Chinese stocks have opened the week strongly, hitting a six-month high as property sector sentiment improves, and Tesla shares’ 15% surge on Monday following Elon Musk‘s visit to Beijing can only be supportive of Chinese markets and tech more broadly.
A pullback in U.S. bond yields – 5.00% on the two-year yield once again proving to be a firm ceiling – will also help cement the upbeat backdrop to the market open in Asia on Tuesday.
The regional economic data and events calendar is overflowing with potential market-moving releases, included among them: Chinese PMIs, Japanese retail sales, unemployment and industrial production, Bank of Korea meeting minutes and Australian retail sales.
The currencies of all these countries will be sensitive to these releases, particularly in light of the yen’s rollercoaster ride and Japan’s reported yen-buying intervention on Monday.
The yen ended up strengthening 1.5% against the dollar on Monday, its biggest one-day rise this year, but that barely clawed back the ground lost in its 1.6% slump on Friday, the day of the Bank of Japan’s policy announcement.
Indeed, at around 156.00 per dollar, the yen goes into Asian trading on Tuesday slightly weaker than it was before the BOJ’s decision. If Tokyo did intervene, it has clearly managed to relieve the selling pressure on the yen, but how long that lasts remains to be seen.
