Asian Stock Market: Trades flat amid Fed’s interest rate buzz, USD Index recovers, oil consolidates

  • Asian stocks are trading almost flat as investors await US PCE price index data for further guidance.

  • Japanese stocks have failed to display a power-pack action despite the Tokyo’s inflation met estimates.

  • S&P500 futures have surrendered one-third of gains recorded on Thursday

Markets in the Asian domain are displaying a lackluster perfromance as investors are awaiting fresh development for Federal Reserve (Fed)’s interest rate discussions for further action. S&P500 futures have surrendered one-third of its gains recorded in Thursday’s session as investors have turned anxious ahead of the release of the United States Personal Consumption Expenditure (PCE) Price Index data, which is restricting the upside in the Asian equities. Meanwhile, the downside is being supported by upbeat US Gross Domestic Product (GDP) and Durable Goods Orders data.

At the press time, Japan’s Nikkei225 trades almost flat, Hang Seng eases 0.14%, Nifty50 surrenders 0.54%, KOSPI jumped almost 1%. Meanwhile, Chinese markets are closed on account of Lunar New Year festival.

The US Dollar Index (DXY) has recovered firmly after dropping to near 101.30 in the Asian session. Investors preferred to hide themselves behind safe-haven assets as the release of the US PCE Price Index is expected to trigger sheer volatility in global market. Talking about the monetary policy by the Fed next week, Fed chair Jerome Powell is expected to hike interest rates by 25 basis points (bps) to 4.50-4.75%.

Japanese stocks have failed to display a power-pack action despite the Tokyo’s inflation met estimates. The headline Consumer Price Index (CPI) landed at 4.4% in line with the projections. The core CPI that excludes oil and food prices released at 3.0% higher than the estimates of 2.8%. Meanwhile, Japanese Prime Minister (PM) Fumio Kishida said in an appearance on Friday that he acknowledged the Bank of Japan’s (BoJ) December policy decision was an operational tweak to enhance and sustain monetary easing effects smoothly.

On the oil front, oil price is deomnstrating a lackluster performance as investors might take positions at full capacity after geeting outcome of the OPEC+ panel meeting. Reuters recently reported that the panel is unlikely to alter production levels, given that crude prices recovered sharply in early 2023, and that demand is forecast to surge as the Chinese economy recovers. 

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