ALBAWABA — Asian markets were mixed in light Chinese Lunar New Year trade on Monday, helped by a softer dollar as investors expect milder United States Federal Reserve interest rate hikes.
Bourses in China, Hong Kong, South Korea and Taiwan remained closed.
Investors dismissed remarks made by Finance Minister Shunichi Suzuki that Japan is in an "unprecedentedly severe" financial predicament as a result of spending significantly to combat the Covid pandemic and other troubles.
Japan’s Nikkei 225 was the standout performer, rallying 1.33 percent to 26,906.04, following a blockbuster performance on Wall Street, where the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite indexes ended strong on Friday thanks to a technology sector rally.
There is sense of optimism that China opening up after years of zero-Covid policies will ease worldwide economic pressures.
Tokyo led gains, while Philippine’s PSE rose 0.19 percent to 7,069.68, Australia's ASX 200 added 0.063 percent to 7,436.90 and India’s Sensex rose 0.53 percent to 60,941.67 and Nifty 50 was up 0.42 percent to 18,118.55 were also in positive territory at market closing.
"Financials is one pocket that cannot be ignored and will likely power markets in the near term," Mayuresh Joshi, head of equity research at William O'Neil India, told Reuters.
Vietnam's HNX Index advanced 0.98 percent to 219.87, however, there were small losses in Bangkok’s SET index lost 0.3 percent and New Zealand's S&P/NZX 50 slide down 0.24 percent to 11,948.72.
"Although most Asian markets are closed for Chinese Lunar New Year celebrations, Japanese and Australian stocks are picking up on the better mood from US investors and on expectations of China's economy returning to some semblance of a pre-pandemic trend," SPI Asset Management's Stephen Innes told Agence France-Presse.
United States Federal Reserve officials provided support to equities after indicating that as inflation was under control the bank may hike rates at a much slower pace.
“… in keeping with this logic and based on the data in hand at this moment, there appears to be little turbulence ahead, so I currently favor a 25-basis point increase at the FOMC’s next meeting at the end of this month,” Christopher Waller, member of the Federal Reserve Board of Governors, said in a speech.
“Beyond that, we still have a considerable way to go toward our 2 percent inflation goal, and I expect to support continued tightening of monetary policy,” he added.
After his speech, Waller told CNBC’s Steve Liesman that the market has a very optimistic view that inflation is just going to melt away and somehow immaculate disinflation is going to occur.
“We have a different view. Inflation’s not just going to miraculously melt away. It’s going to be a slower, harder slog to get inflation down and therefore we have to keep rates higher for longer and not start cutting rates by the end of the year,” Waller added.
Other governors were also optimistic that the world's top economy could still achieve a soft landing, despite worries that it would be recession bound after a series of big rate hikes last year.
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