US indices

US indices ended Thursday’s session in the red. The Dow Jones Industrial Average (DJIA) is on track to post its worst weekly performance in 2024. Asia–Pacific (APAC) equity markets followed the US lead, with Japan’s Nikkei shedding more than 2%.

Bank of Japan

The yen showed signs of strengthening overnight against the USD but has stayed comfortably above 150 for the past two weeks. Despite the Bank of Japan (BOJ)'s exit from ultra-loose policy at its last meeting, The Japanese currency has remained weak, as comments accompanying the decision indicated that the next rate hike will be some time away.

The yen

That JPY weakness is not what the Bank of Japan was expecting. In an interview with Asahi newspaper published this Friday, BOJ governor Kasuo Ueda warned that "if exchange-rate developments appear to have an impact on Japan's wage-inflation cycle in a way that's hard to dismiss, that would be a reason to respond with monetary policy." A weak yen inflates the cost of importing raw materials and fuel, thereby hurting retailers and consumers.

Australian trade surplus

In Australia, the trade surplus narrowed to A$7.28 billion in February, below market forecasts of A$10.4 billion. It was the smallest trade surplus since last September, as exports fell while imports grew. Exports shrank by 2.2%, mainly due to a fall in shipments to China, Australia's largest trading partner. Meanwhile, imports rose 4.8%.

UK Halilfax house price index

Here in the UK, the Halilfax house price index fell by 1% in March compared to February. economist had anticipated a 0.1% rise. Year-on-year, the index rose by 0.3%, also missing expectations.

Non-farm payrolls

Non-farm payrolls are due at 1.30 p.m. The market sees 200,000 job creations for the month of March, after 275,000 in February. The unemployment rate is seen as unchanged at 3.9%. As for average hourly earnings, expectations are for a 0.3% rise month-over-month (MoM) and 4.1% year-over-year (YoY). The US economy has stayed relatively strong in the past few months, which led the market to believe that the Fed rate cuts could be delayed.