NEW YORK : U.S. stocks gained ground on Monday and the yen surged amid suspected intervention as investors embarked on what promises to be an action-packed week.
All three major U.S. stock indexes were modestly higher at the top of a week filled with high profile earnings, crucial economic data and the U.S. Federal Reserve’s monetary policy meeting.
Meanwhile, the yen jumped after touching 34-year low, with traders citing heavy yen-buying intervention by Japanese banks.
“It’s a playbook that they’ve used before – nobody is commenting despite all the confirmations that it occurred,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “It’s a holiday (in Japan) as well, so it’s a light volume day which points to some obvious conclusions even if its not official.”
This week’s data releases include European inflation and U.S. labor market indicators, while the Fed is due to convene on Tuesday for its two-day meeting at which it is expected to keep its key interest rate unchanged, but strike a hawkish tone.
“Inflation is not exactly where they want it to be, but it has come down to the point where if the labor market shudders even a little bit the Fed will pivot back to dovish talk pretty quickly,” Mayfield added. “The labor market is the car we’ll drive for the rest of the year.”
Earnings season shifts into overdrive this week with high profile results expected from Amazon.com, Apple Inc and others.
The Dow Jones Industrial Average rose 114.41 points, or 0.3 per cent, to 38,354.07, the S&P 500 gained 10.04 points, or 0.20 per cent, to 5,110 and the Nasdaq Composite added 40.17 points, or 0.25 per cent, to 15,968.07.
European shares eked out a nominal gain, backing down from a two-week high after Germany reported higher-than-expected inflation. Investors now eye the Fed’s rate decision on Wednesday.
The pan-European STOXX 600 index rose 0.07 per cent and MSCI’s gauge of stocks across the globe gained 0.37 per cent.
Emerging market stocks rose 0.99 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.97 per cent higher, while Japan’s Nikkei rose 0.81 per cent.
Japan’s yen jumped as much as 5 yen against the dollar, then eased back a bit amid suspicions that Tokyo intervened in the currency market for the first time in 18 months.
Japan’s top currency diplomat Masato Kanda declined to comment when asked if authorities had intervened, though traders said they had.
The dollar was last lower against a basket of world currencies.
The dollar index fell 0.28 per cent, with the euro up 0.25 per cent to $1.0719.
The yen strengthened 1.49 per cent versus the greenback at 156.02 per dollar, while sterling was last trading at $1.2559, up 0.56 per cent on the day.
U.S. Treasury yields pulled back from last week’s highs ahead of a Fed meeting and crucial economic data expected later in the week.
Benchmark 10-year notes last rose 14/32 in price to yield 4.6136 per cent, from 4.669 per cent late on Friday.
The 30-year bond last rose 21/32 in price to yield 4.7378 per cent, from 4.782 per cent late on Friday.
Crude prices dipped as Israel-Hamas peace talks lowered the geopolitical temperature and tempered fears of a widening regional conflict.
U.S. crude dropped 1.45 per cent to settle at $82.63 per barrel, while Brent settled at $88.40, down 1.23 per cent on the day.
Gold prices reversed an earlier loss and was last essentially unchanged as investors await crucial data and potential clues regarding the Fed’s rate cut path.
Spot gold added 0.1 per cent to $2,339.54 an ounce.
(This story has been refiled to add a missing word in the headline)
