With the assistance of exporter stocks and a declining yen, Japan’s broad Topix index surged over an intraday high set in September to reach a 34-year top. After reaching its highest level since 1990 Tuesday, the benchmark Nikkei 225 index surged by about 2%, continuing its upward trend. A measure of Asian stocks remained stable, despite a slight decline in Chinese benchmarks.
US equities futures saw minimal movement. The tech-rich Nasdaq 100 managed a rise of the same magnitude, extending a rebound in tech stocks after strong selling last week, while the S&P 500 closed Tuesday 0.2% lower.
Japanese stocks held steady after the market’s anticipation of an early Fed rate cut faded at the beginning of the year. According to Rie Nishihara, chief Japan equity strategist at JPMorgan, this was due to expectations that the yen’s depreciation against the dollar would support corporate earnings.
Following a period of volatility caused by rumors that the US Securities and Exchange Commission had approved spot-bitcoin exchange-traded funds, Bitcoin increased by about 2% to trade at about $46,205. In a statement, the SEC stated that it had not yet approved the ETFs and refuted a contradictory post made minutes earlier on the regulator’s official X account.
The dollar and Treasury 10-year rates remained stable throughout trade in Asia. The yen’s vulnerability to the US dollar continued.
One of the most notable pieces of Asian data was the steep slowdown in wage growth for Japanese workers. This is not good news for the Bank of Japan, which wants wage rises to translate into price increases before normalizing monetary policy. The rationale for maintaining current interest rates was strengthened by Australia’s modest inflation. The Australian dollar appreciated versus the US dollar.
Later this week, investors will be watching crucial US inflation data for clues about when the Federal Reserve will decrease interest rates.
According to Max Kettner of HSBC Holdings Plc, there is a growing mismatch between aggressive pricing for US interest rate decreases and strong economic fundamentals that lessen the need for such easing risks, producing a “reverse Goldilocks” scenario for global markets. In contrast to what market pricing indicates, which is May or possibly March, he believes the Fed will begin its easing cycle in June.
The next several days also see the release of China’s inflation, trade, and credit reports, which will provide an update on the state of the second-largest economy in the world.
The focus remained on geopolitics. According to the US envoy to China, there is no place for compromise with those who support Taiwan’s independence.
A modest worldwide deficit this year is predicted by an official prediction, and evidence that US stockpiles are continuing to decline helped oil prices inch higher on Tuesday, compounding gains of more than 2%.
- Published By Team Nation Press News