Stocks and Bonds Move Sideways in Holiday-Shortened Week

MARKET GLOBAL - NEW YORK/LONDON. Wall Street tracked lackluster advances in most global share indexes on Tuesday as the yen was steady not far above 2022 intervention levels on more jawboning by a Japanese official to deter shorting after last week's Japanese tightening.

Treasury yields edged higher in early U.S. trading but movements across markets were muted ahead of Good Friday, when U.S. markets and many other financial centers will be closed.

The Dow Jones Industrial Average rose 95.64 points, or 0.24%, to 39,409.28, the S&P 500 gained 14.32 points, or 0.27%, to 5,232.51, and the Nasdaq Composite gained 55.31 points, or 0.34%, to 16,439.78.

MSCI's gauge of stocks across the globe rose 1.87 points, or 0.24%, to 781.32.

"It's an interesting dynamic, and this holds every time we have a Fed meeting - the next week tends to have a quieter tone to it. Especially a holiday-shortened week like we have here, and the amount of data influence is going to be lighter," said Art Hogan, chief market strategist at B Riley Wealth in New York. "That's attracting the sideways movement we've seen."

The STOXX 600 index rose 0.13. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.27% higher 0.27%.

In the spotlight was the yen, which has been trading close to its weakest against the dollar since 1990, even after the Bank of Japan raised interest rates last week for the first time in 17 years.

Against the Japanese yen, the dollar strengthened 0.01% at 151.42, facing the risk of Japan intervening to prevent further falls in the currency. The dollar rose to 151.94 yen in October 2022 before intervention pushed it lower.

Japanese Finance Minister Shunichi Suzuki said on Tuesday he would not rule out any measures to cope with the yen's weakening, echoing a warning from Tokyo's top currency diplomat the previous day.

The dollar weakened 0.01% to 7.251 versus the offshore Chinese yuan, which was supported after a stronger-than-expected fixing of its trading band.

Markets were unsettled by a sharp drop in the yuan on Friday, after months of tight trading, and some speculate China is loosening its grip on the currency to allow it to fall.

"We've got changing sands in the FX market. You’ve got threat of intervention from Japan ... and from China. It’s good to see that they do actually care about the economy and they are willing to step in. It’s not quite the stimulus we want, but they are saying 'enough is enough now, we do need to worry about our deflation'," XTB research director Kathleen Brooks said.

The 14% decline in the yen's value over the last 12 months fed a surge in Tokyo's Nikkei index to record highs in recent days, even though it slipped 0.04% on Tuesday.

MIXED OUTLOOKS

Last week the Federal Open Market Committee left U.S. interest rates where they were and the FOMC's median dot plot projections showed no change to the previous projection of three rate cuts this year.

Confusing the picture somewhat on Monday, while Chicago Fed President Austan Goolsbee said he had pencilled in three rate cuts this year, Fed Governor Lisa Cook urged caution and Atlanta Fed President Raphael Bostic reiterated Friday remarks trimming his expectations to one cut.

U.S. interest rate futures price about three Fed rate cuts this year and about a three-in-four chance of the first cut in June.

U.S. yields edged up after a report showing orders for long-lasting U.S. manufactured goods increased more than expected in February, while business spending on equipment showed tentative signs of recovery, boosting the economy's prospects in the first quarter.

The yield on benchmark U.S. 10-year notes rose 1 basis point to 4.263%. The 2-year note yield, which typically moves in step with interest rate expectations, rose 2.7 basis points to 4.6137%.

U.S. crude lost 0.11% to $81.86 a barrel and Brent fell to $86.39 per barrel, down 0.41% on the day.

Spot gold added 0.33% to $2,178.57 an ounce. U.S. gold futures gained 0.36% to $2,182.70 an ounce.

Bitcoin fell 1.39% to $69,969.00. Ethereum declined 1.55% to $3572.4.