On Wednesday, Asian stocks mostly traded within a narrow range as investors processed varying inflation data from China and Japan, while keeping a close eye on the potential timing of interest rate cuts by the Federal Reserve.
The Asian markets took cues from Wall Street, where technology stocks led to new highs for the and the . However, the pace of gains on Wall Street was slowing down.
In Asian trade, U.S. stock index futures remained flat as investors analyzed Federal Reserve Chair Jerome Powell’s testimony. Powell acknowledged some economic cooling but did not provide clear signals on when rate cuts could begin. Nonetheless, traders appeared to be expecting a rate cut in September.
Powell is scheduled to speak later on Wednesday, and market attention is also on key U.S. economic data releases this week.
Asian markets were grappling with mixed inflation figures from China and Japan.
Japanese stocks stagnate at record highs amid mixed PPI inflation data
Japan’s reached a new peak of 41,777.50 points on Wednesday, while the broader also rose by 0.2% and briefly hit a record high.
Recent gains in the Japanese markets were largely driven by foreign investment, supported by a weaker yen and expectations of a dovish stance from the Bank of Japan.
However, data released on Wednesday showed a slight uptick in Japanese inflation in June, with year-on-year rates reaching 2.9%. However, month-on-month PPI inflation grew less than anticipated at 0.2%.
The data suggested that while Japanese inflation was on the rise, it remained subdued, casting doubts on whether it would compel the BOJ to tighten its policy further.
Chinese stocks show mixed performance as CPI disappoints but PPI improves
China’s climbed by 0.2%, while the declined by 0.1%. Hong Kong’s surged by 0.8% as it rebounded from a two-month low.
In June, Chinese consumer inflation decreased compared to the previous month, reflecting weakened consumer spending amid concerns about economic recovery.
However, the recorded its slowest decline in 16 months, indicating that Chinese factories were benefiting from ongoing government stimulus measures.
Nevertheless, the latest data revealed that China’s deflationary trend persisted, instilling little confidence in the market. Chinese stocks had been experiencing significant losses recently due to fears of a trade war with the West.
Investors are now focusing on Chinese , set to be released on Friday.
Across Asia, markets traded mostly flat or lower as optimism surrounding U.S. rate cuts waned.
Australia’s dropped by 0.3%, while South Korea’s fell by 0.2%.
Meanwhile, futures for India’s indicated a slightly positive start, with the index and the continuing to achieve record highs, supported by strong confidence in India’s rapidly growing economy.