Singapore market trends Friday: Jitters as Japan may be next Trump trade target

Knife display at Daiso in SingaporeKnife display at Daiso in Singapore

Shares in Singapore will be hit by further jitters on Friday over the U.S. trade war amid indications the Trump administration was set to target Japan even as it was unwilling to reach a deal with China.

Japan’s Nikkei 225 was down 1.04 percent in early trade.

“The leads will hardly inspire Asia into reversing some of this negative sentiment, where traders still really want to understand the finer details around Trump’s $200 billion in additional tariffs on China,” Chris Weston, head of research at Pepperstone, said in a note on Friday.

“While trade dominates, Asia shouldn’t be too concerned about holding positions into the U.S. non-farm payrolls print [due later Friday] given last month was a fairly messy result and there was simply no move in markets. The view is really, show us a strong move in wages (from the prior month) and we’ll act on rates and the U.S. dollar,” Weston said.

Targeting Japan

U.S. President Trump reportedly told a Wall Street Journal opinion columnist that the good relations with Japan “will end as soon as I tell them how much they have to pay.” His comments come as Japan has been hit by two natural disasters — a typhoon and an earthquake — this week.

That’s just after Trump reportedly said he wasn’t ready to make a deal with China on trade. Bloomberg News reported last week, citing six people familiar with the matter, that Trump wants to impose the tariffs as soon as the comment period ends. China will likely immediately retaliate.

The Straits Times Index ended Thursday down 0.27 percent at 3147.69; September futures for the index were at 3147 on Thursday, while October futures were at 3152.

The Dow Jones Industrial Average ended Thursday up 0.08 percent at 25,995.87, the Nasdaq was down 0.91 percent at 7922.726 and the S&P 500 shed 0.37 percent at 2878.05. Futures for the three indexes were nose down in early trade Friday.

Hong Kong’s Hang Seng Index ended Thursday down 0.99 percent at 26,974.82, while China’s CSI 300 was off 1.07 percent at 3262.88.

Currencies

The U.S. dollar index, which measures the greenback against a basket of currencies, was at 95.03 at 7:57 A.M. SGT after trading in an around 95.0 to 95.17 range on Thursday, according to ICE futures data.

The 10-year U.S. Treasury note yield was at 2.875 percent at 8:07 A.M. SGT after rising as high as 2.912 percent on Thursday, according to Tullett Prebon data.

The euro/dollar was at 1.1617 at 8:09 A.M. SGT after trading in a 1.1604 to 1.1659 range on Thursday, according to DZHI data.

Yen strengthens

The dollar/yen was at 110.424 at 8:15 A.M. SGT after trading in a 110.50 to 111.513 range on Thursday, according to DZHI data.

Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, said the selloff in the dollar/yen pair was at least partly due to the Bank of Japan reducing the number of days they would buy bonds, which is seen as akin to tapering their quantitative easing program.

The pair was also hurt by jitters over China-U.S. trade talks and pressure on U.S. Treasury yields, she said.

The dollar/yuan ended Thursday at 6.8321 after trading in a 6.8205 to 6.8390 range on Thursday, according to DZHI data.

The U.S. dollar was fetching S$1.3754 at 8:17 A.M. SGT; the dollar/Sing traded in a 1.3734 to 1.3785 range on Thursday, according to DZHI data.

Oil

Nymex WTI crude oil futures for October were up 0.21 percent at US$67.91 a barrel at 7:45 A.M. SGT, while ICE Brent crude oil futures were down 1.0 percent at US$76.50 a barrel at 5:53 A.M. SGT, according to data from Bloomberg.

Read more: Crude prices mixed ahead of Asian open Friday

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