Shares rise ahead of Nvidia results; BOJ keeps rates markets guessing

A passerby walks past an electric monitor displaying various countries' stock price index outside a bank in Tokyo · Reuters

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By Rae Wee

SINGAPORE (Reuters) -Global stocks began the week on firmer footing ahead of a highly anticipated earnings release from Nvidia, while in Japan, comments from its central bank's head left markets none the wiser on the country's rate outlook.

Bank of Japan Governor Kazuo Ueda reiterated on Monday the central bank will keep raising rates if economic and price developments move in line with its forecasts, but made no mention of whether a hike could come in December.

However, he later said in a press conference that keeping inflation-adjusted real interest rates low for too long could cause excessive inflation and force the BOJ into hiking interest rates rapidly.

Ueda's comments had been closely watched by investors for clues on the BOJ's next rate hike, which could have acted as a catalyst to push back against the yen's weakness.

The Japanese currency has fallen some 7% since October against a resurgent dollar and last week weakened past the 156 per dollar level for the first time since July, keeping traders on alert for any intervention from Japanese authorities.

It was last marginally lower at 154.40 per dollar.

On the chance of a BOJ hike next month, IG market analyst Tony Sycamore said it would "depend on where dollar/yen is to a degree".

"If dollar/yen's up at around 160, I think that would increase the (chances) of a rate hike. But I think he's probably not unhappy with dollar/yen sitting around 150, 152. I think that probably keeps him on the sidelines until next year.

"It's coming, it's just a matter of when... the Japanese economy is doing ok."

Despite a weaker yen, Japan's Nikkei fell 1.16%, dragged by a decline in technology shares.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.1%.

Nasdaq futures gained 0.7%, while S&P 500 futures edged up 0.27%, ahead of Nvidia's third-quarter results on Wednesday, where analysts expect the artificial intelligence chip leader to record a jump in revenue.

Shares of Nvidia are up nearly 200% this year, with its hefty weighting in the S&P 500 partially responsible for the index's charge to record highs this year.

But its blistering multi-year run has also raised the bar for earnings outperformance and a slip-up could fuel worries that the market's AI hopes have outstripped reality.

Elsewhere, EUROSTOXX 50 futures added 0.12%, while FTSE futures tacked on 0.14%.

China's CSI300 blue-chip index pared early gains to last trade 0.3% lower. The Shanghai Composite Index eased 0.03%.