Asia report: Most markets fall ahead of key inflation readings

Asia-Pacific markets finished mostly lower on Monday, with investors looking ahead to key inflation data from Australia and Japan later in the week.

The data could influence central bank decisions, particularly in Australia, where higher-than-expected inflation might prompt the Reserve Bank of Australia (RBA) to raise interest rates.

“Asian markets saw a decline overnight as traders prepared for a week of political uncertainty and upcoming inflation data that could impact bets on global interest rates,” said TickMill market analyst Patrick Munnelly.

“Japanese currency official Masato Kanda announced that authorities are ready to intervene to support the yen 24/7 if needed, leading to the yen trading below JPY 160 per dollar.”

Most markets in the red, Japan the lone exception

In Japan, the Nikkei 225 rose 0.54% to 38,804.65, while the Topix increased 0.57% to 2,740.19.

Notable gainers on Tokyo’s benchmark included NH Foods, up 5.46%; Chugai Pharmaceutical, ahead 3.9%; and Aozora Bank, which was 2.94% firmer.

Chinese markets fell sharply, with the Shanghai Composite down 1.17% to 2,963.10 and the Shenzhen Component dropping 1.55% to 8,924.17.

Major losers in Shanghai were China Grand Automotive Services, down 10.23%; Beijing Vantone Real Estate, which was 10.04% lower, and Orient Group, which was off 10% by the close.

The Hang Seng Index in Hong Kong saw a slight decline of 0.05%, closing at 18,027.71.

Leading the losses in the special administrative region were SMIC, Haidilao International and Lenovo Group, which were down 3.87%, 3.31% and 2.84%, respectively.

South Korea's Kospi index decreased 0.7% to 2,764.73, as GS Holdings plummeted 14.84%, Krafton fell 7.07%, and SK Square dropped 6.46%.

The S&P/ASX 200 in Australia fell by 0.8%, ending at 7,733.70.

Resmed led the losses with a 13.2% drop, followed by Boss Energy, down 5.28%, and Evolution Mining, which settled 5.09% below the waterline.

New Zealand's S&P/NZX 50 index declined by 0.47% to 11,627.86, as KMD Brands saw a significant drop of 8.75%, while Sanford fell 4.52% and Ryman Healthcare decreased by 3.41%.

In currency markets, the dollar was nearly flat on the yen to trade at JPY 159.78, while it fell 0.17% against the Aussie to AUD 1.5031, and declined 0.15% on the Kiwi to last change hands at NZD 1.6318.

Oil prices edged higher, with Brent crude futures last up 0.16% on ICE at $85.38 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.17% to $80.87.

Bank of Japan deliberated rate hike this month, China fiscal revenue falls

In economic news, the Bank of Japan (BOJ) disclosed that it deliberated on the possibility of raising interest rates during its June monetary policy meeting.

The central bank emphasised that any adjustments to the policy interest rate would depend on clear economic indicators, such as a rebound in the consumer price index (CPI) inflation rate and an increase in medium to long-term inflation expectations.

Last week, BoJ Governor Kazuo Ueda indicated to parliament that the central bank might consider a rate hike as early as its July meeting.

Elsewhere, China reported a 2.8% decrease in fiscal revenue for the first five months of 2024 compared to the same period in 2023.

The decline was a slight increase from the 2.7% year-on-year fall recorded from January to April.

For May alone, fiscal revenue dropped 3.2% year on year, showing an improvement from the 3.7% decline seen in April.

Reporting by Josh White for Sharecast.com.