Dollar gives up recent gains; stocks in Japan, Australia slip
Equity markets in Asia largely paused Wednesday after a strong start to the week, with stocks in Japan and Australia underperforming as their countries' currencies made gains.
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In a development in claims that Russia might have meddled in the 2016 U.S. election, Donald Trump's eldest son released correspondence on Tuesday that showed communication with a Russian government attorney.
"The market is looking for any sign of risk events that can trigger the selloff that they are more positioned for," said Tareck Horchani, head of Asia-Pacific sales trading at Saxo Capital Markets. "So the dollar sold off on this news."
But not in a big way. The WSJ Dollar index eased 0.2% Tuesday, giving up a bit of its recent gains, and declined a further 0.1% in Asia on Wednesday.
With the yen rebounding from two-month lows versus the dollar, the Nikkei was recently down 0.3% after rising 1.3% the previous two days. The greenback slid to Yen113.60 after getting as high as Yen114.49 overnight.
The Australian dollar has also risen broadly in the past day, helping pressure stocks there as well. The S&P/ASX 200 slid 0.8% as the country's big banks, which are heavily weighted in the index, declined by upward of 1.5%.
U.S. stocks rebounded strongly from intraday lows to finish little changed on Tuesday.
Meanwhile, Hong Kong's Hang Seng Index jumped an additional 0.6% amid gains in China-based banks.
Beyond the White House, there is another reason for investors to focus on Washington on Wednesday. Federal Reserve chief Janet Yellen will kick off two days of semiannual testimony on Capitol Hill.
Her testimony will be closely watched for hints about whether a third rate increase of 2017 might come before the central bank is expected to start reducing its $4.5 trillion balance sheet.
Oil was among the other bright spots in Asia on Wednesday. After logging a 1.4% gain overnight, oil futures were up 1.5% more as the American Petroleum Institute said U.S. oil supplies fell by 8.1 million barrels last week. That is nearly triple what analysts expect the government's reading to say later Wednesday.
Australian oil stocks were up slightly despite that market's broader declines, while Japan's Inpex (1605.TO) gained 0.7%.
(END) Dow Jones Newswires
July 11, 2017 22:30 ET (02:30 GMT)