Markets are dominated by inflation as US reports are due.
Asian markets are pausing to consider last week’s events on Wall Street and revise their positions as the globe gets ready for the publication of U.S. inflation data this week. The Indian consumer price inflation data for January, which is anticipated to grow to 5.9% – the first increase since September – will be the primary topic of discussion on Monday.
Economic Highlights in the Region
There will be significant economic events in the area this week in addition to the data on U.S. inflation. On Tuesday, Japan will present its Q4 and annual GDP figures. On Thursday, Indonesia and the Philippines will present their interest rate choices. On the same day, China’s Lenovo will release its third quarter earnings.
Market Effects of Inflation
The markets have already been impacted by the impending release of the US inflation report; Wall Street took a defensive attitude at the end of the week, and market volatility indicators increased. Equities have lost value as well, especially in growing industries. The volatility index hit a one-month high on Friday, and the Nasdaq has only climbed once in the previous six sessions.
Global Initiatives to Combat Inflation
The U.S. is not the only country attempting to combat inflation; Australia, India, and Sweden’s central banks have also adopted a hawkish stance. As a result, Asian stocks outside of Japan declined by more than 1% on last Friday, marking the worst weekly decline in the previous four months. On the other side, Japan’s stock market has increased for five straight weeks, marking its greatest stretch since 2020. This may alter, though, if rumors about the next governor of the Bank of Japan enhance the yen.
New Governor of the Bank of Japan
Kazuo Ueda, a former scholar and member of the Bank of Japan’s policy board, is reportedly in line to succeed Haruhiko Kuroda as governor, according to sources. According to reports, Ueda is a sensible person who enjoys favor with the central bank. He is not perceived as being explicitly a hawk or a dove, and he won’t rush to normalize policy while simultaneously being aware of its negative repercussions.