Summary:
Japanese and South Korean stocks rose, following a firmer Wall Street session led by the Nasdaq
South Korea’s Q3 GDP grew 1.0% q/q, well above forecasts, and the KOSPI’s strong rally triggered a sidecar halt on program trading
Japan’s services PPI rose 3.7% y/y in September, up from a downwardly revised 3.5%, ahead of Friday’s BoJ decision
China’s industrial profits rebounded 14.4% y/y in September from 4.2% in August
The Australian and New Zealand dollars firmed ahead of Australian CPI data on Wednesday
Gold was stable and oil edged slightly lower
Wall Street lead
Asian markets took a positive lead from Wall Street, where US stocks had a firmer session on Monday with the Nasdaq leading the gains. Tech sentiment has been supported by anticipation around Anthropic’s planned stock market listing, adding to focus on the AI trade after a bruising correction in recent weeks.
Japan
Japanese stocks were higher into the lunch break. Data showed the services producer price index, which tracks what companies charge each other for services, rose 3.7% year on year in September. That was in line with forecasts and up from a downwardly revised 3.5% in August, pointing to accelerating pass-through of labour costs. The Bank of Japan concludes a two-day meeting on Friday and is expected to hold its policy rate at 1.25% while signalling readiness for further hikes. Attention is on whether its Outlook Report effectively declares that underlying inflation has reached the 2% target.
South Korea
South Korean stocks rallied strongly , with the move in the KOSPI triggering a sidecar, a temporary pause on program trading. Third-quarter GDP grew 1.0% from the previous quarter, beating the 0.7% forecast, as the AI chip boom drove exports and investment. The Bank of Korea estimates semiconductors account for about half of growth, although private consumption fell for the first time in nearly four years.
China
Industrial profits rose 14.4% year on year in September, rebounding from 4.2% growth in August. Year-to-date growth eased slightly to 15.5% from 15.7%, keeping the underlying trend firm but gradually slowing.
Currencies
The Australian and New Zealand dollars were higher. Australia’s September quarter CPI is due at 00:30 GMT on Wednesday, with major banks expecting core inflation above the Reserve Bank of Australia’s forecast and a November hike in play. In New Zealand, a majority of NZIER’s Monetary Policy Shadow Board recommended a 25 basis point hike at the RBNZ’s upcoming review.
Commodities
Gold was steady, while oil prices edged slightly lower. Energy remains a key inflation risk for central banks given ongoing tension around Iran.
Ahead
The Federal Reserve’s two-day meeting concludes on Wednesday, with several forecasters expecting the Fed to skip a hike this time before moving again in December. The BoJ decision follows on Friday.
This article was written by Eamonn Sheridan at investinglive.com.
