Asian Stocks Are Down Due To Inflation Uncertainty

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Asian Stocks Are Down Due To Inflation Uncertainty

Asian Stocks Are Down Due To Inflation Uncertainty

With the highly anticipated inflation data from the USA only a few days away, most Asian stocks were trading lower on Monday. On the contrary, Chinese stocks are rising as investors believe that the Chinese economy will stage a strong recovery.

The biggest loser for the day is Nikkei 225 index which is already down by 1%. On that front, the major catalyst is the announcement of the next BOJ governor. As per the local media reports, the government will make a formal announcement of the BOJ governor this week.

For the next governor of BOJ, there are a lot of challenges, such as high inflation, slow growth, and a very loose monetary policy. So if we get a hawkish governor, it will make the Japanese stocks turn even lower.

All Major Asian Indices Are Down

It seems that even the tech-heavy indices from the Asian region are down ahead of the CPI release. In South Korea, we have the KOSPI, which is down by 0.3%, while the Hang Seng from Hong Kong is down by 0.6%. Similarly, the Taiwan Weighted Index was also down, which tells us that red is the theme for today!

The market participants seem correct about their worry about the upcoming CPI release. For the most part, the CPI data is expected to show slow inflation in the month of January. But getting a higher rating would open doors to more rate hikes from the central bank.

As per the experts, an increase in US interest rates will negatively impact the Asian stock markets. Because if you think about it, the capital flows will increase from Asia towards the USA!

And if we look at China, the CSI 300 and Shanghai Composite index is up marginally. When compared with their peers, the indices from China are outperforming so far and leading the charge.

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