Cautious start across the region
Asian markets opened with a mixed performance today, as stronger-than-expected US producer price inflation (PPI) figures dampened investor optimism over large interest rate cuts by the Federal Reserve. Gains in Tokyo and Sydney contrasted with losses in Hong Kong, while mainland Chinese markets were little changed. The shift in sentiment follows a July PPI reading in the United States showing a 0.9% monthly rise, exceeding analyst expectations and prompting a reassessment of Fed policy prospects.
Japan leads gains on upbeat GDP data
In Tokyo, the Nikkei 225 advanced around 0.4%, supported by stronger-than-forecast second-quarter GDP growth. The yen also firmed slightly against the US dollar, lending a measure of stability despite potential headwinds for Japan’s export sector. Investors appeared encouraged by signs of economic resilience, even as global monetary policy uncertainty lingers.
Hong Kong under pressure on weak domestic signals
Hong Kong’s Hang Seng Index fell approximately 0.9%, weighed down by subdued local economic indicators and profit-taking after recent gains. Technology and property stocks were among the hardest hit, reflecting concerns over slower consumer spending and ongoing challenges in the real estate sector.
Mainland China steady amid muted trading
The CSI 300 index, tracking blue-chip shares in Shanghai and Shenzhen, traded largely flat in early dealings. Market participants cited a lack of fresh catalysts, with attention focused on upcoming domestic economic data and the potential for further policy easing by Beijing to support growth.
Australia edges higher on mining strength
Australia’s ASX rose around 0.2%, buoyed by gains in mining stocks as commodity prices held firm. Investor sentiment was supported by the third consecutive positive session on Wall Street, though concerns over global interest rate trends kept broader advances in check.
Impact of US inflation on market expectations
The unexpectedly strong US PPI report has shifted rate cut forecasts, with market-implied odds now pointing to a 92% chance of a smaller 25-basis-point reduction in September, down from prior expectations of a larger 50-basis-point move. The change in outlook has strengthened the US dollar against most Asian currencies, adding further complexity to regional equity performance.
Outlook for the trading day
Analysts expect Asian markets to remain range-bound through the day as investors digest the implications of US inflation data, monitor currency movements, and await additional macroeconomic releases. Volatility may increase ahead of key announcements from the People’s Bank of China and the Reserve Bank of Australia in the coming weeks.
REFH – Newshub, 15 August 2025
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