-- Most Asian stocks stuck to a tight range on Thursday in anticipation of more cues on U.S. inflation and interest rates, while losses in Japanese markets extended into a fourth straight session amid persistent jitters over the Bank of Japan.
Regional stocks took a middling lead-in from Wall Street, as investors continued to digest a stronger-than-expected reading on consumer inflation, while also taking profits in heavyweight technology stocks.
U.S. futures were flat in Asian trade, with focus now turning to upcoming producer price index and retail sales data.
Nikkei 225, TOPIX under pressure as Bank of Japan meeting looms
The Nikkei 225 and TOPIX moved in a flat-to-low range on Thursday, with the Nikkei extending losses into a fourth straight session. Both indexes saw extended profit-taking after hitting record highs last week.
Selling in Japanese stocks was driven chiefly by growing conviction that the BOJ was close to ending its negative interest rate and yield curve control policies, and could even do so at a meeting next week.
Sticky inflation data and increased wages indicated that Japanese inflation was likely to remain well above the BOJ’s 2% annual target in the coming months- a trend that is likely to elicit an interest rate hike by the central bank.
Any tightening in monetary policy brings an end to nearly a decade of easy liquidity enjoyed by Japanese markets, a factor that also drove stellar gains in local stocks over the past two years.
Asian stocks muted, India nurses steep losses
Broader Asian markets moved in a flat-to-low range, as a tech rally cooled and as upcoming new loans data from China also came into focus.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes hovered near four-month highs on Thursday, with a rebound rally now appearing to have run out of steam. Investors remained largely skeptical of a Chinese economic recovery in 2024, especially after Beijing set an underwhelming growth target for the year.
Hong Kong’s Hang Seng index was flat.
Futures for India’s Nifty 50 index pointed to a positive open, after the index and the BSE Sensex 30 tumbled more than 1% each on Wednesday amid heavy profit-taking in all sectors.
Indian stocks had surged to record highs earlier this month on optimism over the fast-growing economy. But growing concerns over higher-for-longer interest rates saw investors pull out near record high levels.
Australia’s ASX 200 fell 0.1% on losses in heavyweight financial stocks. But shares of BHP Group Ltd (ASX:BHP), the world’s biggest miner, jumped over 3% tracking a rally in copper prices, which were buoyed by fears of production cuts in China.
South Korea’s KOSPI was an outlier for the day, rising 0.7%.