Asian stocks muted as Fed meeting looms; Nikkei rallies ahead of BOJ
Investing.com-- Most Asian stocks were on Monday as caution prevailed before a barrage of key central bank meetings this week, most notably from the Federal Reserve and the Bank of Japan.
Middling economic data from China also weighed on sentiment, as the region’s biggest economy continued to grapple with sluggish growth.
Anticipation of a Fed meeting later this week remained a key point of focus, as markets feared any hawkish signals from the central bank following stronger-than-expected U.S. inflation prints. U.S. stock index futures were muted in Asian trade.
But Japanese shares vastly outperformed their peers, rising sharply despite rampant speculation that the BOJ was close to ending its negative interest rates and yield curve control policies.
Japan’s Nikkei 225 index jumped over 2% on Monday, while the broader TOPIX index added 1.6%. Both indexes moved back towards record highs after tumbling from their peaks over the past week.
Gains were broad-based, although consumer-oriented stocks surged on the prospect of increased wages in the country. Automobile makers Honda Motor Co Ltd (TYO:7267) (NYSE:HMC) and Nissan Motor Co., Ltd. (TYO:7201) also rose sharply on reports they had signed a collaboration to develop electric vehicles.
Japanese stocks gained despite increasing expectations that the BOJ was close to ending its ultra-dovish monetary policies, with a potential rate hike on the cards. The bank will conclude a two-day meeting on Tuesday.
Analysts are split over whether the BOJ will hike rates on Tuesday, or in April. In the event of a rate hike, the central bank is expected to raise rates by 20 basis points to 0.1% from negative 0.1%.
While an end to the BOJ’ ultra-dovish policies marks a close to nearly a
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