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BOJ holds rates as expected, yen a fraction firmer
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Nikkei down slightly, US and European futures dip
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All eyes on Apple ( AAPL ) and Amazon ( AMZN ) earnings updates
(Updates prices at 0620 GMT)
By Kevin Buckland
TOKYO, Oct 31 (Reuters) - Asian stocks slid on Thursday
as chip-sector stocks tracked overnight declines by Wall Street
peers, while Facebook owner Meta Platforms ( META ) and
Microsoft ( MSFT ) both warned of accelerating costs for
artificial intelligence.
That stoked worries for the same from Amazon ( AMZN ), which
reports earnings along with Apple ( AAPL ) later in the day.
The yen rose from near a three-month low against the dollar,
with the statement accompanying the Bank of Japan's as-expected
on-hold decision on Thursday containing some hawkish undertones,
spurring some analysts to flag the possibility of a December
interest rate hike.
More broadly, the dollar was taking a breather, having
pulled back from a near three-month peak to major peers on
Wednesday.
Investors were also treading warily ahead of U.S. non-farm
payrolls data on Friday, the presidential election next Tuesday
and a Federal Reserve policy decision on Thursday.
Japan's Nikkei share average ended the day down
0.5%. South Korea's Kospi dropped 1.5%.
North Korea stirred regional tensions by test firing what a
U.S. official said was an intercontinental ballistic missile on
Thursday.
Hong Kong's Hang Seng added 0.3%, and mainland
Chinese blue chips rose 0.2%, reversing an earlier
decline, after surveys on manufacturing and services in China
did show some pick up in activity.
Investors are awaiting more clarity on stimulus from Beijing
next week, when officials convene a week-long congress.
Taiwanese markets were shuttered due to a typhoon.
S&P 500 futures eased 0.5%, while Nasdaq futures
dipped 0.8%. The Philadelphia SE semiconductor index
slumped 3.35% overnight, with Advanced Micro Devices ( AMD )
tumbling more than 10% following dour forecasts.
EUROSTOXX 50 futures and DAX futures both
eased about 0.4%, while FTSE futures fell 0.3%.
"Sentiment is shakier this morning," said Michael Brown, a
senior research strategist at Pepperstone.
"Meta's increasing capex on AI technology exerted pressure,
as risks around the theme continue to become more two-sided," he
said. "This, of course, tees things up in somewhat precarious
fashion for Nvidia ( NVDA ) earnings."
AI darling Nvidia ( NVDA ) is the last of the so-called
"Magnificent 7" megacap tech companies to report earnings, in
about three weeks from now. Tesla reported last week,
with Alphabet following on Tuesday.
TOUGH MONTH FOR YEN
The U.S. dollar index was steady at 104.10 following
its pullback from the highest since Aug. 2 at 104.63 reached on
Tuesday.
The dollar eased 0.4% on the yen to 152.80,
although that was still not far from this week's high of
153.885.
Nikko Asset Management's chief global strategist, Naomi
Fink, noted "some hawkish rhetoric" in the BOJ's policy
statement, including "inflationary risks biased toward the
upside" for next fiscal year.
"I wouldn't rule out a December rate hike, especially if the
yen weakens further," she said.
The dollar is still up a heady 6.4% so far in October as
political uncertainty in Japan following the coalition
government's lost majority in parliamentary elections at the
weekend, which potentially delays BOJ policy normalisation.
"Japan's messy political situation is a boon for currency
speculators," said Shoki Omori, chief Japan desk strategist at
Mizuho Securities. But for the most part, "the ball is on the
dollar side," he said.
"If the U.S. sees more mixed data, we might see higher
volatility in the pair," Omori said. "Non-farm payrolls is going
to change the picture if it comes out completely different from
consensus."
The personal consumption expenditures index, the Fed's
preferred measure of inflation, is also due later on Thursday.
Meanwhile, in the final stretch of the U.S. presidential
contest, opinion polls still put Republican Donald Trump and
Democrat Kamala Harris neck-and-neck, although financial markets
and some betting platforms have been leaning towards a Trump
victory.
Gold reached a fresh all-time high of $2,790.15 per
ounce.
Oil prices extended a rally from Wednesday, driven by
optimism over U.S. fuel demand following an unexpected drop in
crude and gasoline inventories.
Brent crude futures gained 0.6% to $72.99 a barrel
and U.S. West Texas Intermediate crude futures climbed
0.7% to $69.05 per barrel. Both contracts rose more than 2% in
the previous session.