Bank of Japan Governor Kazuo Ueda delivers a speech at the start of issuance of new yen banknotes at the Bank of Japan headquarters in Tokyo on July 3, 2024.
Str | Afp | Getty Images
Asia-Pacific markets were mixed on Wednesday as investors awaited the Bank of Japan’s rate decision and assessed China’s business activity data.
Economists polled by Reuters expecting the bank to raise rates to 0.1%, though other analysts are expecting a larger hike. The BOJ’s benchmark interest rate currently is in a range of 0% to 0.1%.
Should the bank raise rates, this will mark the first time since 2010 that its benchmark interest rate stands firmly at 0.1% or higher.
China’s factory activity contracted at a slightly faster pace in July, with the official manufacturing purchasing managers’ index standing at 49.4, down from 49.5 in June. This figure, however, beat forecasts from a Reuters poll, which expected the PMI to come in at 49.3.
Australia’s second-quarter inflation rose 1% compared to the last quarter, while inflation climbed 3.8% year on year.
June’s inflation rate also came in at 3.8%, in line with expectations and decelerating from the 4% seen in May.
A weaker inflation reading could open the possibility of rate cuts from the Reserve Bank of Australia, or at least discourage it from raising rates, a course of action that was discussed at its last monetary policy meeting.
Japan’s Nikkei 225 fell 0.94% ahead of the BOJ decision, while the broad-based Topix was down 0.4%. The country’s retail sales climbed 3.7% year on year in June, beating expectations of a 3.2% rise from economists polled by Reuters.
South Korea’s Kospi rose 0.17%, with heavyweight Samsung Electronics up 0.49% as the firm reported a whopping 1,458.2% year on year rise in second-quarter operating profit. The small-cap Kosdaq was close to the flatline.
Australia’s S&P/ASX 200 was up 1.19%, leading Asian markets.
Hong Kong Hang Seng index was up 0.42%, while the mainland Chinese CSI 300 was marginally down.
Separately, China’s securities regulatory commission has replaced vice chairman Fang Xinghai with Li Ming, its inspection bureau chief. Fang has been in the role of CSRC vice chairman since 2015. The state-run Global Times, citing local media, reported that Fang was retiring.
Overnight in the U.S., the S&P 500 was dragged lower by declines in megacap tech stocks, as investors braced for quarterly reports from names in that cohort. Traders also set their eyes on Washington as the Federal Reserve began its latest policy meeting.
Nvidia shares pulled back by 7%, while Microsoft shed about 0.9%. Tech-related giants Amazon, Netflix and Meta Platforms also declined.
The broad market index lost 0.5%, while the Nasdaq Composite tumbled 1.28%. In contrast, the Dow Jones Industrial Average climbed 0.5%.
—CNBC’s Pia Singh and Yun Li contributed to this report.