Asian Stock Market: Nikkei stages volatile day on BoJ inclination for YCC tweak, S&P500 Futures edge higher

• Market sentiment remains slightly positive despite volatile moves in Asia.
• BoJ’s inaction teases Yen buyers as policymakers show readiness for YCC move.
• US-China tension, US Q2 GDP fail prod optimists amid talks of nearness to policy pivot at major central banks.
• Nikkei drops 0.50%, bonds edge higher ahead of Fed’s preferred inflation gauge.

The risk profile remains slightly positive on early Friday despite looming fears of a hawkish move at the Bank of Japan (BoJ). Also likely to check the market optimists are the latest US statistics and fears about the Sino-American ties. However, growing concerns that the major central banks are approaching the peak rates seem to keep the equity buyers hopeful.

While portraying the mood, the MSCI’s index of Asia-Pacific shares outside Japan prints mild gains as it prods the previous day’s pullback from the five-month high. That said, Japan’s Nikkei 225 drops 0.50% at the latest, after staging an initial slump of nearly 1.0% on the BoJ signals.

BoJ keeps benchmark interest rates and the yield curve control (YCC) policy unchanged but showed readiness to tweak the measures in the future if needed, which in turn propelled the Yen and drowned the stocks and bonds in Tokyo.

Also read: Bank of Japan maintains interest rate, pledges to make YCC more flexible

Elsewhere, China equities edge higher despite the latest fears for the US-China ties as the Washington Post (WaPo) quotes anonymous US officials familiar with the matter to signal the White House's restrictions for the Hong Kong Leader from attending November’s Asia-Pacific Economic Cooperation (APEC) leaders’ summit in San Francisco.

Further, stocks in Australia print mild losses amid mixed inflation clues and Retail Sales whereas equities from Auckland also drop on downbeat New Zealand consumer sentiment data for July. Additionally, Indian equities drop half a percent at the latest as bulls take a breather at the record tops.

On a broader front, Wall Street benchmarks closed with nearly half a percent of daily losses whereas the benchmark US 10-year Treasury bond yields marked the biggest daily jump in a month to refresh a three-week high near 4.02%. However, the S&P500 Futures print mild gains and the US 10-year Treasury bond yields retreat to 3.99% by the press time.

It’s worth noting that the market sentiment remains firmer amid hopes of witnessing no more major rate hikes from the top-tier central banks whereas the yields retreat from a multi-day high.

Also read: Forex Today: Yen jumps amid speculations of a tweak at the BoJ; Dollar rallies on US data