The auction was a big disappointment. Its ‘tail’ – how much higher the yield at sale was relative to where it traded before – was a massive 3 basis points, and demand was 2.32 times the amount of debt on offer, the weakest since December 2022.
Also, bear in mind that MSCI’s benchmark Asian and emerging market stock indexes chalked up strong gains on Wednesday of 1.8% and 1.9%, respectively, their best performance in two months. They may struggle to maintain much momentum on Thursday.
There is a decent sprinkling of regional event risk in Asia with Philippines GDP, Japanese current account, Taiwan trade numbers and a Reserve Bank of India policy decision all on tap.
The BOJ also releases the summary of opinions from its instantly historic July 30-31 policy meeting that some analysts say contributed to the current market turbulence.
Investors are still mulling BOJ Deputy Governor Shinichi Uchida’s remarks on Wednesday that the central bank won’t raise interest rates when financial markets are unstable, and that recent market turbulence is “clearly a downside risk to the economy.”
This helped lift the Nikkei and slammed the yen – in late U.S. trading the currency was down 1.8% against the dollar for its biggest daily fall in 18 months.
