Asian Stock Market: BOJ, China fail to impress bulls amid rate-hike woes

• Asia-Pacific shares edge higher during a lackluster start to the key week.
• China’s easing of virus-led lockdowns, US tariff news join mixed data from Beijing to test the optimists.
• Increasingly hawkish Fed bets, hopes of faster rate hike from RBA contrast BOJ’s push for easy money.
• Off in New Zealand, Germany and France restrict market moves.

Trading sentiment remains mixed during Monday’s Asian session as market players await the key US inflation data, as well as central bank moves from Australia and Europe. Also challenging the moves are holidays in New Zealand, Germany, Switzerland and France.

While portraying the mood, the MSCI’s index of Asia-Pacific shares outside Japan rises 0.23% intraday whereas Japan’s Nikkei 225 rises 0.75% by the press time.

Bank of Japan’s (BOJ) Governor Haruhiko Kuroda’s firm determination to keep the monetary policy easy favored Japan’s Nikkei 225.

Upbeat headlines concerning China join softer-than-expected data to favor equity buyers from the dragon nation. That said, Beijing’s readiness to ease the virus-led activity controls joins the US preparations for announcing tariff relief for China to underpin the latest improvement in the market sentiment. On the contrary, China’s Caixin Services PMI for May dropped below 47.3 forecasts to 41.4, versus 36.2 prior. In doing so, the private services activity gauge marked a lesser reading for the fifth time while staying below the 50.00 neutral level, suggesting a contraction in activities.

Elsewhere, Australia’s ASX 200 printed mild losses amid increasing odds of the 0.25% rate hike in tomorrow’s Reserve Bank of Australia (RBA) interest rate decision.

It should be noted that equity markets in South Korea and Indonesia track gains from China, as well as a pullback in WTI crude oil prices, to print mild profits by the press time.

Alternatively, India’s BSE Sensex drops 0.70% amid economic fears ahead of Wednesday’s RBI.

On a broader front, the odds favoring the Fed’s 0.50% rate hike in September recently jumped to 75% versus 35% a week ago, which in turn highlights this week’s US Consumer Price Index (CPI) data and keeps investors on their toes.

As a result, the S&P 500 Futures rise half a percent to 4,126 and the US 10-year Treasury yields dropped 1.3 basis points (bps) to 2.942% at the latest.