Asia report: Markets mixed ahead of Jackson Hole symposium

Asia-Pacific markets showed a mixed performance on Friday, as investors awaited remarks from US Federal Reserve chairman Jerome Powell at the Jackson Hole economic symposium later in the global day.

Inflation in Japan was also in focus, with the headline rate remaining unchanged, and the ‘core-core’ inflation rate, excluding fresh food and energy, declining to its lowest level since September 2022.

“The Asian stock markets are primarily trading lower on Friday, consistent with the generally negative signals from Wall Street overnight,” said TickMill market analyst Patrick Munnelly.

“The yen strengthened against the dollar after Bank of Japan Governor Kazuo Ueda struck some hawkish notes before lawmakers during a parliamentary hearing.

“Treasury yields eased slightly, after having climbed overnight for the first time in five sessions. Gold edged up slightly but was poised for a weekly loss.”

Munnelly added that traders were holding off on meaningful positioning in anticipation of the Jackson Hole Economic Symposium, scheduled to start later in the day.

“Traders believe that the probability of a rate cut next month has already been factored into the markets.

“Prior to Powell's remarks, the FedWatch Tool of CME Group predicts a 75.5% likelihood of a quarter point rate cut next month and a 24.5 % likelihood of a half point rate cut.”

Markets in a mixed state as investors look to Jackson Hole

Japan's markets posted gains, with the Nikkei 225 rising 0.4% to 38,364.27 and the Topix increasing by 0.5%.

Notable gainers on Tokyo’s benchmark included Sharp Corporation, which surged 6.95%, Shimizu up by 4.72%, and Taisei increasing 3.69%.

China’s stock markets also edged higher, with the Shanghai Composite up 0.2% to 2,854.37 and the Shenzhen Component gaining 0.24% to 8,181.92.

Significant stock movements included Heilongjiang Interchina Water Treatment, Huali Industries, and Sichuan Changhong Electric, each soaring over 10%.

Hong Kong's Hang Seng Index fell by 0.16% to 17,612.10.

The market was weighed down by steep declines in tech and shipping stocks, with NetEase plummeting 10.28%, Orient Overseas International dropping 7.32%, and Hansoh Pharmaceutical Group falling 6.91%.

South Korea’s Kospi declined 0.22% to 2,701.69, as losses in the chemicals and biosensor sectors weighed on the market.

Kumyang saw a 5.32% drop, followed by SD Biosensor with a 4.64% decline, and Isu Specialty Chemical down 4.43%.

Australia’s S&P/ASX 200 slipped slightly by 0.04% to 8,023.90, breaking its 10-day winning streak.

The market saw significant losses in several sectors, with Spark New Zealand down 7.4%, Whitehaven Coal decreasing 7.19%, and Fletcher Building losing 7.05%.

New Zealand’s S&P/NZX 50 went the other way, gaining 0.49% to close at 12,529.99.

Fisher & Paykel Healthcare led the gains with a 10.28% increase, followed by Property for Industry and Skellerup Holdings, which rose 2.22% and 1.66%, respectively.

In currency markets, the dollar was last down 0.1% on the yen to trade at JPY 146.15, while it dropped 0.31% against the Aussie to AUD 1.4869, and decreased 0.29% on the Kiwi, last changing hands at NZD 1.6247.

In commodities, oil prices saw a modest increase, with Brent crude futures last up 0.8% on ICE to $77.84 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.9% to $73.67.

Japan’s core-core inflation falls to lowest level in nearly two years

In economic news, Japan's inflation data for July revealed a steady headline inflation rate of 2.8%, unchanged from the prior month.

Core inflation, excluding fresh food prices, rose slightly to 2.7%, meeting economists' expectations and exceeding June’s 2.6%.

However, the ‘core-core’ inflation rate, which excludes both fresh food and energy costs and is closely monitored by the Bank of Japan, dropped to 1.9% from 2.2% in June, marking its lowest level since September 2022.

Elsewhere, Bank of Japan governor Kazuo Ueda addressed the country’s parliament, emphasising the central bank's commitment to remaining “highly vigilant” amid ongoing market instability, according to Reuters.

Reporting by Josh White for Sharecast.com.