Asian Market Update – Wednesday: Bitcoin Remains Stable after Big Jump the Previous Day over North Korea Missile Test
The Big Question: Are we approaching the end of the bull run?
Bitcoin prices remained stable overnight during the Asian trading session, after the cryptocurrency saw one of the biggest jumps in weeks, as investors appears to have been spooked by the latest North Korea missile test and turn to bitcoin.
The digital currency was changing hands at around $4,600, up about 0.5 percent overnight, with the lowest prices at $4,580 and the highest at $4,613.
The stable performance on Wednesday followed a huge surge in the previous day, when the price of bitcoin jumped from about $4,347 to as high as about $4,610, a new all-time-high.
Ethereum also maintained stability overnight, trading between $370 and $374. Ethereum also saw a huge jump in the previous day, when the price climbed from around $340 to a peach at $375. That’s the highest level in over two months since the digital currency’s price jumped to an all-time high of $410 in mid-June.
The bull run for digital currencies on Tuesday followed losses in global equity markets, especially in Asia, after the rogue government in North Korea fired away another mid-range ballistic missile, which flew over Japan’s territory.
The gains also brushed off recent regulatory tightening signals in Russia. In Russia, the local regulator said bitcoin should be limited to qualified investors and not the mass population.
The rally came even as the head of the Bitcoin Foundation cautioned investors not to invest more than they can afford and warned against risks from unsophisticated investors. But investors appeared to be more comfortable with the digital currency as equities rattled.
Financial research firm Autonomous Next has reportedly identified more than 50 crypto-related funds, indicating rising interest in the digital currency from institutional investors.
As the bull run seems to gain fresh momentum, the question is whether we are getting close to a temporary top in the bitcoin market? Goldman Sachs predicts $4800 could be the top of this run.
Main Indexes – Mid-day Asian Trading Session
|Indexes||Value at Midday||Daily Change|
|Japan-Nikkei Stock Average 225||19,473.43||0.57%|
|China-Shanghai Composite Index||3,364.32||-0.03%|
|Hong Kong-Hang Seng||27,979.55||0.77%|
|South Korea- KOSPI||2,366.27||0.06%|
Most major Asian equities bounced back on Wednesday, shaking off losses from sell-offs in the previous day, when they stumbled over North Korea’s latest missile test.
On Wednesday, The South Korean stock market, which took a hit on Tuesday, edged up before midday. The benchmark KOSPI was up 0.06 percent to 2366.27 before midday.
In Japan, the Nikkei 225 added 0.57 percent to 19,473.43.
Hong Kong’ Hang Seng index gained 0.77 percent to 27,979.55.
However, down under, the ASX 200 dropped 0.19 percent to 5658.00.
In China, the Shanghai Composite Index dropped a slight 0.03 percent to 3,364.32.
The rebound in the Asian market followed calmer response from the UN over North Korea’s latest missile test, which the Japanese government called an “unprecedented and grave threat.”
US President Donald Trump who has previously threatened “fire and fury” remained silent on Tuesday, as he is presumably busy dealing with the consequences of the historic hurricane Harvey in Texas.
The United Nations “only” condemned the test but did not mention of any new sanctions or other tougher responses.
Asian stock markets also appear to have been boosted by a consumer confidence report from the US, which said consumer confidence is at the second-highest level since the year 2000.
Market-sensitive news to watch this week: 1. Impact of Hurricane Harvey off the US Gulf Coast, though so far the impact on markets appear to be limited; 2. Economic data from Japan, the US, Hong Kong and Australia later in the week; 3. NAFTA talks; 4. UK’s Brexit talks with the EU; 5. talks of tax reform in the US.
The Japanese yen gained 0.04 percent against the US dollar at Midday. The USD/JPY rate was at 109.68.
The Chinese yuan strengthened 0.19 percent against the greenback, trading at 6.5816 per dollar. The yuan continues to break new highs as the dollar is plummeting, possibly providing trend traders with some golden opportunities for buying dips in CNYUSD.
The Australian dollar gained 0.54 percent against the US dollar. The Australian dollar was trading at 1.2509 per dollar before midday.
WTI Oil was down 0.04 percent, trading at $46.27 per barrel.
Brent Crude gained 0.31 percent to $51.78 per barrel.
Gold gained 0.24 percent to $1,311.76 per ounce.
Business News across Asia
In China, State-owned China Aerospace Science and Industry Corp announced that it has started a research and development project for building a “high-speed flying train.” The train could travel as fast as 1,000 km/h and the company would go even further to explore higher speeds of 2,000 km/h and 4,000 km/h trains.
In Japan, news still focused on the North Korean missile test. The Japanese government said the missile, which flew over one of its northern islands, is a direct challenge to Japan’s sovereignty. Though the US and UN responded relatively calm, Japanese government officials are mulling other responses.
Take Away: Japan is in talks with South Korea, as both view North Korea as a direct threat to their national security. They might pressure the US to formulate a tougher response, but as evidenced on Tuesday, tougher sanctions haven’t deterred North Korea so far.
In India, the financial capital of Mumbai has been hit by the worst monsoon rain in years. Pictures online show the city being flooded and people are lining up to be evacuated from their homes. Public transport and other services have been shut down, according to media reports.
Take Away: The rain could impact India’s financial sector. However, the Mumbai exchange remained open on Wednesday, with the Sensex up 0.74 percent in early morning trading.