- Chinese stocks are accelerating after the Lunar New Year holidays as optimism about economic recovery deepens.
- BOJ Kuroda is confident about keeping the 2% inflation target due to rising wages.
- The oil price has resumed its downside journey as Russia has increased the oil supply.
Markets in the Asian domain are showing strength despite cautious market sentiment. Chinese stocks are showing resilience after the Lunar New Year holidays, while Japanese equities are displaying marginal gains. S&P500 futures have surrendered their entire gains recorded on Friday as investors have turned risk-averse amid Federal Reserve (Fed)’s policy-inspired volatility, which is scheduled this week.
At the press time, Japan’s Nikkei225 added 0.20%, China A50 soared 1.60%, Hang Seng tumbled 1.06%, and KOSPI plunged 1.24%.
The US Dollar Index struggles to extend gains after recovery from 101.50 despite the risk-off market mood. The upside in the USD Index is capped at around 101.80 from the last week as Fed chair Jerome Powell is set to hike interest rates with a smaller rate. Inflationary pressures in the United States have trimmed significantly, allowing the Fed to announce a modest rate hike.
Chinese stocks have soared dramatically amid optimism boosted by commentary from China's cabinet that said on Saturday, “It would promote a consumption recovery as the major driver of the economy and boost imports”, state broadcaster CCTV reported per Reuters. The news highlights the cooling of global demand and recession concerns behind the readiness of China policymakers to act.
Meanwhile, Japanese indices are collecting strength as Bank of Japan (BoJ) Governor Haruhiko Kuroda expects the economy to achieve a 2% inflation target through rising wages. The continuation of easy monetary policy creates a condition that allows firms to hike wages. This might result in a bumper demand from individuals, which would keep inflation nearby the desired targets.
On the oil front, the oil price has resumed its downside journey after a pullback move. Downside bias in the oil price emerged after Reuters reported that Russia’s oil loadings from its Baltic ports were set to rise by 50% in January from December levels to address the strong demand coming from Asia. Russian oil supply is accelerating despite the sanctions by the Western cartel.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD extends recovery to near 0.6050 despite US-Sino trade war
AUD/USD extends the rebound to near 0.6050 in the Asian session on Tuesday, helped by a recovery in risk sentiment on China's support measures to stabilize markets. A renewed US Dollar selling also aids the Aussie's upswing but further upside appears elusive amid escalating US-China trade war.
USD/JPY keeps the red near 147.50 amid renewed US Dollar downside
USD/JPY is battling 147.50 in Tuesday's Asian session, returning to the red zone. A recovery in risk sentiment along with receding bets that the BoJ would raise the policy rate at a faster pace underpin the pair. However, resurgent US Dollar supply acts as a headwind to the USD/JPY turnaround.
Gold price sees dip-buying amid trade war escalation, will it last?
Gold price is building on its rebound from one-month lows of $2,957 early Tuesday, replicating the moves seen in Monday’s Asian trading. In doing so, Gold buyers retake the $3,000 threshold, but will they sustain the upswing amid escalating US-China trade tensions?
Ethereum risks a decline to $1,000 amid selling pressure from DeFi liquidations
Ethereum suffered a more than 27% crash within the past 48 hours, briefly dropping to a two-year low of $1,410 before recovering the $1,500 level on Monday. The decline, per Coinglass data, sparked $257.87 million in liquidations across ETH's derivatives market during the period.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.