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Asian stocks mixed before US payrolls; Nikkei battered by hawkish BOJ

Published Dec 08, 2023 14:56
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Investing.com-- Most Asian stocks rose slightly on Friday with Chinese markets recouping a measure of recent losses, while Japan’s Nikkei 225 fell sharply after the Bank of Japan hinted that it eventually planned to begin tightening monetary policy.

Broader sentiment remained largely on edge before key U.S. nonfarm payrolls data due later in the day, which also comes just days before the Federal Reserve's final meeting for the year.

The Nikkei 225 was the worst performer for the day, falling 1.8% to a near one-month low after BOJ Governor Kazuo Ueda on Thursday outlined the options the bank had to pivot away from ultra-low interest rates.

His comments were the clearest signal yet that the world’s third-largest central bank planned to tighten its ultra-dovish policy in 2024, and triggered a sharp rally in the yen.

But Ueda still maintained his stance for policy to remain loose in the near-term, citing the need to shore up economic growth.

This notion was furthered by a revised reading on Japan’s third-quarter gross domestic product, which showed a bigger than initially expected decline in economic growth. The weak data, which also came on the heels of soft household spending figures, weighed on sentiment towards local stocks.

A BOJ pivot potentially marks an end to the several years of easy policy enjoyed by Japanese stocks. Loose policy was also a key driver of a stellar rally in Japanese stocks this year.

Chinese stocks mark small gains, set for weekly declines

China’s Shanghai Shenzhen CSI 300 rose 0.2%, recovering mildly from a near five-year low, while the Shanghai Composite added 0.3%. Hong Kong’s Hang Seng index fell 0.4%.

All three indexes were set to lose between 1.5% to 3.5% this week, as sentiment towards China was battered by a credit rating warning from Moody’s.

The ratings agency warned that China’s economy faced more headwinds from a declining property market, as well as middling measures from Beijing to support growth.

Mixed trade data for November also weighed, as a mild increase in exports was largely offset by a surprise decline in imports- which signaled cooling Chinese demand.

More cues on China’s economy are due next week, from industrial production and retail sales data for November.

Broader Asian markets were mixed. Australia’s ASX 200 added 0.2%, while South Korea’s KOSPI rose 0.9% on strength in heavyweight tech stocks.

Indian stocks come off record highs before RBI

Futures for India’s Nifty 50 index pointed to a muted open on Friday, after the index tumbled from record highs in recent sessions.

Focus was largely on a Reserve Bank of India meeting later in the day, where the central bank is widely expected to keep rates on hold for a fifth straight month amid steady Indian economic growth.

Optimism over India’s economy was a key driver of stock market gains this year, as the country remained the fastest-growing major economy in the third quarter.

But local stocks are likely due for profit taking in the coming sessions, especially as investors lock-in some profits towards the end of the year.

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Asian stocks mixed before US payrolls; Nikkei battered by hawkish BOJ
 

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