Asian equities remained near 15-month highs on Tuesday, while the dollar held firm ahead of eagerly awaited U.S. inflation data. Japanese bond yields edged higher as the central bank scaled back its bond purchasing program.
MSCI's Asia-Pacific index excluding Japan inched up, reaching its highest level since early 2023, supported by a sustained rally in Hong Kong shares. Japan's Nikkei remained stable. The benchmark 10-year Japanese government bond yield rose slightly to 0.95%, its highest since November, while five-year yields hit 0.555%, the highest in a decade.
Global stocks, including the S&P 500, remained steady, just below record levels. Concerns over inflation lingered, fueled by a New York Fed survey showing Americans anticipate inflation to reach 3.3% in a year, higher than previous estimates. Investors awaited U.S. producer price data, with Alibaba (NYSE:BABA) expected to report results.
Focus was on Wednesday's U.S. CPI figures, expected to show a slowdown in core CPI from 3.8% in March to 3.6% in April. However, analysts like Bob Savage from BNY Mellon (NYSE:BK) cautioned that this might not be enough to confirm Fed easing plans.
In currency markets, the dollar remained steady amid inflation concerns, with the dollar/yen pair hitting its highest level since the beginning of the month. The euro held firm, while the Australian and New Zealand dollars traded within recent ranges.
Hong Kong's Hang Seng index surged, up 30% from January lows and nearly 20% in a month. Positive demand signals and policy announcements in China, including the expansion of stock connect and support for Hong Kong's IPO market, fueled investor optimism.
In New Zealand, inflation expectations fell, while Fletcher Building revised its outlook downwards due to a housing slowdown. In Australia, the government was expected to announce another surplus in its annual budget.
Japan's central bank surprised investors with its first cut to bond buying operations since December, signaling a hawkish stance. Meme stocks, popularized by retail trading blogs and social media, saw renewed activity after "Roaring Kitty" returned to post on X.com.
GameStop (NYSE:GME) surged 74%, while oil and gold prices remained stable, with Brent crude futures at $83.40 a barrel and spot gold at $2,339 an ounce.
Paraphrasing text from "Reuters" all rights reserved by the original author.
