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Japanese Yen Hits Lowest Level Of 2024

The Japanese Yen weakened to its worst level of 2024 against the U.S. dollar on Tuesday, climbing above the 150 level and approaching 151 by the end of the normal trading day in the U.S. The drop in the Yen occurred after the Bank of Japan delivered a historic rate hike overnight that ended the world’s last negative interest rate policy. The move also boosted Japanese bonds and equities overnight.

The Yen has lost more than 1% of its value against the U.S. dollar over the past 24 hours, reaching a low of 150.96 mid-afternoon in New York before pulling back slightly from the 151.00 level. Notably, Bank of Japan Governor Kazuo Ueda said that while it’s important to keep rates low to support the Japanese economy, it is possible that more rate hikes could be coming if inflation accelerates.

Markets were largely expecting this move away from negative interest rates, with 90% of central bank watchers calling for the central bank to end its negative interest rate policy. Adding to the likelihood of the rate hike was the recent larger than expected wage hike in Japan’s largest union during negotiations.

The drop in the Yen despite a rate hike was attributed to the fact that a rate hike was largely priced in already, combined with a dovish tone from the BoJ and the remaining large gap in rates between Japan and the U.S. The Yen was already slipping in the week leading up to the rate decision as traders are also seeing a decreased chance of rate cuts in the U.S.

The weaker Yen has also driven Japanese equities higher, with the Nikkei hitting its highest level ever, breaking a record that’s stood since 1989.

Asian Daily Market Review

Asian markets fell on Friday following overnight losses on Wall Street as stronger than expected inflation data dashed investor hopes for interest rates to begin easing sooner rather than later. The U.S. producer price index showed inflation is still running hotter than expected, meaning the Federal Reserve may hold off beyond its June meeting before cutting interest rates. With inflation looking stickier than hoped for it looks like the Fed will need to keep higher rates if they want to meet their 2% inflation goal.

Japan’s Nikkei saw a 0.3% pullback following the data, while the Yen retreated against the U.S. dollar. Shares of Softbank Group added 0.5%, while Sony shares edged higher by 0.1%. Among the major exporters Toyota gained 1.3%, Panasonic shares rose by 1.2%, and Canon tacked on 0.2%.

In Australia the S&P/ASX 200 finished the day 0.6% lower, with the big four banks mixed on the day. Shares of NAB climbed 0.9% higher and ANZ inched up by less than 0.1%, but Commonwealth Bank fell by 0.6% and Westpac was 1.1% lower. The major miners weighed on the broader market as BHP lost 1.5% and Rio Tinto retreated by 1.9%.

Mainland Chinese markets bucked the falling trend around the region, with the benchmark Shanghai Composite adding 0.5% and the smaller cap Shenzhen Composite finishing 0.6% higher. Over in Hong Kong the Hang Seng took its cues from the broader Asian region, dropping by 1.4%.

In South Korea the Kospi fell by 1.9% to lead losses for the region, while Taiwan’s Taiex lost 1.3% on the day.

Southeast Asian markets were mixed as Malaysia’s KLCI advanced by 0.6%, while Singapore’s Straits Times Index finished 0.4% lower.

U.S. Daily Market Review

The S&P-500 retreated today and was on track to end the week into a lower side.

Technology stocks came under pressure as inflation fears are still in the ahead of the Federal Reserve’s policy meeting next week.

The Dow Jones Industrial Average lost 210 points, or 0.5%.

The Nasdaq Composite fell 1%. The Nasdaq have shed 0.2% and 0.7%.

Shares of Amazon and Google-parent Alphabet also fell. Nvidia managed to recovery around 1%. The chipmaker has whipsawed this week as the markets are concerned with the stock’s valuation and profit figures.

Dollar General is dropped back on self-checkout as it tries to curtail retail theft across its stores. The company will remove self-checkout registers from 300 stores that have registered troubles.

US airline stocks are heading for the worst two-week falling pattern since October. This is the case of volatile fuel prices and rising issues with Boeing Co.

European Daily Market Review

A European markets partly advanced today as investors reviewed U.S. inflation data.

European stocks markets are in their eighth consecutive week of rallies, the longest since 2018.

The markets are boosted by predictions thatby conviction that euro interest rates could tumble in the coming months.

The German DAX inclined 45.28 or 0.25% from 17,987.The French CAC-40 gained 24.77 or 0.30% from 8186.

FTSE-100 slipped 4.27 or 0.06% from 7,738.Shares of Porsche AG jumped yesterday after the German luxury carmaker forecast a tougher 2024, but also reported a dividend.

The pan-European Stoxx 600 fell 0.2% higher at around 10:30 a.m. London time, paring earlier losses.

Shares of Vonovia dropped 6% this morning shortly after Germany’s largest landlord announced its biggest ever annual retreat.

In fact, the residential real estate company on Thursday declared an annual loss of 6.76 billion euros ($7.35 billion) for 2023.

Ukraine’s armed forces attacked a small oil refinery in Russia’s Kaluga region with drones this morning.

Kyiv has carried out a string of drone attacks on major Russian oil facilities in the last week, hoping to harm the Russian economy.

Microsoft Adding To Its Generative AI Product Line

Shares of Microsoft were at the top of the Dow Industrials on Thursday, hitting a new all-time high and adding 2.4% by the close. The rally came as the company announced it will be releasing Copilot for Security, an AI tool to help businesses fight cybersecurity attacks, on April 1 this year. Gains came despite an overall bearish attitude on Wall Street Thursday in response to stronger than expected producer price inflation data.

Copilot for Security was first announced by Microsoft a year ago in March 2023. The generative AI tool is used to help businesses of all sizes quickly respond to and defend from cybersecurity attacks. Microsoft plans on offering the tool through a pay as you go subscription model. This can help smaller businesses access the tool, and as the business grows it can update its usage and costs according to its needs and budget.

Wells Fargo analyst Michael Turrin, who rates Microsoft overweight with a $460 price target, said in a note to clients that he believes this type of pricing model will help encourage adoption, similar to what’s been seen with many other service as a subscription products. The $460 price target represents a roughly 10% upside from Thursday’s close.

J.P. Morgan analyst Mark Murphy also believes that Copilot for Security will be positive for Microsoft’s growth. Murphy also has an overweight rating on the stock with a $440 price target. He sees a strong product/market fit for the generative AI product due to its code generation, pattern recognition, and automated remediation capabilities.

Microsoft shares are up 13.1% in 2024 versus a 3.2% gain for the Dow Industrials.

Oil Rallies On U.S. Drawdown And Attacks On Russian Refineries

Crude oil prices were up nearly 3% on Wednesday, reaching a four-month high after data showed a larger than expected drop in U.S. crude and gasoline inventories. Also spurring gains for the market was news of attacks on Russian refineries by Ukraine forces, with at least one Rosneft plant damaged.

The global benchmark Brent crude rose $2.11, or 2.6%, to settle at $84.03 a barrel, while the U.S. benchmark West Texas Intermediate (WTI) crude rose $2.16, or 2.8%, to settle at $79.72.

The gains came following a report from the U.S. Energy Information Administration (EIA) showing a drop of 1.5 million barrels of crude from U.S. stockpiles for the week ending March 8. Consensus expectations were looking for a smaller drop of 1.3 million barrels.

Additionally, the EIA data showed that 5.7 million barrels of gasoline were pulled from stocks in the same week. Analysts were forecasting a far smaller drawdown of 1.9 million barrels.

The drop in gasoline stockpiles was most concerning to traders as seasonal maintenance outages loom, and the summer driving season is just around the corner. Some analysts are now projecting far higher gasoline prices over the summer months.

In other news, Ukraine forces struck at Russian refineries for a second consecutive day of heavy drone attacks, causing a fire at one of Rosneft’s largest refineries. The attacks come just days before Russia’s presidential elections, with current president Vladimir Putin expressing his concerns that the attacks are an attempt to disrupt the elections.

Damage to Russia’s refining capacity could cause a drop in Russian exports of diesel as well as increased Russian imports of gasoline, which would cause a global increase in crude prices.