On Thursday, most Asian stocks remained within a narrow range as investors awaited further cues on U.S. inflation and interest rates. Japanese markets continued to slide for the fourth consecutive session, reflecting ongoing concerns regarding the Bank of Japan’s policies.
Asian markets took a neutral stance from Wall Street, where investors processed robust consumer inflation data while also securing profits in prominent technology stocks.
U.S. futures showed little movement during Asian trading hours, with attention now shifting towards upcoming data releases on producer price index and retail sales.
Nikkei 225 and TOPIX under Pressure Ahead of Bank of Japan Meeting
Both the Nikkei 225 and TOPIX indexes in Japan traded within a modestly lower range on Thursday, with the Nikkei extending its losses for the fourth straight session. Profit-taking persisted in both indexes after reaching record highs last week.
The decline in Japanese stocks was primarily fueled by increasing speculation that the Bank of Japan might soon end its negative interest rate and yield curve control policies, possibly as early as its upcoming meeting next week.
Rising inflation and wages suggested that Japanese inflation could stay notably above the BOJ’s 2% annual target in the foreseeable future, potentially prompting the central bank to consider an interest rate hike.
Broader Asian Markets Remain Subdued; India Grapples with Losses
Across broader Asian markets, trading activity remained subdued, as a cooling tech rally and upcoming data releases from China influenced market sentiment.
In China, the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes hovered near four-month highs, showing signs of fatigue in the recent rebound rally. Investor confidence in a Chinese economic recovery for 2024 remained limited, especially following Beijing’s conservative growth target announcement for the year.
Meanwhile, Hong Kong’s Hang Seng index saw marginal movement. Futures for India’s Nifty 50 index hinted at a positive start after suffering steep losses in the previous session, driven by significant profit-taking across all sectors. Record highs earlier this month were met with apprehension over sustained higher interest rates, prompting investors to withdraw from the market.
Australia’s ASX 200 Slips, South Korea’s KOSPI Gains
Australia’s ASX 200 experienced a slight decline of 0.1%, primarily driven by losses in heavyweight financial stocks. However, BHP Group Ltd shares surged over 3% in response to a rally in copper prices, fueled by concerns of production cuts in China.
In contrast, South Korea’s KOSPI emerged as an outlier, rising by 0.7% amidst the overall muted trading sentiment in the region.