Asia Pacific stock markets see mixed performances with Singapore STI hitting new highs. Japanese yen rallies after election. The US dollar remains soft, supporting Gold's gains amid increased Fed rate cut bets.
Yen rises as Japan's ruling coalition loses majority, Gold gains on softer dollar
Asia Pacific stock markets have kicked off the week with mixed performances. The top performer so far is Singapore’s Straits Times Index, which continues to advance to a fresh all-time high and break new milestones by breaching the 4,200 psychological level. It recorded an intraday rally of 0.5% in today’s Asia mid-session to print an intraday high of 4,225.
Hong Kong’s Hang Seng Index added to its gains from last Friday after it did a bullish breakout above its 19 March 2025 high, it advanced by 0.3% in today’s Asia session. Meanwhile, Australia’s ASX 200 is down by -1.2%.
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Interestingly, the outcome of Sunday’s election results for Japan’s upper house parliament has led to a more upbeat tone in Japanese financial assets despite the ruling Liberal Democratic Party, along with longtime partner Komeito, losing its majority in the upper house.
Before the weekend election, market participants had priced in that the outcome would not be favourable to Japanese Prime Minister Ishiba’s ruling coalition; the Japanese yen and Nikkei 225 shed by -0.2% last Friday.
Since the outcome has turned out as expected and is almost fully priced in by the markets, the Japanese yen managed to recover some lost ground with an intraday gain of 0.40% against the US dollar after the yen hit a three-month low against the greenback last week. The Japanese stock market is closed for a public holiday today. Meanwhile, the Nikkei 225 futures traded in Globex recorded an intraday gain of 0.3%.
The US dollar has remained soft in today’s Asia session, riding on the dovish speech made by Fed Governor Waller last Friday, where he hinted, he would dissent against the “wait and hold” stances of his Fed colleagues, in favour of an interest rate cut in the upcoming FOMC meeting on 30 July.
So far, according to the latest data from CME FedWatch Tool, Fed funds futures traders have continued to price in a high chance of 95% that the Fed is likely to maintain its Fed funds rate at 4.25%-4.50% on 30 July, but have increased a rate cut bet of 25 basis points for the 17 September meeting as the odds to reduce the Fed funds rate to 4.00%-4.25% has increased to 61% from around 55% earlier at the start of last week.
In today’s Asian session, the Japanese yen is the strongest (0.4%) followed by the Aussie and sterling with an intraday gain of 0.2% respectively.
The softer tone seen in the US dollar has allowed Gold (XAU/USD) to record a second consecutive day of performance with an intraday gain of 0.6% as it seeks to retest its recent minor swing high of US$3,374 printed on 14 July.
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Our YouTube video above contains the latest intraday technical analysis on the latest intraday technical analysis on US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
