Hang Seng Index, ASX 200, Nikkei Index: Inflation, the BoJ, and Interventions

US Equity Markets: US RCM/TIPP Economic Optimism Index

Investors should consider overnight US equity market moves early in the Wednesday session. US economic indicators had a limited impact on US investor sentiment. The focus remained on the US CPI Report and the earnings season.

The RCM/TIPP Economic Optimism Index declined from 43.5 to 43.2 in April. Economists forecast an increase to 44.2. The Index is a leading indicator of consumer confidence and spending.

10-year US Treasury yields fell by 1.27%, ending the Tuesday session at 4.366%. On Tuesday, the Dow slipped by 0.02%. The Nasdaq Composite Index and the S&P 500 advanced by 0.32% and 0.14%, respectively.

Asian Economic Calendar: Inflation Numbers from Japan and the BoJ in Focus

On Wednesday, producer price numbers from Japan warrant investor attention early in the session. An upward trend in producer prices could raise expectations of a BoJ move away from negative rates. Producer prices raise prices in a higher-demand environment, passing costs onto consumers.

Economists forecast producer prices to increase by 0.8% year-on-year in March after rising by 0.6% in February. Higher-than-expected numbers could drive demand for the Yen and impact Nikkei-listed export stocks.

With inflation in the spotlight, investors should consider Bank of Japan commentary. BoJ Governor Kazuo Ueda is on the calendar to speak. Views on the economic outlook, inflation, and interest rates could move the dial.

Commodities: Crude Oil, Gold, and Iron Ore Price Trends

Commodity price movements also need investor consideration. Central bank purchases of gold, the Middle East influence on Crude oil, and iron ore demand from China are common themes.

On Tuesday, crude oil ended the session in negative territory, while gold hit new highs. Iron ore prices continued to recover on Tuesday. Reasons for the upswing in iron ore prices could include hopes of a rebound in demand from China and improving US-China relations.

The USD/JPY, the Intervention Zone, and the Nikkei

The USD/JPY hovered within the intervention zone at 151.757 on Wednesday. The markets expect 152 to be the line in the sand for the Japanese government. Government threats to intervene could affect the USD/JPY and Nikkei-listed export stocks.

The Futures Markets

On Wednesday, the ASX 200 was up 24 points, while the Nikkei was down by 100 points.

ASX 200

The ASX 200 gained 0.45% on Tuesday. Bank, gold (XAU/USD), mining, and tech stocks ended the session in positive territory. The S&P ASX All Technology Index (XTX) advanced by 0.56% on a pullback in US 10-year Treasury yields.

Gold stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) rose by 0.40% and 0.77%, respectively. Gold spot climbed higher on Monday.

Rio Tinto Ltd. (RIO) and BHP Group Ltd (BHP) rallied 2.96% and 1.99%, respectively, as iron ore prices rebounded. Fortescue Metals Group Ltd. (FMG) gained 1.61%.

Commonwealth Bank of Australia (CBA) and Westpac Banking Corp. (WBC) saw gains of 0.81% and 1.15%, respectively. ANZ Group Holdings Ltd. (ANZ) and National Australia Bank Ltd. (NAB) ended the day up 0.65% and 0.52%, respectively.

However, Woodside Energy Group Ltd (WDS) advanced by 0.47%, while Santos Ltd (STO) slid by 2.04%.

Hang Seng Index

On Tuesday, the Hang Seng Index ended the session up 0.57%. Tech stocks and property stocks reversed the losses from Monday. The Hang Seng Tech Index (HSTECH) and Hang Seng Mainland Properties Index (HSMPI) advanced by 0.44% and 0.98%, respectively.

Tencent (0700) declined by 0.13%, while Alibaba (9988) gained 0.14%.

Bank stocks had a mixed session. HSBC (0005) rallied 1.11%, with China Construction Bank (0939) gaining 0.62%. Industrial Commercial Bank (1398) ended the session flat.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei ended Tuesday up 1.08%. USD/JPY trends influenced buyer appetite for Nikkei-listed export stocks.

Bank stocks had a mixed Tuesday session. Sumitomo Mitsui Financial Group Inc. (8316) advanced by 0.52%, while Mitsubishi UFJ Financial Group Inc. (8306) ended the session flat.

It was also a mixed session for the main components of the Nikkei.

Tokyo Electron Ltd. (8035) rallied 3.53%, with Sony Group Corporation (6758) gaining 0.63%.

KDDI Corp. (9433) and Fast Retailing Co. Ltd. (9983) ended the day up 0.43% and 0.02%, respectively. Softbank Group Corp. (9948) bucked the trend, falling 0.29%.

For upcoming economic events, refer to our economic calendar.