November 15, 2023

Asia Stocks Edge Up Ahead of Key US Inflation Data; Yen Nears Year-Low 💴

Asian stocks showed a cautious rise on Tuesday as traders awaited a pivotal U.S. inflation report that could significantly impact the Federal Reserve’s future policy decisions. MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.49%, with Tokyo’s Nikkei gaining 0.36% and Australia’s S&P/ASX 200 index up by 0.61%. The Japanese yen, teetering on one-year lows, reached 151.71 per dollar in Asian trading, prompting concerns about potential intervention. Japanese Finance Minister Shunichi Suzuki pledged to take necessary steps to address currency moves. Investors are closely watching the U.S. inflation report, with economists anticipating a slowdown in headline consumer price inflation to 3.3% in October. A significant deviation could influence the Fed’s stance on interest rates.

China’s shares saw gains, with the CSI 300 Index rising by 0.40%, and Hong Kong’s Hang Seng Index up by 0.57% ahead of a summit between the leaders of the world’s two largest economies. Meanwhile, Moody’s recent shift in the U.S. AAA credit rating outlook to “negative” adds to concerns over the nation’s economic challenges. Gary Dugan, CIO at Dalma Capital, highlighted structural issues such as unsustainable debt levels and fiscal leniency, suggesting that significant proposals to address these concerns may be unlikely given the upcoming presidential election. The U.S. also faces the prospect of a partial government shutdown if Congress fails to pass a stopgap spending bill by the approaching Saturday deadline.

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