TORONTO (Reuters) – A look at the day ahead in Asian markets.
With Wall Street closed for Thanksgiving on Thursday, Asian investors will miss the usual swing factor. Instead, the release of Japan’s core inflation data for October on Friday will set the tone for trading in the region.
Japan’s core consumer inflation rate is likely to accelerate again in October, remaining above the central bank’s 2% target rate for the 19th straight month, according to a Reuters poll.
With inflation already exceeding the Bank of Japan’s target for more than a year, the latest data could influence the central bank’s widely expected decision to raise short-term interest rates to around zero from -0.1 next year with some betting on the chance of action next year. January.
An upside surprise could support the yen against the dollar.
The Bank of Japan faces challenges in moving Japan away from the ultra-accommodative policy of the past decade without causing market turmoil or crushing the fragile economic recovery.
In China, real estate stocks are likely to be in focus again amid expectations that Beijing will provide a range of financing to support the struggling sector.
It’s a different inflation story on the other side of the world, with the European Central Bank content to ease price pressures in the eurozone. This made the European Central Bank’s decision to keep interest rates steady in October an easy task, according to reports of its October 25-26 meeting released on Thursday.
Stocks in Europe finished stronger, as ECB news reinforced the view that global central banks have finished their latest tightening campaign, and if price pressures ease, 2024 could be the year for interest rate cuts.
But some of the trade aimed at easing inflation has already been priced into the market, reflected in the nearly 11% rise in the MSCI World Index (.WORLD) in the past 18 trading days. Markets need new catalysts to fuel the next phase of the stock rally.
One factor may be the resilience of American consumers, who have continued to open their wallets despite rising borrowing costs.
Black Friday sales will kick off the year-end holiday shopping season and test American consumers’ appetite for spending.
Early indications are that U.S. retailers across apparel, electronics and home improvement are bracing for tough times, and higher discounts may not spark the level of spending businesses are hoping for.
Here are the key developments that could provide further guidance to markets on Friday:
– Consumer Price Index in Japan
– Industrial production in Singapore
– Consumer Price Index in Malaysia
– Retail sales in New Zealand
– Manufacturing production index in Thailand
– Money supply in Taiwan
Written by Denny Thomas, Edited by Josie Kao
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