Asia-Pacific Markets Surge Led by Nikkei 225

Asia-Pacific markets, led by Japan’s Nikkei 225, surged after positive U.S. inflation data fueled rate-cut hopes.

Global Markets Overview:

• Asian Stock Markets: Nikkei 225 up 2.29%, Shanghai Composite down 0.05%, Hang Seng up 1.71%, ASX 200 up 0.80%
• Commodities: Gold at $2,436.35 (+0.37%), Silver at $28.18 (+0.45%), Brent Oil at $80.63 (+0.57%), WTI Oil at $77.49 (+0.48%)
• Rates: U.S. 10-year yield at 4.187%, U.K. 10-year yield at 4.103%, Germany 10-year yield at 2.403%

Markets Update:

Asia-Pacific markets experienced a notable surge on Monday, driven by a strong performance from Japan’s Nikkei 225, following the release of a crucial U.S. inflation report. The report, detailing the U.S. June Personal Consumption Expenditures (PCE) Price Index, showed a 0.1% increase month-on-month and a 2.5% rise year-on-year, aligning with economists’ expectations. Furthermore, this data has bolstered investor optimism regarding the Federal Reserve’s potential interest rate cut.

The Nikkei 225 surged by 2.29%, and the broader Topix index rose by 2.02%, signaling that if these gains continue, it might end its eight-day losing streak. Moreover, the Japanese yen strengthened by 0.18% against the dollar, trading at 153.44.

Asia-Pacific Markets Surge Led by Nikkei 225

Mitsubishi Motors stood out as a primary beneficiary, with its shares jumping over 6% after news that it would join the Honda-Nissan alliance to standardize in-vehicle software. Additionally, this strategic move aims to consolidate the domestic automotive market into two primary groups: the Toyota Motor Group and the Honda-Nissan-Mitsubishi alliance. Conversely, shares of Eisai plummeted by 13% after the European Medicines Agency rejected its Alzheimer’s treatment, Leqembi, marking the most significant decline among the ten lagging stocks in the Nikkei 225 during the broad market rally.

The market anticipates the Bank of Japan’s monetary policy meeting, starting July 30, to be a significant event. However, a Reuters poll suggests the central bank may raise rates by ten basis points to 0.1%. ING analysts are forecasting a 15 basis point hike along with a reduction in the bond-buying program, driven by economic recovery and robust wage growth. Watch China’s July PMI and Australia’s inflation figures, as analysts will scrutinize them before the Reserve Bank of Australia’s policy meeting on August 6.

South Korea’s Kospi index climbed 1.3%, while the Kosdaq rose by 0.59%. Hong Kong’s Hang Seng index saw a 1.6% increase, although China’s CSI 300 fell by 0.3%, mainly due to a utility stock decline. The S&P/ASX 200 advanced by 0.80% in Australia, and Taiwan’s Weighted Index rebounded by 1.04%.

In the U.S., the Dow Jones Industrial Average gained 1.64%, the S&P 500 rose by 1.11%, and the Nasdaq Composite increased by 1.03% on Friday, reflecting positive market sentiment. This upturn was also driven by oversold conditions, a strong GDP report, and growing expectations for Federal Reserve rate cuts, as CFRA Research’s Sam Stovall noted.

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