By Rae Wee and Amanda Cooper
LONDON/SINGAPORE (Reuters) -Global shares rose on Thursday, heading for their second quarterly gain, while a strong dollar kept the yen languishing near its weakest in decades, with the threat of intervention from Japanese authorities warding off any renewed selling.
Markets were largely rangebound ahead of Friday’s much-anticipated U.S. core personal consumption expenditures (PCE) price index data, the Federal Reserve’s preferred measure of inflation. Few markets will be open to assess and respond to the new data, however, given the long Easter weekend in many countries.
Heightened focus was also on the yen, which was last little changed at 151.28 per dollar, having slid to a 34-year low of 151.975 in the previous session. [FRX/]
Japan’s three main monetary authorities held an emergency meeting on Wednesday to discuss the weak yen, and suggested they were ready to intervene in the market to stop what they described as disorderly and speculative moves in the currency.
That came after officials ramped up verbal warnings to stem the yen’s fall, with Finance Minister Shunichi Suzuki saying “decisive steps” will be taken against excessive currency moves.
Japanese authorities last intervened to support the yen in 2022, when they also used phrases such as “deeply concerned” and pledged to take “decisive steps” prior to intervention.
“Contrary to popular belief of 152 as the line in the sand, I think it’s more of the magnitude of the move that may matter,” said Christopher Wong, a currency strategist at OCBC.
“There is also a limit to how far verbal intervention can go. Nonetheless, the actual intervention risk is still high, if not higher.”
The sliding yen has been a boon for index, which is up about 3% for the month thus far. It closed more than 1% lower. ()
In China, the yuan, which has similarly come under close scrutiny as it continues to struggle on the weaker side of the key 7.2 per dollar level, steadied at 7.2268. It drew support from a strong fix by the People’s Bank of China on Thursday, as Beijing remains vigilant to any sharp sell-off in the currency.
The central bank set the midpoint rate, around which the yuan is allowed to trade in a 2% band, 1,311 pips stronger than a Reuters’ estimate, the widest gap since November 2023.
DOLLAR POWER
The dollar was on the front foot, helped in part by comments from Fed Governor Christopher Waller, who said late on Wednesday there was no rush to ease interest rates.
Friday’s PCE reading could stir up some volatility, especially if it impacts the outlook for rates, analysts said.
“PCE inflation certainly could move markets, especially if an upward surprise. We had the push back from the hawks with Waller overnight and anything that could give that fodder could be market moving,” said Peter Schaffrik, chief European macro strategist at RBC Capital Markets.
While a more than 50% chance of a first Fed cut in June continues to be priced in, traders are placing greater bets for similar moves by the European Central Bank and the Bank of England that same month.
The euro fell 0.3% to $1.0795, while sterling slipped 0.1% to $1.2626.
“(The dollar) is still being swayed by the relative hawkishness of the Fed, taking all 19 policymakers together, and other central banks, who have tilted even more toward dovish in their tone recently,” said Thierry Wizman, global FX and rates strategist at Macquarie.
Earlier this week, the renewed dollar strength had tempered a blistering rally in gold that sent it to a record peak last week. But by Thursday, the price was up 0.6% at $2,206 an ounce.
Oil prices also rose, with futures up 1.5% at $87.40 a barrel, while was up 1.6% at $82.65.
