Asian Markets Experience Limited Movement Ahead of Key US Data Releases
Stocks in Asia saw minimal fluctuations on Thursday as traders adopted a cautious approach, awaiting the release of crucial US inflation and jobs data. This upcoming data is expected to be a significant catalyst for market activity. The recent surge in markets to record highs has been driven by a buying spree that began after shares hit deep lows following Donald Trump’s announcement of global tariffs in April. Since then, trade agreements and indications of an interest rate cut by the Federal Reserve have buoyed market sentiment.
The US central bank recently announced a rate reduction, citing a weak labor market and stable inflation, with forecasts suggesting two more cuts this year. However, some Federal Reserve officials, including Chairman Jerome Powell, are advocating for a more cautious approach due to still-elevated inflation levels. Powell’s remarks that stocks are “fairly highly valued” and that there is “no risk-free path” on rates have tempered market enthusiasm.
The release of the personal consumption expenditure index, the Federal Reserve’s preferred gauge of inflation, is anticipated this week, along with next week’s non-farm payrolls report. These data releases will be closely watched by the bank and are expected to influence future decisions on interest rates.
In Asian markets, Tokyo managed to hold onto positive territory early on Thursday, while other markets seesawed between gains and losses. Hong Kong remained flat, despite a significant jump in Alibaba’s stock price after the company announced plans to increase spending on artificial intelligence. China’s Chery Automobile saw a substantial surge on its trading debut in Hong Kong, raising approximately $1.2 billion in its initial public offering.
Elsewhere, small losses were recorded in Shanghai, Sydney, and Singapore, while markets in Taipei, Seoul, and Manila remained relatively stable. This followed a second consecutive day of losses on Wall Street for all three major indexes.
Economists at Bank of America have expressed optimism about the market outlook, citing easy fiscal modes in major regions and the Federal Reserve’s rate cuts as factors that could drive a boom in earnings per share and GDP growth. They believe that broadening and accelerating profits, combined with sticky inflation, could help drive sales and operating leverage, making a boom in 2026 more likely than stagflation or recession.
Key market figures at around 0230 GMT included the Tokyo Nikkei 225, which was up 0.2 percent at 45,719.71, while the Hong Kong Hang Seng Index remained flat at 26,525.03. The Shanghai Composite was down 0.1 percent at 3,850.15, and the euro/dollar exchange rate was up at $1.1745. The pound/dollar rate also rose to $1.3455, while the dollar/yen rate fell to 148.74 yen. Oil prices saw a slight decline, with West Texas Intermediate down 0.4 percent at $64.73 per barrel and Brent North Sea Crude down 0.3 percent at $69.09 per barrel.
