Asia report: Most markets rise after US inflation reading

Asia-Pacific markets saw a positive start to the week on Monday, with Japan's benchmark index leading the gains.

The surge followed a key US inflation report on Friday, which bolstered hopes for an interest rate cut by the Federal Reserve.

“Asian markets rallied, with investors also looking forward to a busy week which will include the Bank of Japan’s monetary policy meeting as well as an expected announcement from China, which provides the teasing prospect of further stimulus from the authorities against a backdrop of announced measures which have so far failed to whet the appetite of overseas investors,” said Richard Hunter, head of markets at Interactive Investor.

“The BoJ meanwhile, is expected to raise interest rates once more to 0.1%, while also signalling a reduction in its bond buying programme.”

Most markets in the green after Friday’s US data

Japan's Nikkei 225 rose by 2.13% to close at 38,468.63 points, while the Topix increased by 2.23% to 2,759.67 points.

Significant contributors included Shin-Etsu Chemical, which soared by 8.57%, Rakuten up by 7.56%, and Sumco which gained 6.94%.

The positive sentiment in Tokyo came amid widespread expectations of the Bank of Japan raising rates at its upcoming meeting on 30 July, according to a Reuters poll.

China's markets had mixed results, with the Shanghai Composite edging up by 0.03% to 2,891.85 points, while the Shenzhen Component dropped by 0.96% to 8,514.65 points.

Notable gainers in China were Orient Group, Danhua Chemical Technology, and Shanghai Jiao Yun Group, all surging over 10%.

Hong Kong's Hang Seng Index climbed 1.28% to 17,238.34 points.

Leading the charge were Alibaba Group, which rose 4.72%, Zhongsheng Group up 3.98%, and Techtronic Industries increasing by 3.73%.

South Korea's Kospi advanced by 1.23% to 2,765.53 points, driven by significant gains in Kogas, up 13.22%, Hanwha Aerospace up 8.04%, and Korea Aerospace up 6.85%.

Australia's S&P/ASX 200 saw a 0.86% rise to 7,989.60 points.

The Star Entertainment Group led the gains with a substantial 14.71% increase, followed by Clarity Pharmaceuticals up 5.87% and Nufarm up 5.18%.

Conversely, New Zealand's S&P/NZX 50 dropped by 0.29% to 12,313.62 points.

The biggest decliners were Fletcher Building down 5.72%, Investore Property down 5.08%, and KMD Brands down 4.44%.

In currency markets, the dollar was last down 0.08% on the yen to trade at JPY 153.63, while it increased 0.08% against the Aussie to AUD 1.5285, and rose 0.19% on the Kiwi, changing hands at NZD 1.7016.

On the oil front, Brent crude futures were last up 0.04% on ICE to $81.16 per barrel, while the NYMEX quote for West Texas Intermediate slightly fell by 0.08% to $77.10.

US inflation in focus at start of important week for data

Monday was a quiet day for economic data in the Asia-Pacific region, but a significant US inflation report from late Friday was still in focus, after it sparked hopes for an interest rate cut by the Federal Reserve.

The June personal consumption expenditures (PCE) price index increased 0.1% month on month and 2.5 percent on the year, aligning with economists' estimates.

The main focus in Asia for the week would be the Bank of Japan’s monetary policy meeting, which starts on 30 July.

According to a Reuters poll of economists, the central bank was expected to raise rates by 10 basis points to 0.1%.

Other upcoming data in the region included China’s July purchasing managers’ index (PMI) figures and Australia’s latest set of inflation data, which would be released ahead of the Reserve Bank of Australia's 6 August monetary policy meeting.

Reporting by Josh White for Sharecast.com.