Asian stocks stumble as emerging currencies slide; Nikkei down 0.48%

Asian stocks traded mostly lower Tuesday as currencies in the region’s emerging markets continued to touch new lows against the U.S. dollar. 

In Asian trading Tuesday, Japan’s Nikkei 225 fell 0.48%. Traders continue to figure out what the next moves will be from the Federal Reserve and the Bank of Japan. Some clues will be provided on that front when the Fed releases minutes from its most recent policy meeting Wednesday. 

Hong Kong’s Hang Seng lost 0.25% after the Census and Statistics Department said that Hong Kong’s unemployment rate remained unchanged at 3.3% last month. Analysts expected that reading. 

The Shanghai Composite inched up 0.11%. Everbright, a state-controlled brokerage firm, was banned from prop trading for three months on news of improper trades. The company also said that it mispriced 10 million yuan of government bonds in a Monday trade, Bloomberg reported. 

Australia’s S&P/ASX 200 Index declined after the release of meeting minutes from the Reserve Bank of Australia. 

"The Bank should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further," said RBA in the minutes. 

"The course of the exchange rate would be important. It had declined since the previous meeting, though remained high by historical standards. It was possible the exchange rate would decline further over time, which would assist in rebalancing growth in the economy," the bank said regarding its desires to see the Aussie fall further. 

New Zealand’s NZSE 50 rose 0.14% even after the Reserve Bank of New Zealand announced new lending curbs on low deposit home loans. The central bank has previously said it could take steps to cool a property market that it has viewed as close to overheating. 

South Korea’s Kospi rose 0.13% while Singapore’s Straits Times Index lost 0.43%. S&P 500 futures added 0.06% a day after the benchmark U.S. index lost 0.59%.

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U.S. stocks drop as market braces for Fed changes; Dow down 0.47%

U.S. stocks posted their first, 4-day losing streak in 2013 on Monday after investors avoided equities on sentiments the Federal Reserve is growing closer to announcing plans to taper its stimulus programs.

Stimulus measures such as the Fed's monthly USD85 billion in asset purchase tend to inflate stock prices by keeping interest rates low, and talk of their dismantling can send stocks falling.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.47%, the S&P 500 index fell 0.59%, while the Nasdaq Composite index fell 0.38%.

Treasury yields soared to two-year highs earlier as markets braced for the Fed to announce plans to taper its monthly asset purchases.

On Wednesday, the Fed will release the minutes of its July policy meeting, and investors avoided stocks before then, largely expecting that an announcement could come at next month's meeting  and herald the end of ultra-loose monetary policy.

Weak earnings out of the retail sector pushed down stock prices as well.

Saks posted a wider-than-expected quarterly loss due weak accessories sales that had forced markdowns, while other retailers such as Macy's, Nordstrom, Kohl's and Wal-Mart disappointed as well.

Consumer demand drives about 70% of U.S. economic output.

Elsewhere, JPMorgan Chase tumbled fell on reports that U.S. authorities have opened a bribery probe to find out whether the bank hired the children of Chinese officials to win lucrative business. 

Leading Dow Jones Industrial Average performers included Intel, up 1.69%, Boeing, up 1.24%, and Johnson & Johnson, up 1.17%.

The Dow Jones Industrial Average's worst performers included JPMorgan Chase, down 2.72%, Alcoa, down 2.09%, and Hewlett-Packard, down 2.04%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 1.09%, France's CAC 40 fell 0.97%, while Germany's DAX 30 finished down 0.31%. Meanwhile, in the U.K. the FTSE 100 finished down 0.53%.

On Tuesday, the U.S. will see the release of the Chicago Fed National Activity Index,

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Forex - Dollar edges flat to lower as market awaits fresh Fed cue

The dollar traded flat to lower against most major currencies on Monday as investors avoided the greenback ahead of the release of the Federal Reserve's minutes from its July policy meeting on Wednesday, which markets hope will provide clues on the fate of stimulus programs.

Stimulus tools such as the Fed's USD85 billion monthly bond-buying program weaken the dollar to spur recovery, and talk of their dismantling can bolster the currency. 

In U.S. trading on Monday, EUR/USD was up 0.08% at 1.3338 in a quiet, late-summer session void of major data.

A lack of U.S. data kept investors on the sidelines to await the release of the Fed minutes.

Mixed economic indicators out of the U.S. in recent weeks have created uncertainty over when tapering will begin, with many investors betting on September and others pegging an announcement in December.

Elsewhere, Germany’s Bundesbank on Monday said the European Central Bank’s commitment to keeping rates low to spur recovery doesn't mean the monetary authority won't take action to curb rising inflation rates down the road.

In its monthly report, Germany’s Bundesbank said the euro zone economy would benefit from record low interest rates set by the ECB, though the report added that the ECB’s pledge to keep borrowing costs low for an extended period would depend on the medium-term inflation outlook.

The greenback, meanwhile, was down against the pound, with GBP/USDup 0.20% at 1.5654.

The dollar was flat against the yen, with USD/JPY down 0.02% at 97.59, and down against the Swiss franc, with USD/CHF trading down 0.28% at 0.9239.

The yen slumped after official data revealed that Japan posted a larger-than-expected trade deficit of JPY1.024 trillion in July. Exports rose 12.2% on a year-over-year basis, boosted by a weaker yen, while imports climbed 19.6%.

Analysts were expecting a JPY786 billion trade gap, though the Japanese currency trimmed its earlier losses in directionless trading.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.02% at 1.0341, AUD/USD down 0.63% at 0.9124 and NZD/USD trading down 0.35% at 0.8077.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.11% at 81.26.

On Tuesday, the U.S. will see the release of the Chicago Fed National Activity Index.

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Forex - USD/JPY gains on lackluster Japanese trade data

The dollar rose against the yen on Monday after Japan reported a wider-than-expected trade deficit, though the greenback's gains were limited due to uncertainty over the fate of Federal Reserve stimulus programs, which have kept the U.S. currency weaker in recent years to spur recovery.

In U.S. trading on Monday, USD/JPY was trading at 97.68, up 0.07%, up from a session low of 97.36 and off a high of 98.13.

The pair was likely to find resistance at 98.64, Thursday's high, and support at 95.93, the earlier low.

The yen slumped after official data revealed that Japan posted a larger-than-expected trade deficit of JPY1.024 trillion in July. Exports rose 12.2% on a year-over-year basis, boosted by a weaker yen, while imports climbed 19.6%.

Analysts were expecting a JPY786 billion trade gap.

In the U.S., a lack of data kept investors on the sidelines to await the release of the minutes from the Federal Reserve's July monetary policy meeting on Wednesday, which could provide clues as to when the bank may start to taper its USD85 billion monthly asset-purchasing program.

Mixed economic indicators out of the U.S. have created uncertainty over when tapering will begin, with many investors betting on September and others pegging an announcement in December.

Uncertainty capped the dollar's gains though rising bond yields earlier in the session allowed the U.S. currency to strengthen by stoking expectations that September could see a Fed announcement on plans to scale back stimulus tools.

The yen, meanwhile, was down against the pound and down against the euro, with GBP/JPY up 0.25% and trading at 152.88 and EUR/JPYtrading up 0.17% at 130.31.

The euro moved higher after Germany’s Bundesbank said the European Central Bank’s commitment to keeping rates low to spur recovery doesn't mean the monetary authority won't take action to curb rising inflation rates.

In its monthly report, Germany’s Bundesbank said the euro zone economy will benefit from record low interest rates set by the ECB, though the report added that the ECB’s pledge to keep borrowing costs low for an extended period would depend on the medium-term inflation outlook.

On Tuesday, the U.S. will see the release of the Chicago Fed National Activity Index, while Japan will release its All Industries Activity Index.

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