Asian Stock Market: Cautious optimism prevails amid China holidays, light calendar

Asia-Pacific shares grind higher as investors await key data/events amid off in regional major China.
Japan PM Kishida rejects rumors over covid-linked state of emergency.
China official PMIs came in softer for January before the Lunar New Year festivities began.

Anil Panchal FXStreet

Asian equities begin the key week on a slightly positive tone despite China’s holidays and a light calendar. It’s worth noting that the market’s consolidation also ignores firmer US Treasury yields and covid fears in Japan.

While portraying the mood, the MSCI index of Asia-Pacific shares ex-Japan rises 0.70% intraday whereas Japan’s Nikkei 225 rises over 1.20% heading into Monday’s European session.

The record top covid numbers in Tokyo earlier raised speculations that Japan will be forced to announce the second virus-linked state of emergency. However, the Japanese Prime Minister (PM) Fumio Kishida recently rejected those fears while citing no such consideration on hand. Also favoring Japanese equity traders could be the comments from Japan Cabinet Secretary Matsuno who said, “Not appropriate to unfreeze program that would temporarily suspend taxation on gasoline.”

Furthermore, softer prints of Japan’s December month Industrial Production and Retail Trade also favored the equities.

Elsewhere, Australia’s ASX 200 prints mild losses whereas New Zealand’s NZX 50 rises 0.80% amid mixed concerns over the covid woes at respective ends.

It should be noted that stocks in Hong Kong, South Korea and India rise over 1.0% whereas Indonesian markets print sluggish moves of late.

On a broader front, the US 10-year Treasury yields stay firmer around 1.79% whereas the 2-year counterpart rises past 1.2% at the latest.

Moving on, preliminary readings of Eurozone Q4 GDP and Germany’s key inflation data, namely the Harmonized Index of Consumer Prices for January will be crucial for intraday direction. However, major attention will be given to Friday’s US NFP as Fed hawks struggle to justify a 0.50% rate hike after downbeat prints of the US Q4 Employment Cost Index (ECI).

Talking about commodities, oil prices stay firmer around the multi-day top on geopolitical concerns ahead of the OPEC+ meeting whereas gold drops for the fourth consecutive day even as the US dollar extends Friday’s pullback.

Read: Gold Price Forecast: XAU/USD bears eye $1,753 despite softer USD

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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