Volkswacht Bodensee - Yen gains after 38-year low, stocks mostly lower

The Japanese currency edged up against the dollar after hitting a 38-year low Wednesday, putting investors on alert for a possible intervention by Japanese authorities.

The Japanese unit's latest retreat came as uncertainty surrounded the Federal Reserve's timetable for cutting interest rates, and the Bank of Japan's caution in tightening monetary policy.

Investors were meanwhile awaiting the outcomes of French and British general elections due over the next week.

Wall Street stocks wobbled ahead of the first presidential debate between Joe Biden and Donald Trump and key inflation data.

The debate, to take place on Thursday evening, "has imbued the market with a bit of a wait-and-see attitude", said Briefing.com analyst Patrick O'Hare.

Friday sees the release of the PCE index, the US Federal Reserve's preferred measure of inflation.

"Should this point towards a further slowdown in price growth then the final day of June trading might go the same way as May’s, which saw a strong rally," said Chris Beauchamp, chief market analyst at online trading platform IG.

"A softer PCE reading could renew hopes of a September rate cut, which have taken a knock of late," he added.

Data out Thursday showed a modest increase in continuing unemployment benefits claims in the United States and a drop in business investment spending.

O'Hare said "today's data was generally on the softer side of things, prompting a drop in Treasury yields and some improvement in the equity futures market, which has leaned on the notion that a rate cut before November could still be possible".

In Japan, vice finance minister Masato Kanda said this week that authorities were keeping a close eye on movements in foreign exchange markets and were ready to step in with yen support 24 hours a day.

Their determination was put to the test after the yen fell to 160.87 per dollar late Wednesday -- its weakest since 1986 -- as US Treasury yields spiked.

Analysts say it is possible traders will keep pushing the envelope to see at what point the government will act, with some saying the currency could hit 170.

In Europe, France's political future was up in the air with the far right surging in polls but other forces fighting to the end three days before the first round of a high-stakes parliamentary vote. Paris stocks ended the day down 1.0 percent.

The French election comes ahead of a UK national vote on July 4, with the right-wing Conservatives led by Prime Minister Rishi Sunak expected to lose power to the centre-left Labour party. London's blue-chip FTSE 100 index shed 0.6 percent.

- Key figures around 1530 GMT -

New York - Dow: UP 0.1 percent at 39,183.46 points

New York - S&P 500: DOWN 0.1 percent at 5,471.14

New York - Nasdaq Composite: DOWN 0.1 percent at 17,783.79

London - FTSE 100: DOWN 0.6 percent at 8,179.68 (close)

Paris - CAC 40: DOWN 1.0 percent at 7,530.72 (close)

Frankfurt - DAX: UP 0.3 percent at 18,210.55 (close)

EURO STOXX 50: DOWN 0.3 percent at 4,902.60 (close)

Tokyo - Nikkei 225: DOWN 0.8 percent at 39,341.54 (close)

Hong Kong - Hang Seng Index: DOWN 2.1 percent at 17,716.47 (close)

Shanghai - Composite: DOWN 0.9 percent at 2,945.85 (close)

Dollar/yen: DOWN at 160.69 yen from 160.73 yen on Wednesday

Euro/dollar: UP at $1.0702 from $1.0680

Euro/pound: UP at 84.63 pence from 84.57 pence

Pound/dollar: UP at $1.2647 from $1.2625

Brent North Sea Crude: UP 1.1 percent at $86.20 per barrel

West Texas Intermediate: UP 1.1 percent at $81.78 per barrel

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T.Ziegler--VB