NEWSLETTER
© Reuters.
By Amber Warrick
Investing.com — Most Asian stock markets rose on Monday, with Chinese indices leading after the government rolled out more stimulus measures, while fears of more aggressive moves from the Bank of Japan sent stocks premises fell.
China’s blue-chip index was the best performer in Asia, rising 2% to a nearly five-month high after the People’s Bank of China injected more liquidity into the banking system. The move comes ahead of an expected increase in liquidity over the lunar new year holidays.
Markets took the liquidity injection as a sign that the Chinese government plans to implement more spending measures as the country grapples with its worst COVID-19 outbreak yet.
The Chinese economy is also expected to eventually recover this year after the relaxation of most anti-COVID measures as the country reopened its borders last week. Local stocks have been soaring since December on that notion.
The index added 1.6%, while the Hong Kong index rose 0.7% to a six-month high.
Other markets exposed to China also rose. The index rose 0.6%, while the Australian index rose 0.8%.
On the other hand, Japan’s index sank 1.2% in anticipation of this week. Pressure is mounting on the central bank to tighten policy as local inflation rose to more than 40-year highs in December.
The bank had unexpectedly taken a hawkish tone in December, causing investors to position themselves for a similar move later this week.
Data on Monday showed it hit a 41-year high in December, and data to be released later this week is expected to show a similar trend.
Broader Asian stocks rose, also supported by continued bets in the coming months.
Attention now turns to a series of important economic data to be released later this week. While China’s economy is expected to recover this year, markets are wary of a slowdown in other major economies, especially as the effects of sharp monetary policy tightening are felt through 2022.
Fourth-quarter corporate earnings reports are also in the spotlight as markets seek to assess whether weakening economic trends are hurting the results of major companies.
