- Expectations of further stimulus from Asia overweigh fears of the Japanese recession.
- Moody’s, IMF reiterated fears of Coronavirus.
- Markets in the US are off today, Chinese headlines will be the key catalyst.
The preliminary reading of Japan’s fourth quarter (Q4) 2019 GDP triggered recessionary fears of Asia’s top-tier economy and weighed on stocks during the early-day. However, following announcements from China and Japan, showing readiness to infuse more liquidity, offered additional strength to the Asian equities.
Also flashing downbeat signals were the IMF and Moody’s that tried compressing the risk-tone. However, news that the People’s Bank of China (PBOC) is about to lower the rate of 200 billion yuan ($28.65 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions by 10 basis points (bps) to 3.15% from 3.25% previously countered the bears.
With this, the MSCI index of Asia-Pacific shares outside Japan register 0.28% gains whereas Japan’s NIKKEI drops 0.60% to 23,548 by the press time of the pre-European session on Monday.
Shares in China and Hong Kong are more than 1.0% plus whereas those of India register mild losses worth of 0.10% by the time of writing. Markets in Singapore also pay a little heed to the GDP forecast cut while expecting further monetary easing from home and abroad.
The US markets are off today and that joins a lack of major data/events from elsewhere. As a result, the Asian shares are expected to carry the mixed sentiment unless anything key arrives from China.
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