Interest rate decisions in New Zealand and Thailand are the main events for Asian markets on Wednesday along with Chinese bank lending figures, as investors brace for a rocky open following Wall Street’s lackluster performance the previous day.
U.S. stocks closed in the green on Tuesday but only barely, despite the biggest one-day fall in Treasury yields in over a month, and a notable slide in oil prices.
Taken together, a case can be made that investor sentiment is fraying. With many benchmark stock indices and key commodity prices hovering at historic and even record highs, fatigue may be setting in.
Once again, however, Japan seems to be bucking the trend with the Nikkei 225 looking to test 40,000 points again and make a push to fresh all-time highs.
The yen‘s slide back towards 152 per dollar could facilitate that push, but will also probably spark another wave of verbal intervention from Japanese authorities. Actual FX market intervention is a real possibility if 152.00 breaks.