Before market opening (21.07.2023)

  • Indices in the Asia-Pacific region were mostly down in Friday’s trading session. Japan’s Nikkei lost nearly 0.52%, Australia’s S&P/ASX 200 fell 0.20% and Chinese futures rose 0.2%.
  • Asian markets showed volatility on Friday amid lackluster results from US technology companies and strong signs in the labor market that could lead to another rate hike in 2023.
  • Major Asian indexes were almost flat, with Japanese and Chinese shares fluctuating. The MSCI Asia Pacific index fell for the fifth day in a row. U.S. stock futures traded in a tight range after the Nasdaq 100 fell for the first time in more than five months on Thursday.
  • Declines in U.S. markets could disrupt this year’s massive gains, with the S&P 500 up 18% and the Nasdaq 100 up 41%, despite a fragile economic outlook and tough Federal Reserve action.
  • Chinese investors are looking for new government support measures.
  • More cautious and balanced policy actions could prolong the decision-making process, potentially putting further pressure on corporate earnings in the next two quarters.
  • The offshore yuan was little changed on Friday following a higher-than-expected peg by the People’s Bank of China (PBoC). The yuan rose on Thursday after more support from the central bank.
  • The artificial intelligence boom is leading to a rebalancing of the index from July 24, potentially reducing weightings in shares of Amazon, Nvidia and Microsoft, which could put downward pressure on passive fund adjustments.
  • Inflation in Japan reached 3.3% nationally, against a forecast of 3.2% and an earlier figure of 3.2%.
  • Japan’s one-year core inflation rate remains steady at 3.3% as expected, slightly higher than the previous figure of 3.2%.

USDJPY is again trading around 140 points. After today’s rise in inflation, the Japanese currency does not seem to be reacting significantly. Despite higher-than-expected inflation, raising the possibility of action by the Bank of Japan (BoJ).

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