Asia stocks mixed, US dollar slips as Fed chief pick looms

Pedestrians are reflected in the window of a securities company showing an electronics stock indicator in Tokyo.
Pedestrians are reflected in the window of a securities company showing an electronics stock indicator in Tokyo.PHOTO: AFP

SYDNEY (BLOOMBERG) - Asian stocks were mixed and the rally in the US dollar petered out on Wednesday (Oct 4) as investors awaited fresh triggers for trades from President Donald Trump's pending decision on the leadership of the Federal Reserve, along with upcoming policy maker speeches and US economic data.

The Bloomberg dollar index retreated from recent highs and Treasury yields edged lower as news emerged that Trump has been presented with a shortlist of Fed chair candidates with a spectrum of views on policy. Ex-Fed board member Kevin Warsh had been seen as a potential pick who would favor more aggressive monetary tightening, while current board member Jerome Powell is considered in sync with current chair Janet Yellen's gradualist approach.

Japan's Topix index was little changed at 1,683.82. Australia's S&P/ASX 200 Index fell 0.7 per cent. Futures on Hong Kong's Hang Seng index added 0.3 per cent.

Markets in South Korea, China and Taiwan are closed for a holiday.

Futures on the S&P 500 Index were little changed as of 9:54am in Tokyo. The underlying gauge rose 0.2 per cent extending this year's gain to 13 per cent. Carmakers jumped after data indicated the US auto market probably expanded for the first time this year.

A number of Fed speakers are on the schedule later this week, and Friday brings the monthly employment report, though that might be a cloudier gauge than usual due to the impact of hurricanes.

The Bloomberg Dollar Spot Index fell 0.2 per cent, though is still up for the week so far.

The yen advanced 0.3 per cent to 112.57 per dollar.

The euro rose 0.3 per cent to US$1.1776. With Spanish Prime Minister Mariano Rajoy fighting to maintain control after 2.3 million Catalans voted in Sunday's makeshift referendum, Catalan President Carles Puigdemont said he will declare independence within days.

The pound was up 0.2 per cent at US$1.3267.

The yield on 10-year Treasuries retreated 1 basis point, to 2.31 per cent. A JPMorgan Chase & Co survey found clients are the most short in the world's largest bond market in more than a decade.

Yields on Australian 10-year bonds slid 3 basis points to 2.81 per cent.

Gold rose 0.3 per cent to US$1,275.30 an ounce.

West Texas Intermediate crude dropped 0.7 per cent to US$50.08 a barrel.