Asian stocks steady, BOJ policy shift looms

Asian stocks remained near a seven-month high on Thursday, with Japan’s Nikkei ending a losing streak despite facing its largest weekly drop in three months as speculation mounts over a Bank of Japan (BOJ) policy change, Reuters reported.

The MSCI Asia-Pacific index stayed close to its recent peak, unaffected by US inflation data. S&P 500 futures rose by 0.15 per cent, Nasdaq futures rose by 0.3 per cent, and EUROSTOXX 50 futures dipped slightly by 0.04 per cent.

Investors are now looking towards US producer price data and February retail sales, which will influence the core PCE price index, the Federal Reserve’s preferred inflation gauge. This data is crucial ahead of the Fed’s policy meeting, which may provide hints on the start of the rate-easing cycle.

The dollar remains weak, with the euro at $1.0941 and sterling near a seven-month high. Chinese indices, the CSI300 and Shanghai Composite, fell by over 0.6 per cent, and Hong Kong’s Hang Seng Index dropped 1 per cent, affected by biotech sector developments and Wuxi AppTec’s share decline.

In Japan, bond yields rose, with the 10-year JGB yield at 0.78 per cent, as the market anticipates the BOJ might end negative interest rates. The yen weakened to 147.92 against the dollar, and the Nikkei closed up 0.3 per cent.

Commodity prices saw Brent crude at $84.07 a barrel, US crude at $79.72, and spot gold at $2,168.69 an ounce.

The financial markets are closely watching the BOJ’s wage talks and potential policy shifts, which could signal a more aggressive stance on achieving its 2 per cent inflation target and influence global rate expectations.