Asia markets are set for a cautious open on the first day of the trading week after the S&P 500 and Nasdaq closed at record highs on Friday following comments by the U.S. Federal Reserve Chairman Jerome Powell, and after an announcement by China's central bank regarding the yuan's daily midpoint the same day.
Nikkei futures in Chicago traded at 22,650 and Osaka at 22,600, as compared to the index's last close at 22,601.77.
In Australia, SPI futures traded at 6,220 as compared to the ASX 200's last close at 6,247.3 following the appointment of the country's new prime minister, Scott Morrison.
Wall Street ended the last trading week in positive territory. The S&P 500 rose 0.6 percent to close at 2,874.69 while the Nasdaq Composite climbed 0.9 percent to close at 7,975.98, a record high close for both indexes. The Dow Jones Industrial Average was up by 133.37 points to close at 25,790.35.
Last Friday, Powell delivered a speech at the Jackson Hole Symposium in Wyoming, where leading central bankers met to discuss the future of monetary policy. He said "further, gradual" rate hikes were likely in the future, noting the economy is "strong" and able to withstand tighter monetary policy.
Powell's comments came hours after the People's Bank of China announced that it was tweaking its methodology for the fixing of the yuan's daily midpoint in an effort to stabilize the currency market.
In a morning note, Ray Attrill, head of foreign exchange strategy at National Australia Bank, said the "combined impact" of the dollar's weakness following Powell's speech and yuan strength after the China's central bank's announcement will likely be "dominant" as early week influences.
The U.S. dollar index, which tracks the greenback against a basket of currencies, traded at 95.131 at 6:45 a.m. HK/SIN. The Japanese yen traded largely flat against the dollar at 111.23 while the Australian dollar traded at $0.7331.
Here's a look at the day ahead:
- China – July industrial profits at 9:30 a.m. HK/SIN
- Hong Kong – July trade at 4:30 p.m. HK/SIN
CNBC's Fred Imbert and Reuters contributed to this report.
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