Asian markets opened Tuesday with a mixed tone, as investors digested Monday’s US tech rally and looked ahead to key inflation figures due out later in the week. Sentiment remained tentative amid uncertainty around the US Federal Reserve’s policy trajectory and cautious optimism in China’s equity space.
Japan’s Nikkei 225 slipped by 0.5% in early trading, pulled down by a stronger yen and profit-taking in the tech sector. Despite recent gains driven by AI and chip stocks, concerns over slowing momentum and central bank tightening have created a more subdued tone. Meanwhile, the broader Topix index also dipped slightly, reflecting weakness across major industrial sectors.
Hong Kong’s Hang Seng Index rose nearly 1%, lifted by Chinese property and tech names after local reports hinted at further government support measures. The Chinese CSI 300 index was marginally higher, extending its gradual recovery amid stabilisation signals from Beijing. However, trade volumes remain light as investors await firmer policy commitments and data clarity.
South Korea’s Kospi was largely flat, with traders holding positions ahead of Wednesday’s US CPI release, which could guide the Federal Reserve’s decision at next week’s meeting. Australian shares moved modestly higher, driven by energy stocks after oil prices climbed overnight on supply concerns and geopolitical tensions in the Middle East.
Currency markets showed little direction, with the dollar steady against major peers. The Japanese yen hovered around 157.10 per dollar, supported by expectations that the Bank of Japan may move closer to a rate hike this summer. Gold prices held near record highs, while oil prices rose slightly, with Brent trading just under $83 per barrel.
Looking ahead to the European open, futures suggest a mildly positive start, with investors focusing on UK employment data and the eurozone’s ZEW economic sentiment reading. Markets will also track speeches from several European Central Bank officials, including President Christine Lagarde, for insights into the rate outlook.
In the United States, attention is firmly on the consumer price index report due Wednesday. Traders are pricing in a roughly 50% chance of a Fed rate cut by September, with any sign of easing inflation likely to fuel equity gains. The S&P 500 and Nasdaq both closed at record highs on Monday, driven by Nvidia and other AI-related names, setting a strong lead for Wall Street’s open later today.
However, market watchers caution that momentum could be tempered if inflation surprises to the upside or if Fed officials strike a more hawkish tone in pre-meeting commentary. Bond yields remain in focus, with the 10-year Treasury yield holding around 4.45%, suggesting investor caution as macro uncertainty lingers.
Overall, global investors remain locked on inflation and central bank signals this week, with market moves likely to remain rangebound ahead of key data and the Fed’s decision.
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