Asian stocks lack clear direction, having rallied to six-week highs yesterday on the back of China’s stimulus pledge.
As of writing, Japan’s Nikkei index is down 0.69 percent. The Shanghai Composite is trading flat-to-positive, while Australia’s S&P/ASX 200 is reporting a 0.2 percent gain. Further, futures on the S&P 500 are up 0.2 percent.
Stocks rallied to six-week highs yesterday, as China’s stimulus talk boosted risk appetite. The world’s second-largest is planning large tax cut, Bloomberg reported yesterday. Further, the People’s Bank of China (PBOC) was out on the wires assuring markets that it would provide “enough support” to the economy.
The optimism seems to have faded, not surprisingly though, as China’s leading indicators are pointing to a deeper slowdown in the near future. Elsewhere, Germany’s growth rate in 2018 was the weakest since 2013.
Looking forward, stocks could suffer deeper losses as the anti-risk Japanese yen is gaining ground. As of writing, the USD/JPY pair is trading at 108.50, representing a 0.15 percent drop on the day.
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