Caution rules Asian markets as central banks meet today

The dollar edged up on Thursday as investors switched their focus from political concerns to speculation over shifts in monetary policy as the annual Jackson Hole gathering begins. Investors are looking for any hint of monetary policy plans.
Pedestrians walk past an electronic stock board outside a securities firm in Tokyo, Japan.
Pedestrians walk past an electronic stock board outside a securities firm in Tokyo, Japan. PHOTO: BLOOMBERG

SYDNEY (BLOOMBERG) - Asian stocks opened mixed and Australian bonds fell on Friday (Aug 25) as investors await comments from central bankers meeting at Jackson Hole and as political wrangling continues in Washington.

Japan's Topix index was up 0.1 per cent as of 9:28am in Tokyo. The S&P/ASX 200 Index in Sydney fell 0.4 per cent and South Korea's Kospi index was little changed.

Contracts on the S&P 500 were flat. The underlying gauge fell 0.2 per cent on Thursday and is down more than 1 per cent for the month. Amazon.com's plan to cut prices at Whole Foods locations next week weighed on US food retailers.

In a week when traders had little to go on and the northern summer kept volumes suppressed, equity markets held in tight ranges as investors focused on the forum in Jackson Hole, Wyoming. Though European Central Bank president Mario Draghi isn't expected to offer a fresh policy message, his speech and that of Federal Reserve chair Janet Yellen on Friday will be parsed for clues on the timing of reductions in stimulus. Yellen is scheduled to discuss financial stability at 10am New York time while Draghi is set to speak at 3pm.

Two Fed officials offered opposing views on Thursday on the inflation debate. Kansas City's Esther George said another rate hike is feasible this year if US data holds up. Dallas's Robert Kaplan called for patience in waiting for prices to go higher.

Meanwhile, President Donald Trump took to Twitter to fuel the debate on legislation to keep the US government open next month. Trump blasted Republican leaders for ignoring his advice on raising the debt ceiling and creating a "mess." Countering, House Speaker Paul Ryan said the borrowing limit will be raised. Rates on short-term Treasury bills spiked amid concern Congress and the White House may not act in time.

The Bloomberg Dollar Spot Index was flat after gaining 0.2 per cent, targeting its first monthly rise in six months.

The Japanese yen was little changed at 109.55 per dollar after falling 0.5 per cent.

The euro was little changed at US$1.1796.

West Texas Intermediate crude added 0.6 per cent to US$47.73 a barrel after declining about 2 per cent, on track for its fourth weekly decline. Hurricane Harvey is forecast to turn into a Category 3 storm when it makes landfall late Friday in an area of Texas thick with oil refineries and natural gas plants.

Gold was flat at US$1,286.80 an ounce, set to rise for the second month in a row. It dropped 0.4 per cent in the previous session.