TOKYO (Reuters) – Global equity markets moved into the year-end after another turnaround this week amid heavy cloud.
FILE PHOTO: Men look at stock prices before a brokerage on December 5, 201
Asian stocks were buoyant on Wednesday after Wall Street's slump on Christmas Eve on a series of worrying political developments in the US, including a US federal shutdown and increasingly dismissive opposition from President Donald Trump to the chairman of the Federal Reserve.
US. Treasury Secretary Steven Mnuchin also expressed concern about the market given the weakening of equities.
The S & P 500 e-mini futures were virtually flat, suggesting a muted start to Wall Street as the US market reopened after Christmas, when many of the world's financial markets were closed.
MSCI's broadest index for Asia-Pacific equities outside Japan fell 0.1 percent.
The Japanese Nikkei recovered 1.8 percent after slipping 5 percent the previous day to a 20-month low and slipping into bear market territory.
"In addition to the concerns of the US economy, markets must now deal with the growing turmoil in the White House, which has increased policy risk before the end of the year," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
US. Stocks have fallen sharply in recent weeks amid concerns about weaker economic growth. Trump has largely blamed the US Federal Reserve for the economic headwind and openly criticized its appointed chairman, Jerome Powell.
That shook investors further as they grappled with worries about global growth, corporate profits and US-Chinese trading tensions.
To reassure investors, Minister of Finance Mnuchin spoke on Sunday to the heads of the six largest US banks, who confirmed that they had sufficient liquidity for further lending and that "the markets continue to function properly."
US. Bond yields declined as market returns, including a strong sell-off in the oil sector, led investors into safe-haven bonds, fueling growing pressure on the dollar.
The dollar traded at 110.56 yen, having retreated overnight against its Japanese peer to a four-month low of 110.00, which also tends to drive demand as a safe haven in times of market volatility and economic stress to attract.
The Euro rose 0.25 percent to $ 1.1418.
The 10-year Treasury yield was 2.747 percent after dropping 2.733 percent on Monday. This is the lowest value since the beginning of April.
Crude oil futures in the US rose 1.35 percent to $ 43.11 a barrel, down 6.7 percent on Monday.
Oil prices dropped to their lowest level in more than a year on Monday, as bearish equities fueled fears of a slowdown.
Safe haven gold was well bid and spot prices reached a high of $ 1,270.25 per ounce at six months.
Editing by Shri Navaratnam