SINGAPORE- Asian stocks rose on Tuesday while the dollar firmed, keeping the yen rooted near the 152-per-dollar level that has traders worried about possible intervention, as expectations the Federal Reserve was close to cutting interest rates faded.
Data on Monday showed US manufacturing grew for the first time in 1-1/2 years in March as production rebounded sharply and new orders increased, highlighting the strength of the economy and casting doubts on the timing of Fed rate cuts.
The robust manufacturing data sent yields on US Treasuries higher, with two-year and 10-year yields climbing to two-week peaks, boosting the dollar.
Futures indicated European stock markets were set for a subdued open, with Eurostoxx 50 futures up 0.10 percent , German DAX futures up 0.02 percent and FTSE futures 0.07 percent higher.
Japan’s Nikkei was volatile. It reclaimed the 40,000 points mark in the morning session but was last flat, below the mark.
The yen was slightly weaker at 151.76 per dollar, not too far from the 34-year low of 151.975 it touched last week, with traders keenly watching for hints of intervention from Japanese authorities.
“The continued run of robust US data is making the lives of Japanese currency officials attempting to support the yen increasingly uncomfortable,” said Tony Sycamore, market analyst at IG.
“It also means that a smoothing event (physical intervention) is unlikely to occur until after the 152.00 level breaks.”
Tokyo intervened in the currency market in 2022, first in September and again in October, as the yen slid toward 152 to the dollar, a level last seen in 1990.
Japanese Finance Minister Shunichi Suzuki said on Tuesday that authorities were ready to take appropriate action against excessive currency market volatility.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.65 percent higher, mainly due to Hong Kong stocks. The Hang Seng Index was up more than 2 percent , catching gains as the financial hub reopened after public holidays on Friday and Monday.
