Asian shares mowed down by the Fed, the uncertainty of the BOJ exchange rate; salary data in focus By Investing.com
Investing.com– Most Asian stocks fell on Friday, marking a weak end to their first full trading week in 2025, as investors remained nervous about a slower pace of U.S. interest rate cuts and a potential hike by the Bank of Japan.
Weak inflation data from China, released earlier this week, also weighed on sentiment, as did heightened speculation about President-elect Donald Trump’s plans for trade tariffs against the country.
Regional markets followed losses in their global markets, as signals from the Federal Reserve this week boosted bets on a slower pace of monetary easing this year.
U.S. stock index futures fell in Asian trade as investors waited ahead of key data due later in the day, which is likely to weigh on the outlook for rates.
Japanese stocks fell on speculation about a BOJ rate hike
Japanese stocks were in the red for a third day in a row, as higher-than-expected wages and private consumption data fueled bets that the BOJ could raise rates in January.
It fell 0.6%, while it lost 0.5%. Both indices traded down 1% and 2.2% respectively in the week.
data for November comes in stronger than expected, coming just a day after data showed a larger-than-expected increase in .
The strong spending data comes as Japanese workers continue to benefit from large wage increases achieved in early 2024.
Analysts said that the large spending was factored into the BOJ’s expectations of a good cycle of increased inflation, and could invite the central bank to raise interest rates as early as January.
They latched onto this idea, further pressuring Japanese stocks, especially those with export exposure.
Chinese stocks under pressure from weak data, nervousness in customs
China’s and indexes each fell about 0.3%, while Hong Kong’s index remained unchanged.
All three indices had weekly losses, with the Hang Seng down 2.2% after Tencent Holdings Ltd (HK: ) – one of its biggest constituents – was added to the US blacklist this week.
The addition – which was still made during the Biden administration – raised concerns about how tougher US rhetoric against China will become after Trump takes office on January 20.
Sentiment toward China was further undermined by weak inflation data released this week, although the readings also prompted some bets on more stimulus from Beijing.
Broader Asian markets were mostly negative, as risk appetite weakened ahead of US wages data.
Australia’s index fell 0.6%, while Singapore’s index fell 1.5%.
South Korea’s remained unchanged amid the country’s continued political turmoil as authorities sought to arrest President Yun Suk Yeol over a failed attempt to impose martial law.
for the Indian index pointed to a flat open, with a number of key Indian company earnings to be released in the coming days. But the index has posted heavy losses in recent weeks, amid waning confidence in India’s economy.
