Asian markets saw positive movements on Monday, with Japan’s Nikkei 225 leading gains in the region. This was fueled by the release of a key U.S. inflation report on late Friday, which raised hopes for a potential interest rate cut. The U.S. June personal consumption expenditures price index showed a 0.1% month-on-month increase, aligning with estimates from economists. This prompted a 2.5% increase compared to the same period a year ago. Subsequently, the Nikkei rose by 2.26%, with the broad-based Topix registering a 2.02% increase.
The positive performance of the Nikkei could potentially break an eight-day losing streak for the index. The strengthening of the Japanese yen by 0.18% against the greenback to trade at 153.44 also impacted market movements. Automaker Mitsubishi Motors notably stood out as one of the top gainers in the Nikkei index, surging over 6% after reports that it would join the Honda-Nissan alliance to standardize in-vehicle software.
While some stocks experienced gains, others faced significant challenges. Shares of drugmaker Eisai plummeted by 13% following the European Union’s regulator’s decision to not approve its Leqembi treatment for Alzheimer’s disease. This setback made Eisai the biggest laggard among the 10 Nikkei 225 stocks that fell despite a broader market rally.
Looking ahead, the Bank of Japan’s monetary policy meeting scheduled to commence on July 30 will be a focal point in the region. Economists anticipate a potential rate hike by the central bank, with expectations ranging from a 10 to 15 basis points increase. Other market-moving events include China’s July PMI data release and Australia’s upcoming inflation data ahead of the central bank’s monetary policy meeting on August 6.
South Korea’s Kospi recorded a 1.3% increase, while the small-cap Kosdaq rose by 0.59%. Hong Kong’s Hang Seng index climbed 1.1%, contrasting with mainland China’s CSI 300 which slipped by 0.3% due to a drag from utilities stocks. Australia’s S&P/ASX 200 also saw a positive movement of 0.84%. Taiwan’s Weighted Index rebounded by 1.04% after experiencing a significant drop of over 3% on the previous Friday, caused by a typhoon-induced market closure.
In the global context, the U.S. market experienced positive movements on Friday, with the Dow Jones Industrial Average rallying by 1.64%, the S&P 500 climbing by 1.11%, and the Nasdaq Composite gaining 1.03%. These performances in the U.S. market could potentially impact sentiment and trading activities in the Asian markets in the days to come.
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