Asian markets opened cautiously higher on Tuesday, with investors balancing upbeat manufacturing signals from China against growing anticipation of key economic data out of the United States and a possible policy shift from the Federal Reserve.
Tokyo’s Nikkei 225 rose modestly in early trading, buoyed by gains in the tech and consumer sectors, while Hong Kong’s Hang Seng reversed a brief dip to open up 0.3% on renewed optimism over stimulus from Beijing. Mainland China’s Shanghai Composite opened flat but showed signs of life after a positive surprise in the latest Caixin manufacturing PMI, which came in at 51.8, beating expectations and marking the fastest expansion since March.
Sentiment across Asia was underpinned by a combination of easing inflation expectations and tentative hopes that Chinese policymakers will soon announce a broader support package to address persistent weaknesses in property and credit markets. However, traders remain wary after months of under-delivery on stimulus promises, and few expect a dramatic fiscal pivot from Beijing in the near term.
In South Korea, the Kospi opened slightly higher despite mixed industrial output data and lingering trade headwinds. Meanwhile, Australia’s ASX 200 ticked up 0.2%, helped by gains in financials and commodities, though consumer discretionary shares lagged after weak retail sales figures and concerns over household demand.
Currency markets were relatively muted, with the yen trading around 161.5 per US dollar, reflecting ongoing caution over potential intervention by Japanese authorities. The yuan remained stable, though analysts noted that the People’s Bank of China’s daily midpoint fixing continued to signal an intent to guide the currency within a tight range.
Looking ahead, Asian traders are bracing for a heavy data calendar later this week, including the release of US nonfarm payrolls, minutes from the Federal Reserve’s June policy meeting, and a string of global PMI figures. Many are hoping these indicators will clarify whether the Fed might still consider rate cuts in 2025 or continue its hawkish tone amid a resilient US economy.
Volatility remains subdued for now, but analysts warn that liquidity could tighten quickly if US yields resume climbing or if Chinese authorities fail to act decisively. For the moment, though, markets appear to be walking a narrow path of cautious optimism.
REFH – newshub finance
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