- Asia-Pacific shares remain firmer after FOMC Minutes flag key discussions.
- The number of covid cases in China is on the rise, but hopes of a RRR cut and other stimulus measures are keeping buyers hopeful.
- Japan’s manufacturing activity contracted at the fastest pace in two years, BOK raised its benchmark rate by 25 basis points.
Market sentiment in Asia improved during Thursday due to a lack of major catalysts. That said, hopes of more stimulus from China and talk of easy rate hikes are also fueling the market’s cautious optimism.
According to the latest minutes of the Federal Open Market Committee (FOMC) meeting, most policymakers discussed the need to slow interest rate hikes, which in turn boosted risk sentiment. In addition, the dollar was weighed down by talk of a “sufficiently restrictive” level of interest rates from the Federal Reserve System (Fed).
Elsewhere, hopes of Chinese government measures to ease the pain in the real estate and financial sectors, as well as talk of a cut in the People’s Bank of China’s (PBOC’s) reserve requirement ratio (RRR), appeared to favor risk sentiment.
Amid these plays, MSCI’s index of Asia-Pacific shares outside Japan extends the previous day’s rally, while Japan’s Nikkei 225 rose 1.10% on the day.
It is worth noting that preliminary readings for Japan’s Jibun Bank Manufacturing PMI fell to 49.4 from 50.7 in previous releases and forecasts, which in turn suggests a decline in manufacturing activities in Tokyo.
Shares in China are the biggest gainers, while South Korea’s KOSPI fails to justify the Bank of Korea’s rate hike. Further, shares in Australia and India are also rising, while New Zealand shares are ignoring hawkish comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr.
On another page, US vacation and light calendar elsewhere connect mixed performance oil prices challenge momentum traders. However, hopes of easy rates kept equity traders bullish during the slow morning hours of the day.