(Updates to Asia afternoon)

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Yen perks up, JGB yields soar after BOJ Governor Ueda

comments

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US economic data releases to influence market sentiment

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Investors eye Fed Chair Powell's comments for US rate cut

clues

By Ankur Banerjee

SINGAPORE, Dec 1 (Reuters) - Stocks fell on Monday after

a strong end to November as a bout of risk aversion gripped

markets even as U.S. rate-cut optimism remained intact, while

the beaten-down yen firmed and Japanese government bond yields

surged to their highest since 2008.

The spotlight in the currency market has been on the

Japanese yen, which strengthened to 155.55 per U.S.

dollar as Bank of Japan Governor Kazuo Ueda provided the

clearest signal yet that interest rate hike could be on the

cards soon.

Ueda said in a speech to business leaders that the central bank

would consider the "pros and cons" of raising rates at its next

policy meeting in two weeks.

After a strong comeback for equities in November, when

investors shrugged off worries of an AI bubble, traders were

looking for catalysts to continue any upward momentum, with the

focus this week on economic data.

U.S. stock futures slid, with S&P 500 futures down

0.7% and Nasdaq futures 0.8% lower. European futures

were also 0.3% lower. Cryptocurrencies bitcoin

and ether both slumped more than 5%, highlighting the

cooling risk appetite.

Hong Kong's Hang Seng, though, rose 0.7% but mood was

generally sober.

"There's no single headline driving today's risk-off tone,"

said Saxo's chief investment strategist Chaur Chanana, who

pointed to several pressure points, including rising JGB yields

and sliding cryptocurrencies.

"At the same time, weak China PMIs have revived stimulus

hopes, which is why Hong Kong stocks are bucking the regional

decline."

UEDA SPURS YEN STRENGTH

Ueda's comments strengthened the yen, pushed the Nikkei

down about 2% and Japanese government bond yields to

17-year highs.

The two-year JGB yield, the most sensitive to

the BOJ's policy rate, rose 3 basis points to 1.02%, while the

yield on 10-year JGBs rose 7 bps to 1.87%. Both

yields hit their highest since June 2008.

The market has been focusing on the yen for the last few

weeks, uncertain over the timing of the next interest rate hike

and concerned about fiscal policies under Prime Minister Sanae

Takaichi.

Traders have been wary of intervention to stem the yen's

decline in the wake of several verbal warnings from Tokyo

officials.

Fred Neumann, chief Asia economist at HSBC, said Ueda's

comments suggest that the BOJ is increasingly concerned about

the adverse effect of continued exchange rate depreciation on

consumer spending.

"Even if the BOJ hikes in December, which appears more

likely after Ueda's remarks today, investors will take a close

look at subsequent policy guidance. A hawkish hike in December

would go a long way to helping anchor exchange rate and bond

market expectations."

Investor focus this week will be on U.S. economic releases that

cover manufacturing and services activity as well as consumer

sentiment.

Matt Simpson, senior market analyst at StoneX in

Brisbane, said if the incoming data signalled a slowdown without

tipping into recession then sentiment would probably remain

upbeat while the U.S. dollar weakens as it typically does at

this time of year.

The dollar index, which measures the U.S. currency

against six other rivals, was at 99.414, little changed on the

day. The index has dropped 8% this year with much of the losses

coming in the first half of the year.

CONSUMER SPENDING IN FOCUS

Investors will watch out for comments from Federal Reserve

Chair Jerome Powell later in the day as they look for clues on

what the Fed will do when it meets next week.

Traders are pricing in an 87% chance of a cut after a slew of

dovish comments from policymakers in the last few days.

Attention will also be on holiday consumer spending as data

from Black Friday and Cyber Monday retail sales events trickle

in.

U.S. shoppers spent a record $11.8 billion online on Black

Friday, up 9.1% from 2024, according to Adobe Analytics, which

tracks visits shoppers make to online retail websites.

In commodities, oil prices rose after OPEC+ agreed to leave

oil output levels unchanged for the first quarter of 2026 as the

group slows its push to regain market share amid fears of a

looming supply glut.

Brent crude futures were 1% higher at $63.03 a

barrel. U.S. West Texas Intermediate crude was at $59.16

a barrel, up 0.99%.

(Reporting by Ankur Banerjee in Singapore; Editing by

Muralikumar Anantharaman, Kate Mayberry and Lincoln Feast.)