(Updated at 5:05 p.m. (2105 GMT))
By Chris Prentice and Ankur Banerjee
NEW YORK/LONDON, April 24 (Reuters) - U.S. and European
shares finished mixed on Wednesday ahead of more corporate
earnings this week, and the yen was mired near 34-year lows,
keeping traders wary of intervention from Japan.
An auction of a record $70 billion worth of five-year U.S.
Treasury notes on Wednesday helped to push bond yields higher,
pressuring equities.
MSCI's gauge of stocks across the globe
rose 1.31 points, or 0.17%, to 759.46.
On Wall Street, the S&P 500 closed slightly higher after
choppy trading.
Europe's broad STOXX 600 index closed down 0.5% as
financial stocks dragged the index off a more than one-week
peak.
The S&P 500 gained 1.08 points, or 0.02%, to 5,071.63
and the Nasdaq Composite gained 16.11 points, or 0.10%,
to 15,712.75. The Dow Jones Industrial Average fell 42.77
points, or 0.11%, to 38,460.92.
"This week is getting back to market fundamentals and
earnings. At least temporarily, we are sidestepping geopolitics
which have been impacting markets in the last two weeks," said
Samy Chaar, chief economist at Lombard Odier.
Spot gold continued its slide, trading down 0.26%
to $2,315.82 an ounce. U.S. gold futures settled 0.2%
lower at $2,338.4.
DATA DIVERGENCE
Purchasing Managers Index surveys on Tuesday showed overall
business activity in the euro zone and in Britain expanded at
their fastest pace in nearly a year, while business activity
cooled in the U.S.
That divergence helped the euro nudge above $1.07
in Asia trade, its highest in more than a week.
"For once, US-eurozone divergence in data has come to the
benefit of euro/dollar," said Francesco Pesole, currency
strategist at ING, in a note.
"(Though) hard data - inflation and employment above all -
has been the real drag on the pair so far, so caution is
warranted when it comes to rallies prompted by activity surveys
like PMIs."
U.S. gross domestic product and March personal consumption
expenditure data due later this week will be crucial for the
dollar and for investors' attempts to gauge the path of U.S.
rates.
Traders expect the Federal Reserve to start easing rates in
September and ending the year with 42 basis points of cuts, down
from previous bets for 150 bps.
"One thing is fore sure: the Fed is not raising rates. I
believe they want to tighten financial conditions by
communicating a further distance is required for cuts, but they
can do those cuts at whatever speed is necessary," said Jamie
Cox, managing partner for Harris Financial Group in Richmond,
Virginia.
INTERVENTION ZONE
The drastic shift in rate expectations has elevated Treasury
yields and lifted the dollar in the past few weeks, with
pressure felt particularly in Asia.
In the latest illustration, Indonesia's central bank
delivered a surprise rate hike on Wednesday, stepping up efforts
to support the rupiah currency.
The Japanese yen weakened 0.09% against the greenback
at 154.95 per dollar and touched its lowest since 1990 ahead of
the Bank of Japan's two-day policy meeting that concludes on
Friday.
A senior official of Japan's ruling party told Reuters they
were not yet in active discussion on what yen levels would be
deemed worthy of market intervention.
The benchmark 10-year Treasury note rose five
basis points to 4.6459%.
In commodities, Brent crude futures fell 40 cents,
or 0.45%, to settle at $88.02 a barrel, while U.S. West Texas
Intermediate crude futures slipped 55 cents, or 0.66%, to
$82.81.