Asian shares hovered around 15-month highs on Tuesday and the dollar was firm ahead of highly anticipated U.S. inflation data, while Japanese bonds were squeezed as the central bank pulled back a little on its bond buying programme.
MSCI's broadest index of Asia-Pacific shares outside Japan, opens new tab climbed slightly and hit its highest since early 2023 in morning trade, as a strong rally in Hong Kong shares extended into a fourth consecutive week.
Japan's Nikkei, opens new tab was flat. Benchmark 10-year Japanese government bond yields rose one basis point to 0.95%, the highest yield since November, and five-year Japanese yields hit 0.555%, the highest since 2011.
The main focus this week is on Wednesday's actual U.S. CPI figures, to see whether some upside surprises in the first quarter were a blip or a worrying trend. Expectations are for core CPI to slow from an annual 3.8% in March to 3.6% for April.
In the currency market, nerves and the inflation expectation survey were enough to keep the dollar from falling. Dollar/yen hit its highest since the start of the month, when traders reckoned Japanese authorities were intervening to buy yen.
The yen traded as soft as 156.4 to the dollar. The euro was steady at $1.0786 and the Australian and New Zealand dollars kept to recent ranges, the Aussie at $0.6606 and kiwi at $0.6015.
Source: Reuters
