quarter growth was revised to 2.2 per cent from a year earlier, from 2.1 per cent previously.
Bitcoin, which has surged over $1,500 this month on speculative demand for the digital currency, slipped 1.4 per cent to $4,317.49, but remained within a whisker of its all-time high of $4,400 touched earlier this week.
Industrial metals held gains following their surge overnight, underpinned by expectations of strong global demand and tight supplies.
Benchmark zinc on the London Metal Exchange set a new decade high of $3,145 a tonne on Thursday, and was last up 0.7 per cent from its previous close at $3,140.
London copper gained 0.4 per cent to $6,559 a tonne, after hitting $6,580, its highest level since November 2014, earlier in the session. — Reuters
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