Ueda from the BOJ boosts the yen. Next Powell By Reuters

A look at the day ahead in European and global markets from Stella Qiu

The biggest move in Asia was a 0.5 percent rise in the yen as Bank of Japan Governor Kazuo Ueda disappointed some by saying the central bank still plans to raise interest rates if the economy and inflation play out as forecast.

Fair enough. The market crash that prompted policymakers to become complacent three weeks ago is in the rearview mirror. In a subdued reaction to Ueda’s comments, the spread swung between gainers and losers, but the latter was up 0.4% and domestic yields rose 2 basis points.

Supporting the governor’s view are inflation data released earlier in the day that showed Japan’s core inflation accelerated for a third straight month to 2.7 percent in July.

The core index, which excludes food and energy costs, fell to 1.9%, but this is still around the BOJ’s target of 2%.

Traders still assign a very low chance of a rise in October, but a December move is now priced at 70%.

Elsewhere, sentiment turned cautious ahead of Federal Reserve Chairman Jerome Powell’s speech in Jackson Hole. Every major stock fell, led by a drop in tech stocks, although Wall Street futures rose slightly.

Europe is set for a mixed open, with EUROSTOXX 50 futures down 0.2% and up 0.2% amid little headline data for the region.

Powell’s address could move markets significantly or prove to be overblown. After all, his colleagues already hinted at a rate cut in September on Thursday, voicing support for a “slow and methodical” approach.

Taken together with surveys showing the US economy continues to grow at a healthy pace, markets slightly cut the chance of a half-point cut in September to 24%, from 38% a day earlier.

A quarter point cut is the full price.

Regardless of the size of the cut, Democrats will be happy to see the Fed finally begin its easing cycle before the November presidential election.

Vice President Kamala Harris just officially accepted her party’s nomination on the final day of the Democratic National Convention.

Key developments that could influence markets on Friday:

— Unemployment rate in Sweden for July

— Canadian retail sales for June

— US New Home Sales

— Fed Chairman Jerome Powell’s Jackson Hole speech

(By Stella Qiu; Editing by Jacqueline Wong)