Asian markets today are expected to focus on the trajectory of Chinese stocks following a significant decline yesterday, as well as the strength of the U.S. dollar, which continues to climb, marking its longest run of gains in more than two years.
In Japan, the economic agenda is relatively light, with the release of wholesale inflation and bank lending data, while the Philippines will release trade figures. Speeches from Bank of Japan Deputy Governor Ryozo Himino and Reserve Bank of Australia Deputy Governor Sarah Hunter could shed additional light on currency and interest rate trends.
The performance of the US dollar has become a central concern for investors across Asia. The New Zealand dollar fell 1.3% on Wednesday after the country’s central bank announced a 50 basis point cut in interest rates and signaled further easing in the coming months. This month, the New Zealand dollar fell 5%, making it the worst-performing major currency in the world.
The greenback’s rise against a basket of major currencies for the eighth consecutive day on Wednesday reflects the continued resilience of the U.S. economy, which has attracted flows into U.S. assets and led investors to reconsider their expectations for interest rates. American interests.
Chinese markets will be put to the test today after China’s benchmark stock indices suffered their biggest one-day losses since February 2020, falling 7% on Wednesday. This sharp decline followed a remarkable rise of up to 40% in just six trading days. Investors are now watching whether this pullback presents a more attractive investment opportunity or whether further losses will emerge, which could lead to calls for more robust economic policies from Beijing.
China’s Finance Ministry is to detail its economic recovery plans at a news conference on Saturday, indicating the government may prepare to introduce more aggressive measures to boost growth.
The People’s Bank of China managed to prevent the yuan from weakening beyond the level of 7.00 per dollar. Tuesday’s fix showed the largest single-day rise since May 2022, 0.9% higher than the previous fix.
In Japan, September’s annual wholesale price inflation is expected to have eased to 2.3% from 2.5% in August, which could mark the lowest rate since April. The monthly rate of deflation is also expected to increase, which would represent the fastest month-over-month decline since the previous year.
Key developments that could influence market directions today include Japan’s wholesale inflation data for September and speeches from monetary policymakers in Japan and Australia.
Reuters contributed to this article.
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