Asian Markets Surge Amid U.S. Inflation Focus

Asian markets rise as investors await U.S. inflation reports; key economic data from Japan boosts confidence.

Global Markets Update:

Asian Stock Markets:

• Nikkei: up 0.64%
• Shanghai Composite: up 0.54%
• Hang Seng: up 0.14%
• ASX: up 0.10%

Commodities:

• Gold: $2337.5 (0.03%)
• Silver: $29.48 (0.54%)
• Brent Oil: $85.73 (0.59%)
• WTI Oil: $82.31 (0.67%)

Rates:

• US 10-year yield: 4.306%
• UK 10-year yield: 4.165%
• Germany 10-year yield: 2.451%

News & Data:

Economic Indicators:

• Final GDP q/q (USD): 1.4% vs. 1.4% expected
• Unemployment Claims (USD): 233K vs. 236K expected
• Pending Home Sales m/m (USD): -2.1% vs. 0.6% expected

Market Summary:

Asian markets rose on Friday as investors examined crucial economic data from Japan and awaited U.S. inflation reports later. The Japanese yen plunged to a new 38-year low against the U.S. dollar, hitting 161.27. Amid this, Japan appointed Atsushi Mimura to replace Masato Kanda as its top currency diplomat, according to Nikkei. Inflation in Tokyo accelerated to 2.3% in June from 2.2% in May, with core inflation (excluding fresh food prices) rising to 2.1% from 1.9% in May. Tokyo’s inflation data is often a precursor to national trends.

Japan’s industrial production increased 2.8% month-on-month in May, exceeding economists’ expectations of 2%, based on a Reuters poll. Year-on-year, industrial production rose by 0.3%. These figures might give Japan more flexibility in tightening its monetary policy as the yen weakens. Meanwhile, South Korea experienced a 0.2% year-on-year decline in retail sales in May, a smaller drop than April’s revised 0.8% decrease. This marks the first instance since July 2023 of consecutive monthly declines.

Japan’s Nikkei 225 rebounded by 1.04% following the data release, with the broader Topix rising by 0.84%. South Korea’s Kospi increased by 0.13%, and the small-cap Kosdaq increased by 0.1%. Hong Kong’s Hang Seng index showed a slight gain, while mainland China’s CSI 300 recovered from a four-month low, rising by 0.11%. Australia’s S&P/ASX 200 climbed by 0.13%.

In the U.S., the S&P 500 posted a modest gain overnight as Wall Street looked forward to new inflation data to determine when the Federal Reserve might begin lowering interest rates. On Friday, the U.S. will release its preferred inflation measure, the personal consumption expenditure index. The broad market index closed slightly higher at 0.09%, the Nasdaq Composite added 0.30%, and the Dow Jones Industrial Average increased by 0.09%.

Upcoming Events:

• 12:30 PM GMT: CAD GDP m/m
• 12:30 PM GMT: USD Core PCE Price Index m/m
• 12:30 PM GMT: USD Personal Income m/m
• 12:30 PM GMT: USD Personal Spending m/m

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