Yen Drops on Rate Cut Talk; Oil Climbs
The U.S. dollar rose to a three week high against the yen on Friday, on a report of likely further monetary policy easing from the Bank of Japan, while a rise in crude oil prices was offset by poor technology sector earnings, leaving Wall Street stocks steady.
The dollar rose more than 2.0 percent against the yen to 111.80 yen, its highest level since April 1 after a media report said the BOJ is considering expanding its negative rate policy to bank loans and could cut rates further.
A rise in oil prices helped energy stocks, but disappointing earnings from top technology companies, including Google's parent, Alphabet, weighed on the tech sector on Wall Street, leaving the U.S.'s benchmark S&P 500 stock index little changed for the day.
Oil prices rose and notched their third straight week of gains amid upbeat sentiment over the supply glut. Strong U.S. gasoline consumption and increasing signs of declining production around the world have underpinned the sector recently, traders said.
Brent crude ended up 1.3 percent at $45.11 a barrel, while U.S. crude settled up 1.3 percent at $43.73.
On Wall Street, the S&P technology sector index dropped 1.9 percent, its worst decline since early February.
Alphabet dropped 5.4 percent to $737.77, a day after it missed Wall Street targets for first-quarter profit and revenue.
The Dow Jones industrial average rose 21.23 points, or 0.12 percent, to 18,003.75, the S&P 500 gained 0.1 points to 2,091.58 and the Nasdaq Composite dropped 39.66 points, or 0.8 percent, to 4,906.23.
The MSCI world stock index was down 0.3 percent, while the pan-European FTSEurofirst 300 index ended off 0.4 percent, weighed down by carmakers.
Daimler said it was investigating its U.S.
The Federal Reserve meets next week and healthy markets and reassuring data over the past month have left many investors wondering whether they might have been too quick in pricing out an increase in U.S. rates this year.
U.S. Treasury yields rose to three-week highs as investors prepared for the possibility that the Fed will hint next week that an interest rate hike is on the table for June.
Yields have fallen since the beginning of the year on concerns about weakening U.S. economic growth and on rising volatility in the oil and stock markets, which has led investors to lower estimates that further rate hikes are near.
"It's looking more and more to me that we might see an increase in June," said Jim Kochan, chief fixed-income strategist at Wells Fargo Fund Management in Menomonee Falls, Wisconsin.
Benchmark 10-year notes fell 5/32 in price to yield 1.89 percent, up from 1.87 percent on Thursday.
(Additional reporting by Sam Forgione, Karen Brettell and Devika Krishna Kumar in New York, Marc Jones in London; Editing by Nick Zieminski and Dan Grebler)