Asia report: Stocks mixed ahead of inflation releases, rate decisions

Asia-Pacific markets were mixed on Monday, as investors remained cautious ahead of significant economic data releases and central bank decisions later this week.

The region's markets were bracing for the Bank of Korea's rate decision on Thursday and inflation data from Japan and Singapore on Friday.

China was also set to announce its one- and five-year loan prime rates on Tuesday.

“Asian stock markets are exhibiting a mixed performance on Monday, reflecting the mixed signals from global markets on Friday,” said TickMill market analyst Patrick Munnelly.

“This comes amid growing optimism that the US economy is poised for a soft landing, driven by upbeat US retail sales data and improving US consumer sentiment.

“These factors have also increased confidence that the US Federal Reserve will begin cutting interest rates next month, albeit at a less aggressive pace.”

Munnelly noted that remarks from Atlanta Fed president Raphael Bostic and Chicago Fed president Austan Goolsbee had further strengthened market anticipation that the central bank would start reducing interest rates in September.

“The Japanese stock market is experiencing a slight decline today, ending a five-day period of gains,” he added, noting that the benchmark NIkkei index had fallen below the 38,000 handle.

“SoftBank Group, a major player in the market, is up over 1%, while Fast Retailing, the operator of Uniqlo, is down slightly by 0.5%.

“In the automotive sector, Honda is gaining close to 1%, while Toyota is down nearly 1%.”

Markets in mixed state ahead of busy week for data, rate decisions

In Japan, the Nikkei 225 fell sharply by 1.77% to close at 37,388.62, while the Topix index declined 1.4% to 2,641.14.

Major losers on Japan’s benchmark included Ebara, which dropped 5.98%, Isetan Mitsukoshi with a 5.53% decline, and Murata Manufacturing, down 4.59%.

Chinese markets fared better, with the Shanghai Composite rising 0.49% to 2,893.67 and the Shenzhen Component edging up 0.08% to 8,356.90.

Sichuan Changhong Electric surged 10.09%, leading the gains in Shanghai, followed closely by Fujian Kuncai Material Technology and Changyuan Group, both up around 10%.

Hong Kong's Hang Seng Index also saw positive movement, increasing by 0.8% to 17,569.57.

Notable performers included JD Health International, which jumped 7.93%, Li Ning Co up 7.48%, and Li Auto rising 5.29%.

South Korea's Kospi fell by 0.85% to 2,674.36, with Kogas plunging 7.13%, CS Wind Corporation down 5.38%, and Cosmo AM&T dropping 5.14%.

Australia's S&P/ASX 200 managed a modest gain of 0.12%, closing at 7,980.40.

Clarity Pharmaceuticals led the gains with a 4.48% increase, followed by Emerald Resources up 3.39% and Ebos Group rising 2.91%.

New Zealand's S&P/NZX 50 declined by 0.52% to 12,662.11, with A2 Milk Company suffering a significant loss of 18.89%.

Port of Tauranga and Serko also posted declines, down 4.1% and 3.66%, respectively.

In currency markets, the dollar was last 1.01% weaker on the yen, trading at JPY 146.14.

The greenback was also weaker against its antipodean counterparts, falling 0.29% on the Aussie to AUD 1.4952, and retreating 0.3% against the Kiwi to change hands at NZD 1.6469.

Oil prices saw a slight decline, with Brent crude futures last down 0.51% on ICE at $79.27 per barrel, and the NYMEX quote for West Texas Intermediate falling 0.65% to $76.15.

Core machinery orders fall in Japan, government preparing to list Tokyo Metro

In economic news, Japan's core machinery orders unexpectedly declined by 1.7% year-on-year in June, contrary to economists' forecasts of a 1.8% increase.

The drop in machinery orders, a key indicator of capital expenditure, suggested potential caution among businesses regarding future investments.

Elsewhere, Japan’s government was reported to be moving forward with plans to list one of the capital’s two major subway operators, Tokyo Metro, with a targeted valuation of JPY 700bn.

According to sources cited by Reuters, both the national and Tokyo governments were aiming to execute the initial public offering (IPO) by the end of October.

The IPO, which would involve selling half of the company's shares, was set to be Japan's largest since 2018, potentially raising JPY 350bn.

Reporting by Josh White for Sharecast.com.