The Topix index in Japan fell again last night (currently down 1.2%), as did benchmarks in Korea and Australia, while the Hang Seng and CSI 300 both gained. The Nikkei hit its highest volatility since 2008 earlier this week but has since calmed down. European equity futures have fallen (Euro Stoxx 50 contracts down 1%) with that uncertain Asia session. USDJPY is down to around 146.20. According to JPM strategists - three quarters of that carry trade (borrowing in JPY to fund higher yielding assets) has been unwound and the recent slump has wiped out all positive year-to-date returns from it.
Investors are preparing for the Bank of Japan and the Fed to move in opposite directions and as part of that, all eyes today will be on US initial jobless claims data and the Fed's Thomas Barkin's speech. Many investors will remain side-lined until further data points are revealed. In commodities, oil steadied (WTI currently $75.41/ barrel) but the market is on edge over a possibility of Iranian military action. And gold is up slightly at $2393.02 /oz.
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