- Asian indices are having a ball as a clear passage of US debt-ceiling bill through Congress has uplifted market mood.
- BoJ Ueda said that the monetary policy will remain accommodative as the economy will take some time to reach the 2% price goal.
- A surprise expansion in China’s domestic factory activity supported Chinese equities.
Markets in the Asian domain posted significant gains on Friday. Rally in Asian indices is being supported by the clear passage of the US debt-ceiling bill and favor for a pause in the policy-tightening spell by a few Federal Reserve policymakers. Asian majors are following the footprints of the S&P500 as the latter settled with significant gains on Thursday.
The US Dollar Index (DXY) is struggling to show promising recovery signals after a perpendicular sell-off post dovish commentary from Fed policymakers. Fed Governor Philip Jefferson said in a speech on Wednesday that pausing rate hikes at the next FOMC meeting would offer time to analyze more data before making a decision about the extent of additional tightening. He added that a pause does not mean that rates peaked.
At the press time, Japan’s Nikkei225 jumped 0.94%, ChinaA50 soared 1.46%, Hang Seng gallops 3.45%, and Nifty50 remains subdued.
Japanese equities are skyrocketing as Bank of Japan (BoJ) Governor Kazuo Ueda said in front of Parliament that the monetary policy will remain accommodative as the economy will take some time to reach the 2% price goal. The continuation of the ultra-dovish monetary policy is a boon for stocks as sufficient injection of liquidity into the economy would allow firms to remain handy with funds for augmenting fixed and working capital requirements.
Chinese stocks have recovered sharply as investors are confident that the economy is effectively on the path of recovery after the release of the Caixin Manufacturing PMI data. Domestic factory activity remained upbeat in May as the economic data jumped to 50.9, higher than the consensus and the prior release of 49.5. A figure above the 50.0 threshold is considered an expansion in economic activities.
The Indian market is getting volatile as investors have shifted their focus toward the interest rate decision by the Reserve Bank of India (RBI), which will release next week. A survey from Bloomberg showed that the RBI will keep its repo rate steady at 6.5% throughout the year and will announce a rate cut by 25 basis points (bps) in the first quarter of the next financial year.
On the oil front, oil prices have shown recovery after defending the crucial support of $70.00 amid expectations that OPEC+ would announce production cuts in its meeting scheduled for June 04 to provide support to lower energy prices.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.