In early trade on Wednesday, Asian stocks showed mixed performance as investors awaited a key U.S. inflation report, with markets exhibiting cautious sentiment amid geopolitical and economic uncertainties.
The MSCI’s broadest index of Asia-Pacific shares outside Japan remained largely unchanged at 566.55, after touching a two-year high of 573.38 last week. The index has shown resilience in June, marking its fifth consecutive month of gains with a 3.5% increase.
Japanese stocks, represented by the Nikkei, and Taiwan stocks surged, particularly driven by gains in chipmakers following a rally in the tech-heavy Nasdaq on Tuesday. Notably, Nvidia rebounded over 6%, reversing losses from the previous sessions that had collectively wiped out about $430 billion in market value.
Conversely, Chinese stocks saw a slight decline, with both the blue-chip CSI300 Index and the Shanghai Composite Index edging down by 0.2% for the month, reflecting broader market caution.
Hong Kong’s Hang Seng Index also slipped by 0.16%, contributing to the overall mixed sentiment across Asian markets.
In the currency markets, the dollar index, which measures the greenback against a basket of major currencies, held steady at 105.64. The euro traded at $1.0715, showing stability amid market uncertainties.
The Japanese yen, closely watched for its impact on export competitiveness, hovered near the 160 per dollar threshold, a level that has historically prompted intervention by Japanese authorities. The yen’s recent weakness, approaching a 34-year low touched in April, has raised concerns and speculation about potential intervention measures to stabilize the currency.
Meanwhile, commodity markets showed muted movements, with Brent crude oil futures remaining flat at $85.02 per barrel and U.S. West Texas Intermediate crude futures trading at $80.90 per barrel in Asian trading.
Gold prices eased slightly to $2,318 per ounce but have maintained a strong performance throughout the year, up 12% and having reached a record high of $2,449.89 in the previous month.
Investor focus remains on upcoming economic data releases, particularly Friday’s U.S. personal consumption expenditures (PCE) price index, which is the Federal Reserve’s preferred gauge of inflation. Expectations are for annual growth to ease to 2.6% in May, influencing market expectations for future Fed policy decisions.
Overall, the Asian markets are navigating a complex landscape of economic data, geopolitical tensions, and central bank policies, with cautious optimism prevailing amidst mixed signals from global economies.