Asian stocks dip as markets await central banks, economic cues

By Ambar Warrick

Investing.com– Most Asian stocks moved in a flat-to-low range on Monday as markets hunkered down before a slew of central bank meetings and economic readings due over the next two weeks, with focus also turning to the U.S. earnings season.

Regional markets logged steep losses last week, as a string of weaker-than-expected earnings from major U.S. firms ramped up fears of slowing business activity amid rising interest rates. 

Hawkish signals from the Federal Reserve also weighed, as an increasing number of policymakers called for more rate hikes to curb inflation.

Japan’s edged higher on Monday ahead of due this week.  Data released  last week showed that remained stubbornly high through March, likely providing continued headwinds to the economy. 

But the main point of focus is a on Friday- its first under new Governor Kazuo Ueda. The BOJ is widely expected to maintain its ultra-dovish stance, but could provide cues on plans for tightening later this year, especially as inflation remains sticky.

South Korea’s fell 0.8% ahead of due Tuesday, which is expected to show that growth likely slowed amid continued headwinds from weak exports. The Bank of Korea had recently paused its rate hike cycle due to pronounced economic weakness. 

China’s and indexes fell 0.6% and 0.4%, respectively, while Hong Kong’s lost 0.6%. Mixed economic readings from China also raised questions over the scope of a recovery this year, as the country’s manufacturing sector continued to struggle.

Australia’s was flat ahead of a this week, as well as a next week.

Broader Asian markets trended in a flat-to-low range, with caution setting in ahead of key U.S. economic readings this week. , due on Thursday, is expected to show that growth slowed further from the prior quarter, while a reading on the , which is the Fed’s preferred inflation gauge, is also expected to show that inflation remained stubborn in March.

The data comes ahead of a , where the bank is set to hike rates by another 25 basis points. Fears of rising U.S. interest rates have battered Asian markets in recent weeks, given that tighter liquidity conditions in the West usually herald slower capital flows to Asia.