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Asia cautious before the central bank, data firm



SYDNEY (Reuters) – Asian stock markets drifted lower on Monday as currencies stayed in familiar territory a week ago, peppered with central bank meetings, corporate earnings and inflation and US wage updates.

FILE PHOTO: On August 21, 2015, in Kuala Lumpur, Malaysia, pedestrians are reflected on the screen of a money changer. REUTERS / Olivia Harris / File photo

The Japanese Nikkei .N225 lost 0.4 percent in early trading, while Tech also in South Korea .KS1

1 dropped 0.2 percent.

MSCI's broadest index for Asia-Pacific equities outside of Japan. The MIAPJ0000PUS slipped by 0.03 percent.

Next week's quarterly results will be released by more than 140 S & P 500 companies, including Apple Inc. ( AAPL.O ).

Disappointing results from Intel Corp. ( INTC.O ) and Twitter Inc ( TWTR.N ) worsened sentiment on the Nasdaq .IXIC on Friday, despite the S & P 500 <. SPX) and Dow .DJI ended even firmer for the week.

JPMorgan analysts cited relatively aggressive moves in "value" stocks – especially banks – and away from stocks that were particularly used for growth.

A man looks at an electronic tablet with market indexes outside a brokerage firm in Tokyo, Japan, March 2, 2016. REUTERS / Thomas Peter

"Technology really cracked on Tuesday before the locks were opened on Friday," they wrote in a note.

"The rotation is likely to continue, which benefits value categories at the expense of Momentum / Tech as interest rates are more distorted," they added. CENTRAL BANK CLOCK

The US Federal Reserve meets on Tuesday and Wednesday and is widely expected to confirm the outlook for further gradual rate hikes.

The market is priced in almost completely for a September rate hike and is heading for another move ahead of year-end.

A Political Session of the Bank of Japan on Tuesday has become more important, as it could be said that it could streamline its massive buying campaign.

Elias Haddad, a senior currency strategist at the Commonwealth Bank of Australia, doubted that the BoJ would move at that time, but said he could give up the negative interest rate on financial institution accounts at the central bank.

The BoJ could also change its annual target of accumulating $ 80 trillion of Japanese government bonds ($ 720 billion) and potentially raising its target yield on 10-year Japanese government bonds. These returns reached their highest level since January 2016 last week.

"Any of these policy changes would be interpreted as a move towards less monetary accommodation that would pull down USD / JPY," Haddad said.

It is the likelihood of such a shift that has thrown the yen higher in the past week or so, pushing the dollar from a high of 113.18 earlier that month to around 110.96 yen (JPY = US $) ,

Against a basket of currencies, the dollar hovered at 94,680 .DXY after repeatedly breaking the resistance at 95,652 this month.

The euro had its own problems as the European Central Bank stressed that interest rates would not rise until the second half of next year. On Monday, the Euro was at € 1.1658 = EBS, between support around $ 1.1570 and resistance at $ 1.1750.

In Asia, eyes will be on the Chinese Yuan, having suffered its longest weekly loss series since November 2015. He reached a 13-month low at 6.8369 per dollar CNY last week.

Commodity oil prices have been helped by easing of trade tensions and the temporary closure of an important shipping lane through Saudi Arabia. [Q/R]

U.S. Crude CLc1 added 25 cents to $ 68.94 in early trading, while Brent LCOc1 rose 1 cent to $ 74.30 a barrel.

Spot gold XAU = eased a touch to $ 1,222.52.

Reporting by Wayne Cole; Editing by Joseph Radford

Our Standards: The Thomson Reuters Trust Principles.

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