SYDNEY, Nov 18 (Reuters) – Asian stocks slid in early trade on Tuesday, as financial markets waited on a rush of key U.S economic data delayed by the government shutdown while investors rolled back bets of a Federal Reserve rate cut next month.
Traders are looking to the U.S. data to provide clues on the health of the world’s largest economy, with the closely watched September nonfarm payrolls report due on Thursday.
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“There will be interest in the outcome of the meeting, given Takaichi’s reputation as an advocate of easy monetary policy and fiscal policy and the market wondering when, or if, the BOJ will tighten policy over coming months,” JBWere analysts said in a research note on Tuesday.
Ueda has signalled the chance of an interest rate hike as soon as next month. But Takaichi and her finance minister, Satsuki Katayama, have made clear their preference for rates to remain low until inflation durably meets the BOJ’s 2% target.
The early weakness in regional stocks tracked an extended selloff on Wall Street overnight as benchmark Treasury yields inched lower with markets braced for a flood of economic data releases.
Chipmaker Nvidia’s quarterly earnings on Wednesday are also eagerly anticipated as investors look for signs of weakening in a sector that has driven much of the stock market’s rally over recent months.
During the U.S. government’s longest shutdown in history, traders were left to grapple with the question of whether the Federal Reserve would cut rates again at next month’s meeting.
“Global equity markets have adopted a cautiously defensive tone ahead of the U.S. non-farm payrolls and key corporate earnings,” said Besa Deda, chief economist at William Buck, the advisory firm in Sydney.
“The payrolls report is expected to provide much-needed insight into the underlying strength of the U.S. economy and should shape expectations for the Fed’s next move. A Fed rate cut in December is not a done deal.”
“November has brought greater volatility to global equity markets. Unlike October, most major indices have stalled, failing to push on to new record highs.”
In the foreign exchange market, the dollar held firm. The dollar index , a measure of the U.S. currency against major rivals, was last up 0.2% at 99.545, snapping a four-day losing streak to reclaim a one-week high.
The dollar edged as much as 0.1% higher against the yen to 155.29, the Japanese currency’s weakest level since February 4 this year.
Gold was down 0.3% to $4030 an ounce while Brent crude futures slipped almost 0.5% in the Asian morning to $63.91 a barrel.
Bitcoin ticked up 0.3% after falling to a seven-month low of $91,174.66 earlier in the session, with losses of nearly 22% over three months.
Editing by Shri Navaratnam
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