(Bloomberg) — Japanese stocks recouped a portion of their biggest daily slide in more than two years, though came off their highs Wednesday after CNN reported that President Donald Trump’s frustration with Treasury Secretary Steven Mnuchin is rising. U.S. equity futures dipped.
The yen eased, while Treasury yields ticked higher. Korean shares fell after a holiday, and Shanghai stocks were little changed. Australia and Hong Kong were closed. Personnel developments in Washington continue to be a focus for investors as they determine how much selling pressure remains in what’s been the most brutal month for global stocks since 2008. The CNN report followed Trump comments about the Federal Reserve that were less abrasive than earlier this month.
Elsewhere, West Texas Intermediate crude traded around $43 a barrel. The offshore yuan was little changed after China released new rules promising to treat all companies equally, the latest positive step on the trade and investment front since U.S. and Chinese tariff hikes were set on pause.
While economic indicators suggest the world is in the midst of a slowdown, much of the market turbulence this month appeared to stem from tumbling confidence in policy makers. Mnuchin unsettled investors at the weekend by revealing he’d reached out to the heads of top American banks to confirm they have adequate liquidity. Trump expressed confidence in Mnuchin Tuesday, but the Treasury chief could be in serious jeopardy after his attempts to shore up confidence failed, CNN said, citing a source close to the White House.
A steady outflow of U.S. cabinet members, including the Defense secretary, and a partial shutdown of the federal American government have also proved unnerving. Potentially more constructive for investors were comments by Trump on Tuesday about his belief the U.S. central bank will “get it pretty soon.” He spoke days after Bloomberg reported he had discussed firing Chairman Jerome Powell out of frustration over interest-rate hikes.
“It does look like some substantial post-Xmas holiday sales are on offer in global equity markets. However, given the unfavorable climate, it’s still unclear if investors’ cheerless mood will improve before the end of the year,” said Stephen Innes, head of Asia-Pacific trading at Oanda Corp. in Singapore. “‘As we’ve seen so often over the last three months downside momentum has a way of building through the day.”
Here are some events investors may focus on in coming days:
Bank of Japan Governor Haruhiko Kuroda speaks at Japan’s top business lobby, Keidanren, on Wednesday.India’s central bank releases a financial-stability report Wednesday.U.S. new-home sales are due Thursday.
And these are the main moves in markets:
The MSCI Asia Pacific Index was up 0.3 percent as of 11:07 a.m. Tokyo time.The Topix Index rose 1.2 percent after advancing as much as 2 percent. It slumped 4.9 percent Tuesday. Futures on the S&P 500 Index dipped 0.2 percent. The underlying gauge is 7 points away from completing a full-blown bear-market drop.The Kospi Index was down 1.4 percent.Shanghai Composite fell 0.2 percent.
The Japanese yen slipped 0.1 percent to 110.44 per dollar.The euro was up 0.2 percent at $1.1413.The offshore yuan was little changed at 6.8934 per dollar.The Bloomberg Dollar Spot Index was little changed.
Japan’s 10-year bond yield was little changed at 0.021 percent.Ten-year Treasury yields edged up about 1 basis point to 2.75 percent.
West Texas Intermediate crude was up 0.9 percent at $42.91 a barrel.Gold gained 0.3 percent to $1,272.16 an ounce.
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