©Reuters.
Investing.com — Most Asian stocks fell on Friday as a rebound in Chinese stocks spurred by economic stimulus stalled, while Japan's Nikkei stock average saw more profit-taking on rising expectations for a policy change from the Bank of Japan. , which has fallen further from its 34-year high.
Investors were on alert ahead of data to be released later in the day, and were also wary of risk-driven assets looming next week. This caused regional markets to largely ignore positive cues from .
Chinese stocks rebound slows, PMI also in sight
The Chinese market rebound appears to have lost momentum, with Chinese markets and indexes slightly down on Friday. The two currencies this week fell for the first time in five years and four years after the People's Bank of China unexpectedly cut local banks' reserve requirements, freeing up around 2 trillion yuan ($140 billion) of liquidity. There was a sharp rebound from the lows.
Two Chinese benchmarks are on track to rise more than 2% each this week, their best weekly performance since July 2023.
The Hong Kong index fell 0.3% after Citibank cut its price target on the internet giant, warning that a slowdown in China's video game industry was likely to weigh on earnings. 🙂 ranks among the top of the index.
The Hang Seng had rebounded from a 15-month low this week and was on track to rise more than 5%.
But analysts question how much additional financial stimulus will provide support to China's economy, given that consumer and business spending in the country remains weak. Business activity also failed to recover significantly over the past year.
January figures are due to be released next week and are expected to provide further clues about business activity early in the new year.
Japanese stocks fall due to profit taking, inflation cools further
Japan's index was the worst performer of the day, falling 0.9%, while other indexes fell 0.8%.
After rising to 34-year highs at the beginning of the week, both indexes were expected to end the week slightly lower due to concentrated profit-taking.
The slump in Japanese stocks came in response to somewhat hawkish signals from the Bank of Japan, particularly Governor Kazuo Ueda. Ueda said the central bank would maintain ultra-dovish policy in the short term, but said the end of the central bank's ultra-low interest rates was in sight, especially as inflation approached the central bank's annual target of 2%. .
Friday's weaker-than-expected reading reinforced that view, with core inflation falling well below 2% for the first time in 20 months.
Although the timing of the Bank of Japan's policy change remains uncertain, a rise in Japan's interest rates would signal the end of nearly a decade of ultra-easy monetary conditions that domestic stocks have enjoyed. The dovish Bank of Japan was the main driver of Japan's impressive stock price rally through 2023.
Broad Asian markets were mixed. Southeast Asian stocks posted sharp declines, leading the way with a 1% decline.
South Korean stocks were an outlier on the day, rebounding from a two-month low in early January and rising more than 1%.
Markets in India and Australia were closed.
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