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Asian stocks mixed ahead of central bank meeting

Sydney - Asian stocks were mixed, with gauges in Japan rising, and Australian bonds fell as investors await comments from central bankers meeting at Jackson Hole and as political wrangling continues in Washington.

Korea’s equity benchmark was little changed as Samsung heir Jay Y. Lee was sentenced in Seoul to five years in prison on graft charges. Automakers lifted Japanese shares as the yen was headed for its worst weekly loss in almost two months.

The dollar held onto gains against most peers. Crude traded below $48 a barrel as a storm strengthened into a hurricane aimed at Texas. European equity-index futures were little changed.

In a week when traders had little to go on and the northern summer kept volumes suppressed, equity markets held in tight ranges as investors focused on the forum in Jackson Hole, Wyoming.

Though European Central Bank President Mario Draghi isn’t expected to offer a fresh policy message, his speech and that of Federal Reserve chair Janet Yellen on Friday will be parsed for clues on the timing of reductions in stimulus.

Two Fed officials offered opposing views on Thursday on the inflation debate.

Kansas City’s Esther George said another rate hike is feasible this year if US data holds up. Dallas’s Robert Kaplan called for patience in waiting for prices to go higher.

Meanwhile, President Donald Trump took to Twitter to fuel the debate on legislation to keep the US government open next month. Trump blasted Republican leaders for ignoring his advice on raising the debt ceiling and creating a "mess". 

Countering, House Speaker Paul Ryan said the borrowing limit will be raised.

Rates on short-term Treasury bills spiked amid concern Congress and the White House may not act in time.

Among other key events looming this week:

Among economic releases on Friday in Asia, Singapore reports industrial output and Thailand details foreign-exchange reserves. Japan’s key measure of price changes rose every so slightly in July, highlighting the central bank’s struggle to spur inflation.

Core consumer prices, excluding fresh food, quickened to 0.5% from 0.4%.
 
Indian markets are closed for a holiday. Yellen is scheduled to discuss financial stability at 10am.

New York time on Friday at the Kansas City Fed’s symposium in Jackson Hole. Draghi is set to speak at 3pm.

Here are the main moves in markets:

Stocks

Japan’s Topix index closed 0.3% higher with volume on the gauge about 20% below its 30-day intraday average. The S&P/ASX 200 Index in Sydney fluctuated before finishing little changed and South Korea’s Kospi index rose 0.1%.

The Hang Seng Index in Hong Kong added 1% and the Shanghai Composite Index advanced 1.7%.  Contracts on the S&P 500 Index were up less than 0.1% as of 7:33am in London.

The underlying gauge fell 0.2% on Thursday and is down more than 1% for the month. Amazon.com’s plan to cut prices at Whole Foods locations next week weighed on US food retailers.

The MSCI Asia Pacific Index rose 0.2%.

Currencies

The Bloomberg Dollar Spot Index was flat after gaining 0.2%, targeting its first monthly rise in six months. The Japanese yen was little changed at 109.61 per dollar after falling 0.5%. The euro was slightly lower at $1.1794.

Bonds

The Bank of Japan offered to buy ¥410bn of 5-to-10 year bonds at its regular market operations on Friday, down from the ¥440bn at its last operation. The yield on 10-year Treasuries was unchanged at 2.19%.

The rate on Treasury bills maturing October12 jumped by as much as five basis points Thursday, the largest intraday move since March. Australian 10-year bond yields increased one basis point to 2.64%.

Commodities

West Texas Intermediate crude added 0.8% to $47.81 a barrel after declining about 2%, on track for its fourth weekly decline. Hurricane Harvey is forecast to turn into a Category 3 storm when it makes landfall late on Friday in an area of Texas thick with oil refineries and natural gas plants.

Gold was flat at $1 287.01 an ounce, set to rise for the second month in a row. It dropped 0.4% in the previous session.

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