Gold Gains On Yellen Speech

Judith Bessette
Julho 16, 2017

Japanese stocks ended flat on Thursday, as gains in tech shares offset weakness in financial stocks after US yields slipped on Federal Reserve Chair Janet Yellen's comments.

Technology shares attracted buying as their US counterparts rallied, with Tokyo Electron Ltd ending 3 percent higher and Murata Manufacturing Co Ltd closing 1.1 percent higher. The Fed's main gauge for inflation, the personal consumption expenditures price index, rose only 1.4 percent in May from the previous year. Chinese shares bucked the positive trend, with the CSI 300 index falling 0.1%, and the Shanghai Composite down 0.2%.

On Wall Street, the broader based S&P 500 is up just over three at 2,446, while the tech heavy Nasdaq was down 0.01 at 6,261. The NASDAQ rose 51 points (0.85 percent) and the Standard & Poors 500 ticked up 17 points (0.7 percent).

The US economy grew at a "slight to moderate" pace over the last several weeks across all regions of the country, with wage pressures reported for both low- and high-skilled jobs, the Federal Reserve reported yesterday in its latest compendium of regional economic activity.

Oil stumbled after settling higher overnight. Moreover, energy shares continued to move north due to increase in oil prices as EIA reported a weekly decline in USA crude stockpiles.

Yellen Speech to Influence Markets
Meanwhile, the Nasdaq Composite Index rose 67.87 points, or 1.1%, to 6,261.17, for a fourth straight day of gains. The Nikkei closed 0.01 percent higher at 20,099.81, while the broader Topix ended down 0.01 percent to 1,619.11.

Oil prices, which generally affect sentiment in the Gulf region, were also relatively stable, with Brent crude futures rising 1 cent to $47.75 a barrel, while US crude was unchanged at $45.49. This had offset higher levels of production noted in an International Energy Agency report. A total of around 6.1 billion shares were traded on Wednesday, much lower than the last 20-session average of 6.9 billion shares.

"After all, Yellen's comment capped gains in the Japanese market as value stocks such as banks and autos weakened", said Takuya Takahashi, a strategist at Daiwa Securities. Results of the strike will be known after the market close.

Gold was steady at $1,216.58 an ounce, heading for a 0.3% gain for the week.

Among stocks, Target rose 4.5 percent after the retailer gave an upbeat second-quarter forecast. Year-on-year CPI has been softening steadily since February, when it hit 2.7 percent.

The dollar inched higher against the Singapore dollar to trade at S$1.3742 at 8:15 a.m. HK/SIN following the news compared to levels around the S$1.3738 seen before. China's trade surplus grew to $42.77 billion in June as exports to the United States and the European Union grew by 19.9% and 15.2% from a year earlier. Inflation was flat, while a reading of retail sales slumped, emphasizing persistent weakness in that sector and underlining consumer reluctance to spend freely.

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