Asia report: Japan returns from holiday to lead regional gains

Asia-Pacific markets saw broad gains on Tuesday, with Japan's stocks leading the way.

The region's major indexes were in the green as investors looked ahead to key US inflation data, due on Wednesday.

“Following mixed signals from Wall Street overnight, Asian stock markets are trading mixed on Tuesday,” said TickMill market analyst Patrick Munnelly.

“Traders appeared hesitant to make big changes in positioning ahead of the release of important US inflation numbers later in the day and tomorrow, which are expected to have an impact on the outlook for US interest rates.

“Tuesday's post-holiday trading has seen a significant increase in the Japanese stock market, building on the gains of the previous session.”

Munnelly said that following “conflicting overnight indications” from Wall Street, the Nikkei was ahead more than 3% to above the 36,000 handle.

“Strong advances across all sectors are being led by index heavyweights and technology firms.”

Markets in the green across the Asia-Pacific region

The Nikkei 225 surged by 3.45% to 36,232.51, marking a strong rebound as trading resumed in Japan after a holiday.

The broader Topix index also climbed by 2.83% to 2,553.55.

Major Japanese companies such as Fujikura, Ebara, and Rakuten saw significant gains, with Fujikura rising by 10.96%.

China's markets posted modest gains, with the Shanghai Composite inching up by 0.34% to 2,867.95 and the Shenzhen Component increasing by 0.43% to 8,409.22.

Notable performers in Shanghai included Nanjing Chemical Fibre and Xiamen King Long Motor Group, both gaining over 10%.

Hong Kong's Hang Seng Index also moved higher, rising 0.36% to 17,174.06, supported by gains in China Unicom Hong Kong, ENN Energy, and Xiaomi.

In South Korea, the Kospi edged up by 0.12% to 2,621.50, driven by a strong performance from gaming company Krafton, which surged nearly 13%.

Meanwhile, in Australia, the S&P/ASX 200 rose by 0.17% to 7,826.80, with Orora leading the gains, soaring over 19%.

New Zealand's S&P/NZX 50 also saw a rise of 0.31% to 12,319.06, with Pacific Edge jumping by 11.36%.

The gains for the biotech firm came after the country's centre-right coalition government announced plans to loosen restrictions on genetic modification outside of research laboratories, and establish an industry regulator.

In currency markets, the dollar was last 0.42% stronger on the yen to trade at JPY 147.83.

The greenback was meanwhile weaker against its antipodean counterparts, falling 0.29% on the dollar to AUD 1.5139, and retreating 0.39% from the Kiwi to change hands at NZD 1.6551.

Oil prices experienced minor declines, with Brent crude futures last down 0.43% on ICE at $81.95 per barrel, and the NYMEX quote for West Texas Intermediate off 0.45% at $79.70.

Japan producer prices rise as expected, Singapore economy expands

In economic news, Japan's producer price index (PPI) increased 3.0% year-on-year in July, aligning with market expectations and marking a slight uptick from June's 2.9% rise.

That represented the sixth consecutive month of acceleration, and the fastest rate of increase in nearly a year.

A key factor driving the growth was the 10.8% year-on-year surge in yen-denominated costs for imported materials, up from a revised 10.6% increase in June.

The ongoing depreciation of the yen continued to elevate import prices, contributing to higher production costs across Japan.

On a month-on-month basis, the PPI rose by 0.3%, also in line with forecasts.

In Singapore, the economy expanded by 2.9% in the second quarter compared to the same period last year, consistent with the preliminary estimates released in July.

The Ministry of Trade and Industry attributed the growth to robust performances in the wholesale trade, finance and insurance, and information and communication sectors.

Looking ahead, the city-state revised its 2024 GDP growth forecast to a range of 2% to 3%, slightly narrowing the previous estimate of 1% to 3%.

Reporting by Josh White for Sharecast.com.