TOKYO, July 20 2018 : Asian stocks eked out modest gains today as investor caution prevailed amid concerns about the European Union imposing retaliatory tariffs on U.S. goods while U.S. President Donald Trump’s criticism of Federal Reserve policy knocked the dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1 percent.
Australian stocks added 0.5 percent and South Korea’s KOSPI .KS11 edged up 0.07 percent. Japan’s Nikkei .N225 reversed earlier modest losses to rise 0.2 percent, lifted as the dollar came off lows versus the yen.
“The latest trade headlines have drawn attention as they come from Europe,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo. “So any action by the EU will not come into effect right away, and negative responses by the equities could peter out after one or two days with the markets regaining calm.”
But the Dow has gained about 0.2 percent this week during which it touched a one-month high thanks to strong corporate earnings.
However, comments from President Trump criticizing Fed policy and expressing concern about the potential impact of rising rates and a stronger dollar on the U.S. economy and American corporate competitiveness hosed down the greenback’s recent rally.
The dollar pulled back from a recent one-year high against most of its peers earlier on Thursday after the comments.
Later, the White House said in a statement that Trump respects the Fed’s independence and was not interfering with its policy decisions.
The dollar index against a basket of six major currencies stood little changed at 95.151 after being knocked down from 95.652, its highest level since July 2017.
The euro edged up 0.1 percent to $1.1655 EUR=, lifted from a three-week trough of $1.1575 set overnight. The single currency has lost about 0.2 percent this week.
The greenback was, however, up 0.1 percent at 112.57 yen JPY= after going as low as 112.35 earlier in the session. It has been knocked away from one-year peak of 113.18 scaled yesterday. It was still up 1.7 percent on the week, boosted earlier after Fed’s Powell reinforced expectations for gradual, steady rate increases.
Brent crude futures rose 0.3 percent to $72.80 a barrel as the dollar flagged, trimming some of their overnight losses.