December 27, 2023 – Today’s market trends in the Asia region are influenced by a combination of geopolitical developments, economic indicators and holiday considerations. Below is a summary of key events shaping the market landscape:
Japan:
USD/JPY edged higher after the Bank of Japan (BOJ) reiterated its cautious stance on an early exit from its negative interest rate policy (NIRP) in its December opinion summary. The pair was also affected by former board member Masi’s criticism of Bank of Japan Governor Ueda’s communication style.
The Nikkei 225 led gains in Asia, opening 1.2% higher, supported by gains in the Topix Maritime Index caused by Houthi rebels disrupting the Red Sea.
The Bank of Japan stressed the need to continue patient easing, signaling a reluctance to make sudden policy changes.
China Hong Kong:
Hong Kong’s Hang Seng Index outperformed, rising 1.9%, while its technology index gained 2.6%.
Chinese online gaming stocks rebounded as Beijing approved 105 domestic games, easing industry restrictions. NetEase and Tencent rose 10% and 5% respectively.
China reported a sharp 29.5% year-on-year increase in industrial profits in November, but industrial profits have continued to decline year-to-date.
Australia New Zealand:
Australia’s ASX 200 opened 0.4% higher at 7,527 points, reaching its highest level since June 2022, benefiting from higher iron ore prices.
Market dynamics and future prospects:
Crude futures rose more than 2% as Houthi rebels continued to attack ships in the Red Sea.
Iron ore prices topped $140, supporting gains for BHP and the ASX 200 index.
Market optimism remains high, with the S&P 500 expected to reach new highs in the coming weeks.
China’s national purchasing managers’ index, which will be released on Friday, is the focus of market attention.
Several Asian countries have holidays this week, including New Zealand and South Korea on Friday.
