Asian stocks rally on U.S. inflation miss, Nikkei at 33-year peaks
Investing.com — Most Asian stocks surged on Monday as a drop in U.S. inflation ramped up hopes for a less hawkish Federal Reserve, while data showing improving sentiment towards the Japanese economy put the Nikkei index back at 33-year highs.
Data on Friday had shown that the Fed’s preferred inflation gauge fell more than expected in May, triggering a rally across most risk-driven assets that spilled over into Asian trade this week.
But whether the rally will keep its momentum remains to be seen, ahead of a slew of economic readings and central bank signals this week. Economic readings on Monday also painted a mixed picture of Asia’s largest economies.
Japan’s Nikkei 225 index jumped 1.4% and the broader TOPIX added 1.3%, with both indexes trading close to 33-year highs.
A Bank of Japan survey showed that business sentiment in the country improved through the second quarter, indicating that the economy was recovering as more firms vowed to increase capital expenditure.
The reading factored into increasing optimism over Japan’s economic prospects this year, which, coupled with a dovish BOJ, have spurred sharp gains in Japanese stocks over the past two months.
But a separate survey also reiterated that Japanese factory activity shrank in June, indicating that the country’s biggest economic drivers were still under pressure.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose about 1.2% each, as a private survey showed that China’s manufacturing sector grew more than expected in June. Hong Kong’s Hang Seng index added 1.9% on strength in locally listed Chinese stocks.
But the reading slowed from the prior month, indicating that some spots of resilience in the Chinese economy may be losing their
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