Asian Stock Market: Catches cough as S&P500 dives, BoJ Kuroda maintains dovish stance
|- Asian stocks are heavily punished as S&P500 was dumped heavily on Thursday.
- The headline of China’s XI Jinping selection for the third presidential term has failed to support Chinese stocks.
- Moderate capital expenditure and consumption in Japan cited by BoJ Kuroda has brought volatility in Nikkei225.
Markets in the Asian session are demonstrating a bloodbath as rising fears of aggressive interest rate hikes by the Federal Reserve (Fed) turned investors risk-averse. Asian stocks are discounting the intense sell-off that happened in the 500-US stocks basket on Thursday as expectations of upbeat labor market data are conveying that Fed chair Jerome Powell would have no other option than to paddle rates higher.
The US Dollar Index (DXY) has attempted a recovery move after two days of gradual correction. The USD Index is likely to regain the driving seat as investors might gung-ho for safe-haven assets after the release of the United States Nonfarm Payrolls (NFP) data, which will provide clarity on US labor market data.
At the press time, Japan’s Nikkei225 cracked 1.68%, ChinaA50 tumbled 1%, Hang Seng nosedived 2.62%, and Nifty50 surrendered more than 1%.
Fading optimism over Chinese economy recovery after the dismantling of pandemic controls has pushed equities to the south. Thursday’s weak inflation figures have cleared that the economy is struggling to steer its domestic demand.
Also, the headline of China’s XI Jinping selection for the third presidential term unanimously by the Chinese parliament has failed to support Chinese stocks.
Japanese equities have shown immense volatility as Bank of Japan (BoJ) Governor Haruhiko Kuroda favored the continuation of ultra-loose monetary policy in its last meeting. The statement from BoJ Kuroda that capital expenditure and consumption are moderate and exports and imports are trending sideways have triggered a sense of pessimism among investors as the central bank is disbursing heavy stimulus for a longer period.
On the oil front, oil prices have dropped to near $75.00 amid rising fears of a bleak economic outlook in the United States and China.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.