Asian Stocks Show Mixed Price Action

Asian Stocks Show Mixed Price Action by Ashly Chole last updated on June 21, 2024

Most of the Asian stocks showed mixed price action on Wednesday as the investors have adopted a cautious approach. It appears that most of the investors are on the sidelines as they await cues on the next change in the interest rate policy.

Meanwhile, the Japanese stock markets showed a sharp decline after the release of strong wage data. This has raised the fear that the Bank of Japan will opt for a more tight monetary policy.

All Eyes On Upcoming Nfp Report

Some of the regional stocks showed some strength due to the overnight gains seen on Wall Street. In the USA, economic data releases have shown that the Fed will likely cut rates starting from Sep 2024. If we look at the US market in particular, the key focus is now on the upcoming NFP report due on Friday.

In Japan, the Nikkei 225 index shed around 0.8% of its value on Wednesday. Similarly, the TOPIX showed a loss of 1.2% after the release of average cash earnings.

The data has shown an increase of wage income in Japan and it seems that the wage hikes have finally started to show their effect in the economic data.

Stronger wages are in line with the BoJ expectations as the central bank has already forecasted higher inflation in the next few months. So, that's also a factor which gives hope to the upcoming rate hikes from the BoJ.

That's why the BoJ will likely step back from its bond purchase program but the pace of this move is still not decided. However, the conditions present a headwind for the Japanese stocks from multiple fronts.

In Australia, the ASX 200 has shown a change of +0.4% after the release of the GDP data. According to data, the growth rate of the economy was slower than in Q1 due to higher rates and inflation.

The Australian GDP data has also shown that the economy is cool down which means the RBA has now less headroom to go with any more rate hikes.