Asia-Pacific markets saw a significant rise on Monday, with Japan’s Nikkei 225 experiencing notable gains. This followed a key U.S. inflation report from late Friday that sparked hopes for an interest rate cut. The U.S. June personal consumption expenditures price index rose 0.1% month on month and 2.5% year on year, matching economists’ expectations from a Dow Jones poll.
The Nikkei ended an eight-day losing streak, climbing 2.13% to 38,468.63, while the Topix increased by 2.23%, closing at 2,759.67. The Japanese yen appreciated by 0.31% against the U.S. dollar, trading at 153.26. Among the top gainers was Mitsubishi Motors, which surged over 5% following a Nikkei Asia report that the company would join the Honda-Nissan alliance to standardise in-vehicle software. This alliance, which sells over 8 million vehicles globally, will consolidate Japan’s domestic market into two main groups: the Toyota Motor Group and the Honda-Nissan-Mitsubishi alliance.
On the other hand, Eisai’s shares plummeted by 13% after the European Medicines Agency declined to approve its Alzheimer’s treatment, Leqembi. This made Eisai the biggest laggard among the 10 Nikkei 225 stocks that fell during a generally positive day for the index.
Looking ahead in Asia, the Bank of Japan’s monetary policy meeting starting on July 30 is the week’s key event. A Reuters poll suggests that the central bank may raise rates by 10 basis points to 0.1%. ING analysts predict a 15 basis point hike along with a reduction in the bond-buying programme, citing a recovering economy and solid wage growth in May as confidence-boosting factors.
Other significant data to watch includes China’s July PMI data and Australia’s latest inflation figures, which will be released ahead of the central bank’s monetary policy meeting on August 6.
Elsewhere in the region, Hong Kong’s Hang Seng index was up 1.64% by its final hour of trade, but China’s CSI 300 declined by 0.54% to 3,390.74, mainly due to a drop in real estate stocks. South Korea’s Kospi increased by 1.23% to finish at 2,765.53, and the small-cap Kosdaq rose by 1.31% to 807.99. Australia’s S&P/ASX 200 also saw gains, rising 0.86% to close at 7,989.6.
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