The markets are well oriented on Monday in Asia, relieved by the slowdown of an inflation indicator scrutinized by the American Federal Reserve (Fed), after the concerns caused by the opposing monetary attitudes in the United States and Japan which caused a fall the yen. Japanese markets rebounded “in continuation of the progression of American indices” Friday, pointed out analysts at Monex Securities.
Wall Street was reassured before the weekend by the publication of the PCE consumer price index in the United States, up 0.1% over one month in November, less than the previous month and less than the market expectations, alleviating fears about stubborn inflation. “This is excellent news, capping a week in which the Fed halved its rate cut forecast for 2025 compared to its September projections”recalled Stephen Innes of SPI Asset Management.
BOJ bookmakers perplexed
The yen, still under pressure, fell (-0.2%) against the dollar: around 06:45 GMT, the greenback traded for 156.64 yen against 156.31 yen on Friday at 9:00 p.m. GMT. The caution displayed by the Fed last week regarding its monetary easing, combined with the prolonged pause Thursday by the Bank of Japan (BoJ) on the path of its tightening, had caused the Japanese currency to fall to the lowest level in five months.
The BoJ's intentions, however, continue to intrigue: while operators were still betting a few days ago on a rate increase in December, many now believe that the Bank could also abstain in January and prefer to wait until March. “Governor (Kazuo) Ueda’s press conference surprised”noted UBS economists Masamichi Adachi and Go Kurihara. “His general message was that the BOJ wants to have more confidence in the spring wage negotiations and in the effect of US policies on the Japanese economy and inflation before raising interest rates. At first glance, it's hard to believe he intends to raise the rate in January.they added. This scenario is however still possible, according to them, because “a further depreciation of the yen against the dollar cannot be ruled out and public (and political) pressure is likely to intensify if this trend continues.”
Nissan and Honda discuss engagement
On the stock side, the Japanese automobile giant Honda climbed 3.82%. He is due to hold a press conference on Monday afternoon with his compatriots Nissan (+1.58%) and Mitsubishi Motors (+5.25%), where the three manufacturers will announce, according to local media, discussions with a view to a merger, likely to give birth to the world number three in the sector. Already associated in a “strategic partnership”Nissan and Honda intend to finalize an agreement by June 2025, reports public television channel NHK.
On the Hong Kong Stock Exchange, the Hang Seng index rose 0.67% to 19,852.20 points around 06:45 GMT. In mainland China, the Shanghai composite index fell 0.39% and that of Shenzhen lost 2.14%. After a lull on the economic indicators front, investors are now awaiting December manufacturing activity figures, which are due to be announced next week. “China's manufacturing PMI (is expected to show) rising production and orders, according to forecasts from Moody's Analytics. Indeed, orders are likely to flood in. before the inauguration of Donald Trump as president of the United States on January 20, the president-elect having announced an increase in customs duties.