SINGAPORE- Asian stocks inched higher on Tuesday as investors awaited a slew of economic data, corporate earnings and the US Federal Reserve’s policy meeting, while the yen was weaker a day after suspected intervention lifted it from 34-year lows.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.36 percent higher, set to clock in a nearly 1 percent gain for the month, its third straight month of gains.
European bourses are set for a lacklustre open, with Eurostoxx 50 futures and FTSE futures little changed ahead of a euro zone inflation report.
This week’s other data releases include US labor market reports, while the Fed is due to convene on Tuesday for its two-day meeting at which it is expected to stand pat on interest rates but strike a hawkish tone.
The spotlight remains on the yen after a volatile start to the week as the Japanese currency surged to 154.40 per dollar on Monday from a fresh 34-year low of 160.245, with traders citing yen-buying intervention by authorities.
Markets had been anticipating that Japan might intervene to prop up the yen after the currency fell more than 10 percent against the dollar this year.
On Tuesday, the yen was last at 156.76 per dollar.
Japan’s top currency diplomat Masato Kanda said on Tuesday authorities were ready to deal with foreign exchange matters around the clock while declining again to comment on whether the finance ministry had intervened to a day earlier.
“We are ready 24 hours, so whether it’s London, New York or Wellington (hours), it doesn’t make a difference,” the vice finance minister for international affairs told reporters.
Vasu Menon, managing director of investment strategy at OCBC, said intervention alone cannot alter the wide gulf in interest rates that is largely driving the yen’s decline.
The yen has been under pressure as US interest rates have climbed and Japan’s have stayed near zero, funneling cash out of yen and into higher-yielding assets.
“A lot now hinges on the outcome of the Fed policy meeting this week,” said Menon.
