Asia Markets Outlook: Fed and China Stimulus Boost Investor Sentiment
By Jamie McGeever
As the quarter comes to a close, investors in Asia are still riding high on the recent stimulus injections from the U.S. Federal Reserve and China. The People's Bank of China's announcement to lower mortgage rates for existing home loans is expected to provide further support to the market.
However, Japanese markets may face volatility as former defense minister Shigeru Ishiba takes the helm as the new prime minister. The yen surged nearly 2% on Friday in reaction to this news, signaling potential market turbulence ahead.
As investors prepare to close their books for the quarter and China's Golden Week holiday approaches, market activity may be subdued. Key economic indicators to watch on Monday include China's PMI data, Japan's retail sales and industrial production figures, as well as Taiwan's GDP report.
Despite the recent rally in Chinese markets, economic data suggests that challenges remain. Factory activity in China is expected to have contracted for the fifth consecutive month, with industrial profits declining significantly in August.
While Beijing's stimulus measures have boosted investor optimism, the effects on economic data may take time to materialize. Investors should be prepared for potential volatility in the coming weeks as they navigate through the market uncertainties.
Key developments to watch on Monday include:
- China official and unofficial PMIs (September)
- Taiwan GDP (Q2, final)
- Japan retail sales, industrial production (August)
Overall, while market sentiment remains positive, investors should remain cautious and closely monitor economic indicators to make informed investment decisions.